ITAT Mumbai Judgments — September 2026

The Tribunal held that the assessee's contention that the AO should not have examined the issue of commission income once the addition under Section 68 was deleted is misconceived. The assessee itself accepted acting as a conduit. In such a scenario, the AO was justified in estimating commission income on the transactions. The Tribunal found the estimation of commission income at 0.15% on the transaction amount of Rs. 13.95 crore, resulting in an addition of Rs. 2,09,250/-, to be more than reasonable, especially since the assessee had not offered any commission or business income from such huge transactions. The Tribunal also noted that the assessee had, in its alternative submission before the AO, relied on case laws where commission was restricted to 0.15% or 0.1% for similar activities. The decisions relied upon by the assessee were found to have no application to the specific transaction. Therefore, all grounds of appeal raised by the assessee were rejected.

The Tribunal held that the learned CIT(Exemptions) erred in imposing the condition that the registration under section 12AB and approval under section 80G, along with consequential tax benefits, would be subject to the outcome of a proposed Special Leave Petition. The Tribunal reasoned that once the CIT(Exemptions) accepted the binding judgment of the jurisdictional High Court in 'Chamber of Tax Consultants v. CIT (Exemptions)', they could not dilute that grant by making it conditional on a proposed challenge. A judgment of the jurisdictional High Court is binding on tax authorities unless stayed, modified, or reversed. A mere proposal to challenge does not reduce its binding force. The Tribunal relied on its own coordinate bench decisions in 'ILLA Rajesh Foundation v. CIT (Exemptions)', 'Keshavlal Vajechand Kapadia Charity Trust v. CIT (Exemptions)', and 'Bai Manekbai A. Dubash Hareshwar Pandit Trust v. CIT (Exemptions)', which held that such contingent conditions are unsustainable. The Tribunal directed the CIT(Exemptions) to delete the conditional rider, and the registration/approval shall operate in accordance with law without the qualification. The Tribunal noted that if the legal position is subsequently altered by the Supreme Court, consequences would follow at that stage.

The Tribunal dismissed the appeal filed by the assessee. The Tribunal noted that the assessee did not appear for the hearing, and the appeal was decided ex parte. The Tribunal observed that the additions were made by the AO and upheld by the Ld. CIT(A) on the grounds that the assessee failed to discharge its onus with regard to the identity, creditworthiness of the creditor, and genuineness of the transactions. The Tribunal further noted that even before it, the assessee had not filed any supporting documents or placed on record any submissions to rebut the findings of the Ld. CIT(A). Therefore, the Tribunal found no reason to interfere with or deviate from the findings of the Ld. CIT(A) and upheld the order of the Ld. CIT(A). The grounds raised by the assessee were dismissed. The operative direction was to dismiss the appeal.

The Tribunal held that the issue regarding the addition of Rs. 2,87,75,495 on account of corpus fund and security deposits required fresh examination at the Assessing Officer's level. The assessee explained these amounts were collected from flat purchasers as per sale arrangements and were payable to the society upon its formation, reflected as liabilities and not credited to the Profit & Loss Account. The Revenue contended the assessee failed to establish identity and genuineness, and the funds were used commercially. However, no specific material was brought on record to disprove the receipt from flat purchasers or establish the liabilities as fictitious. The fact that the society was not formed and funds remained with the assessee did not alter the character of receipts or establish them as unexplained income under Section 68. The Tribunal found that the assessee's explanation, including an affidavit stating no benefit was derived, required verification with reference to individual flat purchasers, sale agreements, ledger accounts, and dates/modes of receipt. The Assessing Officer was directed to examine whether amounts remained as liabilities and were subsequently dealt with as per terms. Therefore, the issue was restored to the Assessing Officer for fresh examination. Grounds related to this issue in both appeals were allowed for statistical purposes. The judgment does not explicitly decide the validity of reassessment proceedings or the additions of Rs. 10,00,000 and Rs. 1,00,00,000 as unexplained cash credits.

The Tribunal decided the issues as follows: Issue 1 (Section 14A and Section 115JB): The Tribunal upheld the CIT(A)'s deletion of the disallowance under Section 14A read with Rule 8D for AY 2011-12, agreeing that no disallowance can be made in the absence of exempt income. The Tribunal also concurred with the CIT(A)'s finding that Section 14A disallowances are covered under clause (f) of Explanation 1 to Section 115JB(2), meaning they are not to be added to book profit. The ratio is that Section 14A requires a nexus with exempt income, and its disallowances are not automatically includible in book profit under Section 115JB unless specifically covered by the Explanation. Issue 2 (Delayed deposit of employees' contribution to PF/ESIC): The Tribunal allowed the Revenue's appeal, setting aside the CIT(A)'s order. It relied on the Supreme Court's decision in Checkmate Services P. Ltd. vs. CIT, holding that employees' contribution, governed by Section 36(1)(va) and Section 2(24)(x), must be deposited by the due date prescribed under PF/ESIC legislation. The benefit of Section 43B's extended due date is not applicable to employees' contributions. The disallowance made by the AO was restored. Issue 3 (ALV of unsold finished stock): The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s deletion of the addition. Following the consistent view of the Tribunal in the assessee's own case for AY 2013-14 and the CIT(A)'s subsequent orders, the Tribunal held that additions on account of deemed rent in respect of unsold flats held as stock-in-trade are not sustainable. The principle of judicial consistency was applied.

The Tribunal upheld the order of the CIT(A). Regarding the validity of reopening, the Tribunal found that the CIT(A) had correctly noted that the AO received specific information from the Investigation Wing regarding large cash deposits, which constituted tangible material for forming a belief that income had escaped assessment. The Tribunal found no material to controvert these findings. On the issue of the addition under Section 68, the Tribunal agreed with the CIT(A) that the assessee failed to establish the genuineness of the cash sales with supporting material, specifically the link between alleged cash sales, stock movement, and bank deposits. The documents produced were deemed insufficient. The Tribunal noted that the assessee did not appear to present arguments or evidence to challenge the CIT(A)'s factual findings. The Tribunal also agreed with the CIT(A) that the challenge to penalty proceedings under Section 271(1)(c) was premature and that interest under Sections 234B and 234C was consequential. Consequently, all grounds raised by the assessee were dismissed.

The Tribunal noted that the reassessment proceedings were completed ex parte due to the assessee's repeated non-compliance, and the assessee also did not effectively pursue the appeal before the CIT(A). However, considering the substantial amount involved and the fact that the merits of the transactions were not examined after considering the assessee's explanation and evidence, the Tribunal decided to grant one final opportunity to the assessee. Accordingly, the impugned order of the CIT(A) in ITA No. 5863/Mum/2026 (quantum appeal) was set aside, and the matter was restored to the AO for de novo adjudication, subject to the assessee paying costs of ₹11,000/- to the Prime Minister's Relief Fund. The AO was directed to provide a reasonable opportunity to the assessee to furnish explanations and evidence and decide the matter afresh. All factual and legal contentions of the assessee were kept open. For ITA No. 5854/Mum/2026 (penalty appeal), the Tribunal observed that the penalty was based on the addition made in the quantum proceedings. Since the quantum matter was being restored for fresh adjudication, the penalty proceedings also required fresh consideration. The Tribunal set aside the CIT(A)'s order and the penalty order, restoring the matter to the AO for de novo adjudication, subject to separate costs of ₹11,000/-. The AO was directed to decide the penalty proceedings after deciding the quantum proceedings, after giving a reasonable opportunity of hearing. All contentions relating to the penalty were kept open.

The Tribunal decided that the addition of Rs. 8,87,290/- made by the Assessing Officer under section 56(2)(x)(b) of the Income-tax Act, 1961, was not justified. The Tribunal found that the assessee and her husband purchased the property jointly, and the stamp duty value of the property was Rs. 6,97,15,803. The assessee's 50% share of the stamp duty value was Rs. 3,48,57,902, while her 50% share of the purchase consideration was Rs. 3,39,70,612. The difference of Rs. 8,87,290 was the subject of the addition. The Tribunal noted that the amendment to Section 56(2)(x) by the Finance Act, 2020, which introduced a safe harbour or tolerance band of 10% (or 20% in certain cases) for the difference between stamp duty value and consideration, was made effective from April 1, 2021. However, the Tribunal observed that the assessee's contention regarding the retrospective and curative nature of this amendment was not supported by the judgment of the Hon'ble Jurisdictional High Court in the case of CIT vs. Shri Prakash P. Hinduja, which held that the amendment was prospective. Therefore, the benefit of the tolerance band was not applicable for Assessment Year 2018-19. The Tribunal directed the deletion of the addition.

The Tribunal held that the conditions necessary for invoking Section 263 of the Act were not satisfied. The Tribunal noted that the absence of elaborate discussion in the assessment order does not, by itself, lead to the conclusion that there was no application of mind, especially when the order expressly states that relevant details and supporting documentary evidence were perused. Citing the jurisdictional Bombay High Court's decisions in CIT v. Gabriel India Ltd. and CIT v. Fine Jewellery (India) Ltd., the Tribunal held that where the AO has made enquiries and considered the assessee's explanation, the order cannot be deemed erroneous merely because the Commissioner believes further enquiry was needed. The Tribunal found that the AO had asked for details and examined supporting material, indicating it was not a case of 'no enquiry'. The Tribunal also referred to co-ordinate bench decisions in Blue Cross Laboratories Pvt. Ltd. and Siddharth Colorchem Pvt. Ltd., which dealt with similar issues of Section 80G deduction on CSR expenditure and the invocation of Section 263. The Tribunal concluded that the AO had taken a possible view, and merely because the PCIT held a different view, the assessment order could not be considered erroneous. The impugned order of the PCIT under Section 263 was set aside, and the assessment order was restored. The appeal of the assessee was allowed.

The Tribunal held that the assessee was deprived of a reasonable opportunity to present its case before the first appellate authority. Therefore, the impugned order was set aside to allow the assessee to present its case on merits.

The Tribunal held that both the assessment order and the appellate order were passed ex parte due to the assessee's non-compliance. The assessee's primary contention was the non-receipt of statutory notices, which prevented participation. The Tribunal found no conclusive evidence that the assessee deliberately avoided proceedings. Citing the settled principle that no person should be condemned unheard and the right to a reasonable opportunity of being heard as an integral part of natural justice, the Tribunal concluded that the additions were sustained without the assessee's explanation or supporting evidence. Therefore, in the interest of justice, the Tribunal set aside the orders of the Ld. CIT(A) and the AO, restoring the matter to the AO for de novo adjudication. The AO is directed to provide a reasonable opportunity to be heard and consider all evidence. The assessee is directed to cooperate fully. The appeal is allowed for statistical purposes.

The Tribunal noted that the assessee had raised specific legal grounds challenging the jurisdiction assumed under sections 147 and 148, the order passed under section 148A(d), and the approval for the notice under section 148, relying on the Supreme Court decision in Union of India v. Ashish Agarwal. The Tribunal found that the impugned order did not deal with these legal grounds by examining the relevant facts, statutory provisions, and judicial precedent. The legal grounds were dismissed by the CIT(A) primarily for want of material and on the observation that no serious lacuna was pointed out at the assessment stage. The Tribunal held that these legal grounds, which go to the root of jurisdiction, were not adjudicated with a reasoned finding on their merits. In the interest of justice, the Tribunal set aside the impugned order and restored the appeal to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to consider each ground, including the plea based on the Supreme Court decision, and pass a speaking order after granting a reasonable opportunity of being heard. The Tribunal explicitly stated that it had not expressed any opinion on the merits of any ground and all issues were left open. The grounds raised by the assessee were allowed for statistical purposes.

The Tribunal held that the notice issued under Section 148 for AY 2013-14 on 27.03.2021 was barred by limitation under Section 149(1)(b) as the six-year period expired on 31.03.2020. The Tribunal relied on the jurisdictional High Court of Bombay's decision in The New India Assurance Company Limited v. Union of India, stating that any notice issued under the old regime beyond the six-year limit, even if prior to 01.04.2021, cannot survive. Consequently, the reassessment proceedings for AY 2013-14 were quashed. For AY 2010-11 and AY 2012-13, the Tribunal held that the AO could not make additions that were not part of the "reasons to believe" recorded for reopening. Following the precedent in CIT v. Jet Airways (I) Limited, where the AO dropped the additions forming the basis of reopening, the subsequent additions made by the AO (unsecured loans and interest for AY 2010-11, and interest expense for AY 2012-13) were deemed legally unsustainable and deleted. All other grounds were rendered academic.

The Tribunal condoned the 60-day delay in filing the appeal, finding that the assessee's pursuit of a rectification application before the CIT(Appeals) demonstrated bona fides and that the assessee was prevented by reasonable cause from filing the appeal within the stipulated time. On merits, the Tribunal held that the addition made by the AO was not sustainable. Following the decisions of coordinate benches in Shri Ashutosh Sinha, Shri Vipul Otarmal Jain, and M/s John Fowler India Private Limited, the Tribunal ruled that since the difference between the DVO's valuation (Rs. 83,54,000/-) and the actual sale consideration (Rs. 80,00,000/-) was less than 10% of the sale consideration, no addition was warranted. The Tribunal agreed with the assessee's submission that the third proviso to Section 50C, which provides for a 10% tolerance limit, should be applied retrospectively, even for assessment years prior to its statutory insertion from 01.04.2019, as it is a beneficial provision. Accordingly, the AO was directed to adopt the sale consideration as declared by the assessee. The grounds raised by the assessee were allowed.

The Tribunal condoned the substantial delay of approximately 1,467 days in filing the appeal, subject to the assessee paying costs of ₹50,000/- to the Prime Minister's National Relief Fund. The Tribunal relied on the principles laid down by the Supreme Court in cases like Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. and N. Balakrishnan v. M. Krishnamurthy, emphasizing a liberal construction of 'sufficient cause' to advance substantial justice and adopting a justice-oriented approach where explanations do not disclose mala fides. The Tribunal found the assessee's explanation, though not demonstrating ideal vigilance, to be bona fide, considering the significant additions involved and the undertaking to pay costs. The Tribunal held that refusing to condone the delay would deprive the assessee of an adjudication on merits. Furthermore, considering the peculiar facts and the magnitude of additions, the Tribunal set aside the impugned order of the CIT(A) and restored the entire appeal to the file of the Assessing Officer for de-novo adjudication in accordance with law, directing the assessee to cooperate fully in the fresh assessment proceedings. The operative direction is to restore the appeal to the AO for de-novo adjudication.

The Tribunal held that the assessee had discharged its burden under Section 68 of the Income-tax Act, 1961. The identity of SIPPL, an Indian company with a PAN and subsidiary of Sirmax SPA, Italy, was not disputed. The investment was made through banking channels, and the assessee provided SIPPL's bank statement and foreign inward remittance advice. The AO himself traced the funds to Sirmax SPA's remittance to SIPPL, thus identifying the immediate source and the source in SIPPL's hands. The Tribunal distinguished the case from PCIT v. NRA Iron & Steel Pvt. Ltd. (supra), finding no material to suggest SIPPL was a paper company or that the assessee's unaccounted money was routed back. Regarding FEMA/RBI violations, the Tribunal relied on Mapei Construction Products (India) Pvt. Ltd. v. DCIT, holding that an addition under Section 68 cannot be sustained solely on the basis of non-compliance with FEMA/RBI requirements if the identity of the investor and source of funds are established. Such violations are within the domain of FEMA authorities. The Tribunal also noted no specific defect in the valuation report and found no material to show the transaction was not genuine or was an accommodation entry. Therefore, the CIT(A) correctly appreciated the facts and deleted the addition. Grounds 1 to 7 were dismissed.

The Tribunal held that the transaction did not call for interference with the CIT(A)'s conclusion that section 56(2)(x), inserted w.e.f. 01.04.2017, was not applicable. The Tribunal noted the chronology: entire consideration paid between March 2011 and August 2012; sale deed executed and possession delivered on 13.10.2016; assessee applied for stamp duty adjudication on 22.03.2017; property recorded in audited financial statements as on 31.03.2017; stamp duty paid on 12.04.2017; and registration on 15.04.2017. The Tribunal reasoned that all material acts by contracting parties and initiation of the statutory registration process were completed before 01.04.2017. The subsequent registration was a culmination of a process already commenced. The Tribunal also noted that the valuation adopted by the AO did not attain finality, and a Government Registered Valuer valued the property at Rs. 13,47,96,000/- as on 13.10.2016, which was below the consideration paid. Therefore, the addition of Rs. 17,68,86,000/- was deleted. The alternative contentions were left undecided.

The Tribunal held that the penalty levied under section 271(1)(c) was invalid. The assessment order clearly and unambiguously recorded the initiation of penalty proceedings under section 271AAC and contained no satisfaction or direction for initiation under section 271(1)(c). Sections 271AAC and 271(1)(c) operate in distinct statutory fields with different conditions and consequences. Initiation under section 271AAC cannot be treated as an implied initiation under section 271(1)(c), nor can the latter provision be substituted at the penalty imposition stage. The recital in the penalty order that proceedings under section 271(1)(c) were initiated separately in the assessment order was demonstrably contrary to the assessment order itself. A subsequent notice under section 271(1)(c) cannot cure the absence of foundational satisfaction during assessment proceedings. The jurisdictional objection arises from the face of the assessment order and does not depend on the outcome of the pending quantum appeal. Therefore, the penalty of ₹17,18,658 imposed under section 271(1)(c) travels beyond the jurisdiction assumed by the AO and cannot be sustained. The penalty was directed to be deleted. The Tribunal clarified that its decision was confined to the validity of the penalty under section 271(1)(c) and did not express any opinion on the merits of the addition or the quantum appeal.

The Tribunal held that the assessee's explanation for the delay in filing appeals before the CIT(A) was bona fide and supported by attending circumstances and her sworn affidavit. The Tribunal noted that there was no material to demonstrate the assessee's personal receipt of notices or actual knowledge of the proceedings. The assertion of not residing at the PAN address, not being registered on the e-filing portal until 25.09.2025, and gaining knowledge of demands only on 04.02.2026 was not rebutted. Citing Supreme Court judgments in Collector, Land Acquisition v. Mst. Katiji & Others and N. Balakrishnan v. M. Krishnamurthy, the Tribunal found that the assessee was prevented by sufficient cause and condoned the delay in all four appeals, admitting them for adjudication on merits. Regarding the quantum addition, the Tribunal found that the Agreement for Sale and Deed of Assignment represented a single transaction for one property with a consideration of ₹1,10,00,000, not two independent purchases. The Deed of Assignment expressly referred to the Agreement for Sale. The Tribunal also noted that the property was financed through a housing loan from ICICI Bank, with the assessee as a joint holder and co-applicant, and no part of the consideration represented her unexplained investment. Therefore, the addition of ₹2,20,00,000 was deleted. The penalties under sections 271(1)(c), 271(1)(b), and 271F were consequently deleted as they were consequential to the addition.

The Tribunal dismissed the appeal, upholding the disallowance of ₹13,51,000/- under Section 80GGC. The Tribunal noted that while the decision concerning the Public Political Party (the donee) did not specifically state that the assessee received back the donation, it was relevant due to the party being judicially found to issue bogus donation receipts and return purported donations. The Tribunal found deficiencies in the assessee's own case, including inconsistencies in donation amounts and party names, failure to furnish the complete Axis Bank statement despite opportunities, and not providing details of contacts with the political party or donation arrangements. The Tribunal held that a transaction routed through a bank or supported by a receipt does not become genuine if it is an accommodation entry. It distinguished the assessee's reliance on ACIT vs. Anuj Prakash Gupta, stating that the present case had additional factors, including judicial findings against the donee party. The Tribunal also found that the disallowance was not solely based on third-party statements but on cumulative material, including information about the donee, inconsistencies in the assessee's submissions, and judicial findings. The Tribunal was not satisfied that the payment represented a genuine political contribution eligible for deduction. Ground No. 11 regarding penalty proceedings u/s 270A was dismissed as premature. Ground No. 12 was general.

The Tribunal held that the reassessment orders dated 22.05.2023 could not furnish a legally sustainable foundation for the exercise of jurisdiction under section 263. For AY 2016-17, the approval obtained on 28.07.2022 from the Principal Commissioner under section 151(i) did not satisfy the requirement of section 151(ii), as more than three years had elapsed from the end of the assessment year. For AY 2017-18, although the officer signing the approval held the rank of Chief Commissioner, the Revenue failed to establish the statutory condition for exercising power under section 151(ii). The defect in the approval went to the jurisdiction of the AO to proceed under sections 148A(d) and 148. The Tribunal clarified that the reassessment orders themselves were not the subject of the appeal, but their validity was examined to determine if they could support the PCIT's section 263 jurisdiction. The Tribunal also noted that even if the reassessment orders were considered erroneous, the cumulative requirement of prejudice to the interests of the Revenue had not been established. Consequently, the PCIT's orders under section 263 were quashed. Grounds 1 and 2 in both appeals were allowed. Grounds 3 and 4 were dismissed as not pressed.

The Tribunal held that while the CIT(A) was not justified in denying the claim solely for non-furnishing of Form 10BB, the assessee is not entitled to exemption under Section 10(23C)(iiiad). This is because the pre-primary, primary, and secondary sections are considered constituent parts of a single recognized educational institution, and their receipts, aggregating to Rs. 1,01,83,461/-, exceed the prescribed limit of Rs. 1 crore for AY 2015-16. The Tribunal distinguished the case of ICF Silver Jubilee Nursery & Primary School v. DCIT, noting that the approvals in the present case recognize one school with different educational levels, not three independent institutions. Therefore, the aggregation of receipts is justified. However, the Tribunal found that the CPC treated the entire gross receipts as taxable income without considering admissible expenditure, depreciation, and allowances. Since this aspect was not examined by the lower authorities, the issue of correct quantification of taxable income under normal computation provisions is restored to the Assessing Officer. The Assessing Officer is directed to examine the books of account, income and expenditure statements, and allow admissible expenditure, depreciation, and allowances to determine the net taxable income, without disallowing expenditure merely because exemption was denied. The restoration is limited to this computation and does not permit a de novo assessment.

The Tribunal held that the assessee's explanation for the delay in filing appeals before the CIT(A) was bona fide and supported by attending circumstances and her sworn affidavit. The Tribunal noted that there was no material to demonstrate the assessee's personal receipt of notices or actual knowledge of the proceedings. The assertion of not residing at the PAN address, not being registered on the e-filing portal until 25.09.2025, and gaining knowledge of demands only on 04.02.2026 was not rebutted. Citing Supreme Court judgments in Collector, Land Acquisition v. Mst. Katiji & Others and N. Balakrishnan v. M. Krishnamurthy, the Tribunal found that the assessee was prevented by sufficient cause and condoned the delay in all four appeals, admitting them for adjudication on merits. Regarding the quantum addition, the Tribunal found that the Agreement for Sale and Deed of Assignment represented a single transaction for one property with a consideration of ₹1,10,00,000, not two independent purchases. The Deed of Assignment expressly referred to the Agreement for Sale. The Tribunal also noted that the property was financed through a housing loan from ICICI Bank, with the assessee as a joint holder and co-applicant, and no part of the consideration represented her unexplained investment. Therefore, the addition of ₹2,20,00,000 was deleted. The penalties under sections 271(1)(c), 271(1)(b), and 271F were consequently deleted as they were consequential to the addition.

The Tribunal held that since the notice under Section 148 was issued more than three years after the end of the assessment year, approval from the Principal Chief Commissioner or Chief Commissioner of Income Tax was required as per Section 151(ii) of the Act. The approval obtained from the PCIT was therefore invalid.

The Tribunal quashed the addition of Rs. 5 lakh made by the AO and upheld by the CIT(A). The Tribunal found that Section 69A of the Income Tax Act is applicable to unexplained money, bullion, jewellery, or other valuable articles not recorded in books of account. However, the alleged 'on-money' payment in cash for an immovable property purchase is an investment and not covered by the phrase 'any money, bullion, jewellery or any other valuable article'. Furthermore, the Tribunal noted that the apparent consideration for the property was higher than the stamp duty valuation, negating any rational basis to presume payment over and above the agreement value. The AO failed to produce evidence of any consideration exceeding the sale price. The Tribunal also highlighted that the AO relied on a loose sheet and a statement under Section 132(4) without corroboration and denied the assessee an opportunity to cross-examine the deponent, violating principles of natural justice. Consequently, the addition was deemed unsustainable. As the addition on merits was deleted, the legal grounds were rendered academic.

The Tribunal held that the authorities below were not justified in sustaining the penalty merely on the ground that the return was furnished for the first time under Section 148. The Tribunal reasoned that Section 270A has a composite scheme requiring identification of situations under subsection (2), determination of under-reported income under subsection (3), examination of exclusions under subsection (6), and then quantification of penalty. While Section 270A(2)(b) is attracted if a return is filed for the first time under Section 148 and assessed income exceeds the threshold, it does not automatically mean the entire assessed income is under-reported income. The determination of under-reported income is governed by Section 270A(3). For an individual in such a scenario, Section 270A(3)(i)(b)(B) prescribes the under-reported income as the difference between assessed income and the maximum amount not chargeable to tax. In this case, the assessed income was identical to the disclosed income, with no additions or unexplained amounts. Furthermore, Section 270A(6)(a) provides an exclusion if the assessee offers a bona fide explanation with full disclosure of material facts. The assessee's explanation of being at sea due to his profession and unawareness of filing requirements, coupled with the fact that his salary income suffered TDS and was reported, and his investments were explained, was considered bona fide. Therefore, the penalty under Section 270A was deleted.

The Tribunal allowed the appeal, deleting the addition of ₹2,50,00,000 made by the Assessing Officer under section 69A and confirmed by the CIT(A). The Tribunal noted that the factual matrix was identical to a coordinate bench decision in Sanjeet Kumar Kedarnath Gupta v. ITO. The Tribunal found that the assessee's name did not appear in the seized Excel sheet. The agreement value in the Excel sheet was stated as ₹3,00,00,000, while the registered agreement value was ₹2,50,00,000, making the derived on-money figure unreliable. The assessee held only a 25% share as a co-owner, yet the AO added 100% of the alleged on-money, indicating a lack of application of mind. Section 69A could not be invoked as no asset or money was found in the assessee's possession. Expecting the assessee to provide negative proof was legally invalid. Furthermore, reassessment for AY 2018-19 on the same search material was dropped by the department, invoking the rule of consistency and judicial discipline. The Tribunal held that the addition made on raw, uncorroborated third-party data without independent inquiry could not be sustained.

The Tribunal held that the fresh notices issued under section 148 on 29.07.2022 were beyond the surviving period of limitation as per the Supreme Court's decision in Rajeev Bansal. Consequently, the reassessment proceedings and assessment orders were quashed.

The Tribunal noted that the reassessment proceedings were completed ex parte due to the assessee's repeated non-compliance, and the assessee also did not effectively pursue the appeal before the CIT(A). However, considering the substantial amount involved and the fact that the merits of the transactions were not examined after considering the assessee's explanation and evidence, the Tribunal decided to grant one final opportunity to the assessee. Accordingly, the impugned order of the CIT(A) in ITA No. 5863/Mum/2026 (quantum appeal) was set aside, and the matter was restored to the AO for de novo adjudication, subject to the assessee paying costs of ₹11,000/- to the Prime Minister's Relief Fund. The AO was directed to provide a reasonable opportunity to the assessee to furnish explanations and evidence and decide the matter afresh. All factual and legal contentions of the assessee were kept open. For ITA No. 5854/Mum/2026 (penalty appeal), the Tribunal observed that the penalty was based on the addition made in the quantum proceedings. Since the quantum matter was being restored for fresh adjudication, the penalty proceedings also required fresh consideration. The Tribunal set aside the CIT(A)'s order and the penalty order, restoring the matter to the AO for de novo adjudication, subject to separate costs of ₹11,000/-. The AO was directed to decide the penalty proceedings after deciding the quantum proceedings, after giving a reasonable opportunity of hearing. All contentions relating to the penalty were kept open.

The Tribunal held that there is no dispute on the status of the assessee being a private discretionary trust, which is to be taxed at the maximum marginal rate. However, the surcharge has to be computed on income tax with reference to the slab rate. The Tribunal respectfully followed the decision of the Special Bench of the Mumbai Tribunal in the case of Araadhya Jain Trust vs. ITO (supra). Accordingly, the Assessing Officer (AO) was directed to recompute the surcharge by following the decision of the Special Bench. The grounds of appeal raised by the assessee were allowed. The operative direction was to recompute the surcharge.

The Tribunal dismissed all grounds of appeal raised by the Revenue. Regarding Ground No.1, concerning the addition under Section 23(5), the Tribunal upheld the CIT(A)'s finding that the commercial unit was incomplete and not capable of being lawfully occupied or let during the relevant previous year due to subsequent re-planning and modifications. The application for completion of revised work was made on 27.01.2023, and the original occupation certificate for the building in its earlier configuration did not establish the completion of the reconfigured unit. The Revenue failed to provide material to dislodge this finding. For Ground No.2, the Tribunal noted that the Rs.42,00,000 was not added to the total income in the assessment order, making the ground academic. Nevertheless, the CIT(A)'s finding that it was a security deposit evidenced by a registered lease deed was upheld, as the Revenue provided no material to the contrary. Concerning Ground No.3, the Tribunal held that opening stock, by its nature, is a debit item brought forward and not a credit received during the year. The CIT(A) had examined reconciliation, financial statements, and bank records, finding the opening stock reconciled with earlier years. The AO's treatment of the opening stock as an unexplained credit was inconsistent with accepted transactions like sale proceeds and rent from the same stock. The omission or incorrect disclosure of closing stock in a preceding year does not convert opening inventory into a fresh cash credit. The Revenue failed to controvert the reconciliation and documentary evidence. Therefore, the deletion of the addition under Section 68 was upheld.

The Tribunal held that the reassessment orders dated 22.05.2023 could not furnish a legally sustainable foundation for the exercise of jurisdiction under section 263. For AY 2016-17, the approval obtained on 28.07.2022 from the Principal Commissioner under section 151(i) did not satisfy the requirement of section 151(ii), as more than three years had elapsed from the end of the assessment year. For AY 2017-18, although the officer signing the approval held the rank of Chief Commissioner, the Revenue failed to establish the statutory condition for exercising power under section 151(ii). The defect in the approval went to the jurisdiction of the AO to proceed under sections 148A(d) and 148. The Tribunal clarified that the reassessment orders themselves were not the subject of the appeal, but their validity was examined to determine if they could support the PCIT's section 263 jurisdiction. The Tribunal also noted that even if the reassessment orders were considered erroneous, the cumulative requirement of prejudice to the interests of the Revenue had not been established. Consequently, the PCIT's orders under section 263 were quashed. Grounds 1 and 2 in both appeals were allowed. Grounds 3 and 4 were dismissed as not pressed.

The Tribunal held that the additions made by the AO under Section 68 of the Act for unsecured loans in AY 2004-05 and 2005-06 were rightly confirmed as the assessee failed to provide evidence. The addition for business profits based on a recovered financial statement was also confirmed for similar reasons.

The Tribunal set aside the order of the Ld. CIT(A) and restored the matter back to the file of the Assessing Officer (AO). The Tribunal noted that the CIT(A) deleted the additions by relying on a decision of the Coordinate Bench of the ITAT concerning tenancy rights, without examining the specific facts of the present case. The Tribunal observed that the CIT(A) did not send the documents filed by the assessee (agreements and other details) to the AO for a remand report or seek the AO's comments before admitting them. Furthermore, the AO's order indicated that the agreement contained a clause (LXXI) stating the allotment was made on an ownership basis, which could not be considered merely a transfer of tenancy rights. Therefore, the Tribunal concluded that the matter required detailed verification by the AO regarding the documents filed by the assessee, the terms of the agreement, and the applicability of the coordinate bench's decision to the present case. The AO was directed to pass a fresh order after carrying out necessary verification. The Tribunal clarified that this decision to restore the matter does not reflect on the merits of the dispute.

The Tribunal held that the fresh notices issued under section 148 on 29.07.2022 were beyond the surviving period of limitation as per the Supreme Court's decision in Rajeev Bansal. Consequently, the reassessment proceedings and assessment orders were quashed.

The Tribunal held that the assessment order was void ab initio due to the non-issuance and non-service of notice under Section 143(2) of the Income-tax Act, 1961. The Tribunal relied on the Supreme Court's decision in CIT v. Lakshman Das Khandelwal, which clarified that Section 292BB of the Act does not cure the complete absence of a notice, but only infirmities in its service. The judgment stated that for Section 292BB to apply, the notice must have emanated from the Department, and it is only the manner of service that the section seeks to cure, not the complete absence of notice. The Tribunal found that the Assessing Officer failed to substantiate the issue and service of the notice under Section 143(2) by placing any evidence on record. The assessment order sheet also did not reflect any recording about the issue of such a notice. Therefore, the Tribunal concluded that the issuance and service of a statutory notice under Section 143(2) is a prerequisite for the valid assumption of jurisdiction for continuing assessment proceedings and cannot be dispensed with. Consequently, the impugned assessment order was quashed. As the assessment order was quashed on this legal ground, the remaining grounds of appeal for both the assessee and the revenue were not adjudicated.

The Tribunal held that the assessee's explanation for the delay in filing appeals before the CIT(A) was bona fide and supported by attending circumstances and her sworn affidavit. The Tribunal noted that there was no material to demonstrate the assessee's personal receipt of notices or actual knowledge of the proceedings. The assertion of not residing at the PAN address, not being registered on the e-filing portal until 25.09.2025, and gaining knowledge of demands only on 04.02.2026 was not rebutted. Citing Supreme Court judgments in Collector, Land Acquisition v. Mst. Katiji & Others and N. Balakrishnan v. M. Krishnamurthy, the Tribunal found that the assessee was prevented by sufficient cause and condoned the delay in all four appeals, admitting them for adjudication on merits. Regarding the quantum addition, the Tribunal found that the Agreement for Sale and Deed of Assignment represented a single transaction for one property with a consideration of ₹1,10,00,000, not two independent purchases. The Deed of Assignment expressly referred to the Agreement for Sale. The Tribunal also noted that the property was financed through a housing loan from ICICI Bank, with the assessee as a joint holder and co-applicant, and no part of the consideration represented her unexplained investment. Therefore, the addition of ₹2,20,00,000 was deleted. The penalties under sections 271(1)(c), 271(1)(b), and 271F were consequently deleted as they were consequential to the addition.

The Tribunal decided the issues as follows: Issue 1 (Section 14A and Section 115JB): The Tribunal upheld the CIT(A)'s deletion of the disallowance under Section 14A read with Rule 8D for AY 2011-12, agreeing that no disallowance can be made in the absence of exempt income. The Tribunal also concurred with the CIT(A)'s finding that Section 14A disallowances are covered under clause (f) of Explanation 1 to Section 115JB(2), meaning they are not to be added to book profit. The ratio is that Section 14A requires a nexus with exempt income, and its disallowances are not automatically includible in book profit under Section 115JB unless specifically covered by the Explanation. Issue 2 (Delayed deposit of employees' contribution to PF/ESIC): The Tribunal allowed the Revenue's appeal, setting aside the CIT(A)'s order. It relied on the Supreme Court's decision in Checkmate Services P. Ltd. vs. CIT, holding that employees' contribution, governed by Section 36(1)(va) and Section 2(24)(x), must be deposited by the due date prescribed under PF/ESIC legislation. The benefit of Section 43B's extended due date is not applicable to employees' contributions. The disallowance made by the AO was restored. Issue 3 (ALV of unsold finished stock): The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s deletion of the addition. Following the consistent view of the Tribunal in the assessee's own case for AY 2013-14 and the CIT(A)'s subsequent orders, the Tribunal held that additions on account of deemed rent in respect of unsold flats held as stock-in-trade are not sustainable. The principle of judicial consistency was applied.

The Tribunal held that the addition of Rs. 49,59,915/- under section 68 of the Act was not sustainable. The Tribunal noted that the assessee had purchased shares through banking channels, received shares in Demat account post-amalgamation sanctioned by the High Court, held them for over two years, and sold them on the BSE through registered brokers with STT paid, with sale proceeds received through banking channels. The Tribunal emphasized that suspicion cannot replace legal proof and the Revenue had failed to discredit the documentary evidence or provide any material to show cash transactions or the assessee's involvement in price rigging. Following the decisions of the Gujarat High Court in PCIT v. Divyaben Prafulchandra Parmar and PCIT v. Sanjaykumar Damjibhai Gangani, and the Madhya Pradesh High Court in CCIT (OSD) v. Nilesh Jain (HUF), which dealt with the same scrip and assessment year, the Tribunal directed the deletion of this addition. Consequently, the consequential addition of Rs. 2,47,995/- under section 69C was also deleted as it was based on the primary addition under section 68. Grounds 3 and 4 were allowed.

The Tribunal held that the additions made by the AO under Section 68 of the Act for unsecured loans in AY 2004-05 and 2005-06 were rightly confirmed as the assessee failed to provide evidence. The addition for business profits based on a recovered financial statement was also confirmed for similar reasons.

The Tribunal held that the learned CIT(Exemptions) erred in imposing the condition that the registration under section 12AB and approval under section 80G, along with consequential tax benefits, would be subject to the outcome of a proposed Special Leave Petition. The Tribunal reasoned that once the CIT(Exemptions) accepted the binding judgment of the jurisdictional High Court in 'Chamber of Tax Consultants v. CIT (Exemptions)', they could not dilute that grant by making it conditional on a proposed challenge. A judgment of the jurisdictional High Court is binding on tax authorities unless stayed, modified, or reversed. A mere proposal to challenge does not reduce its binding force. The Tribunal relied on its own coordinate bench decisions in 'ILLA Rajesh Foundation v. CIT (Exemptions)', 'Keshavlal Vajechand Kapadia Charity Trust v. CIT (Exemptions)', and 'Bai Manekbai A. Dubash Hareshwar Pandit Trust v. CIT (Exemptions)', which held that such contingent conditions are unsustainable. The Tribunal directed the CIT(Exemptions) to delete the conditional rider, and the registration/approval shall operate in accordance with law without the qualification. The Tribunal noted that if the legal position is subsequently altered by the Supreme Court, consequences would follow at that stage.

The Tribunal held that a penalty under section 270A is necessarily founded upon under-reported or misreported income as determined in accordance with the Act. Any modification to the additions in the quantum proceedings would materially affect the leviability and quantum of the penalty. Therefore, adjudicating the penalty appeal while the underlying additions are still under appellate review would be premature. The Tribunal set aside the impugned order and restored the penalty appeal to the file of the CIT(A). The CIT(A) is directed to first dispose of the quantum appeal and thereafter adjudicate the penalty appeal afresh, considering the outcome of the quantum proceedings and providing the assessee with a reasonable opportunity of hearing. The assessee is also directed to cooperate and provide necessary material. The grounds raised by the assessee are allowed for statistical purposes.

The Tribunal held that the assessee is entitled to the deduction under Section 54 of the Income Tax Act, 1961. The Tribunal reasoned that for an under-construction property, the date of possession, when the property becomes ready for occupation and full consideration is paid, should be considered the date of purchase. This is because the assessee acquired the right to purchase, not the purchased property itself, until possession was delivered. The Tribunal applied the principle laid down by the Jurisdictional High Court in CIT v. Smt. Beena K. Jain, which emphasizes considering the substance of the transaction and the date of substantial completion, full payment, and possession. The Tribunal noted that the possession date of 18.01.2012 falls within one year before the sale of the old flats on 07.05.2012, satisfying the conditions of Section 54. The Assessing Officer was directed to allow the deduction. No issue was expressly left undecided.

The Tribunal held that the present case is not one of complete non-furnishing of Form No. 10, but rather a case of belated furnishing. The Tribunal considered the explanation provided through the affidavit regarding the illness of the accountant and trustees, and the lack of familiarity with tax procedures, stating that the delay was neither wilful nor occasioned by gross negligence. The Tribunal found relevance in the Gujarat High Court's decision in CIT (E) v. Bochasanwasi Shri Akshar Purshottam Public Charitable Trust, which held that inaccuracies or lack of complete declaration in the prescribed format would not be fatal if the purpose of accumulation can be satisfactorily established. The dismissal of the Revenue's SLP by the Supreme Court was also noted. Therefore, the Tribunal considered it appropriate to examine the assessee's claim on its substantive compliance rather than rejecting it solely on account of the delay. However, the satisfaction of Section 11(2) conditions, correctness of Form No. 10, and the purpose/utilization of accumulated funds require factual verification. Accordingly, the Tribunal set aside the impugned order and restored the matter to the AO with a direction to admit Form No. 10, verify its particulars and compliance with Section 11(2), and adjudicate the claim afresh. The assessee was directed to cooperate with the assessment proceedings and furnish requisite documents, and the AO was directed to afford a reasonable opportunity of being heard.

The Tribunal held that the assessee satisfied the conditions for claiming exemption under Section 54F of the Act. The Tribunal relied on various High Court judgments, including Pr. CIT v. C. Gopalaswamy (Karnataka High Court), CIT v. Girish L. Ragha (Bombay High Court), and CIT Vs. Kuldeep Singh (Delhi High Court). These judgments established that the essence of Section 54F is whether the assessee has invested the capital gains in the purchase or construction of a residential house. Merely because the construction was not completed in all respects or possession was not obtained within the prescribed period, the benefit under Section 54F cannot be denied. The Tribunal noted that the assessee had purchased the residential property within the stipulated time frame and deposited the unutilized amount in the Capital Gains Scheme Account before the due date of filing the return. The Tribunal found that the AO's addition, as affirmed by the CIT(A), was deleted. The appellate order of the CIT(A) was upheld, and the grounds of appeal of the Revenue were dismissed. The issue regarding owning more than one residential house was not expressly decided.

The Tribunal held that the assessee's explanation for the delay in filing appeals before the CIT(A) was bona fide and supported by attending circumstances and her sworn affidavit. The Tribunal noted that there was no material to demonstrate the assessee's personal receipt of notices or actual knowledge of the proceedings. The assertion of not residing at the PAN address, not being registered on the e-filing portal until 25.09.2025, and gaining knowledge of demands only on 04.02.2026 was not rebutted. Citing Supreme Court judgments in Collector, Land Acquisition v. Mst. Katiji & Others and N. Balakrishnan v. M. Krishnamurthy, the Tribunal found that the assessee was prevented by sufficient cause and condoned the delay in all four appeals, admitting them for adjudication on merits. Regarding the quantum addition, the Tribunal found that the Agreement for Sale and Deed of Assignment represented a single transaction for one property with a consideration of ₹1,10,00,000, not two independent purchases. The Deed of Assignment expressly referred to the Agreement for Sale. The Tribunal also noted that the property was financed through a housing loan from ICICI Bank, with the assessee as a joint holder and co-applicant, and no part of the consideration represented her unexplained investment. Therefore, the addition of ₹2,20,00,000 was deleted. The penalties under sections 271(1)(c), 271(1)(b), and 271F were consequently deleted as they were consequential to the addition.

The Tribunal held that the additions made by the AO under Section 68 of the Act for unsecured loans in AY 2004-05 and 2005-06 were rightly confirmed as the assessee failed to provide evidence. The addition for business profits based on a recovered financial statement was also confirmed for similar reasons.

The Tribunal held that the notice issued under Section 148 for AY 2013-14 on 27.03.2021 was indeed barred by limitation under Section 149(1)(b) of the Act, as the six-year period expired on 31.03.2020. Following the Bombay High Court's decision in The New India Assurance Company Limited, the reassessment proceedings were quashed as void ab initio. The decisions in Union of India v. Ashish Agrawal and Rajeev Bansal v. Union of India were distinguished as they dealt with notices issued after 01.04.2021. Consequently, the reassessment order for AY 2013-14 was quashed, and the Revenue's appeal for this year was dismissed. For AY 2010-11 and AY 2012-13, the Tribunal found that the AO made additions (unsecured loans and interest) that were not part of the 'reasons to believe' recorded for reopening the assessment (bogus accommodation entries). Following the jurisdictional High Court's ruling in CIT v. Jet Airways (I) Limited, where the AO does not assess the income forming the basis of 'reasons to believe', they cannot assess other income. Since the initial basis for reopening was dropped, the AO lost jurisdiction to make the subsequent additions. Therefore, these additions were deleted, and the Revenue's appeals for AY 2010-11 and AY 2012-13 were dismissed.

The Tribunal followed a coordinate bench's decision for the preceding year and reduced the profit element on non-genuine purchases from 12.5% to 5%. The rejection of books of account was not granted separate relief as the addition was restricted to profit element.

The Tribunal held that the assessment proceedings commenced during a period affected by COVID-19, and practical difficulties in collecting documentary evidence should be considered. Substantial justice requires admitting relevant evidence, even if submitted late, especially when it pertains to the core of the dispute.