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1,140 orders · Page 9 of 23
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.
The Tribunal restored the appeals to the file of the CIT(A) for fresh adjudication. The assessee was directed to provide documentary evidence for its financial hardship claims, and the CIT(A) was instructed to consider the matter on merits after providing an opportunity of being heard.
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 restored the appeals to the file of the CIT(A) for fresh adjudication. The assessee was directed to provide documentary evidence for its financial hardship claims, and the CIT(A) was instructed to consider the matter on merits after providing an opportunity of being heard.
The Tribunal upheld the CIT(A)'s deletion of the addition, finding that the Assessing Officer erred by considering commission from only one principal and ignoring others. The Tribunal also found no merit in the Revenue's contention that the CIT(A) should have obtained a remand report.
The Tribunal restored the appeals to the file of the CIT(A) for fresh adjudication. The assessee was directed to provide documentary evidence for its financial hardship claims, and the CIT(A) was instructed to consider the matter on merits after providing an opportunity of being heard.
The Tribunal restored the appeals to the file of the CIT(A) for fresh adjudication. The assessee was directed to provide documentary evidence for its financial hardship claims, and the CIT(A) was instructed to consider the matter on merits after providing an opportunity of being heard.
The Tribunal held that the reassessment proceedings under Section 147 were invalid because the same issues had already been considered and dealt with in the Section 263 proceedings. The Tribunal upheld the CIT(A)'s finding that the reassessment order was unsustainable in law.
The Tribunal first addressed Ground No. 1 concerning the limitation period. It noted that the DRP directions were dated 13.08.2025 and the final assessment order was passed on 29.10.2025. Section 144C(13) mandates that the AO complete the assessment within one month from the end of the month in which the DRP's directions are received. The Tribunal, respectfully following the binding judgment of the Hon'ble Bombay High Court in *Principal Commissioner of Income-tax v. Sterling Oil Resources Ltd.*, held that the time limit under section 144C(13) is mandatory. Since no material was placed by the Revenue to show that the DRP directions were received by the AO after August 2025, the period prescribed expired on 30.09.2025. Consequently, the assessment order dated 29.10.2025 was held to be barred by limitation and invalid. Ground No. 1 was allowed. The Tribunal granted liberty to the Revenue to move an application for recall if it could produce contemporaneous documentary evidence that the DRP directions were received in September 2025. As the assessment order was quashed on limitation, the remaining grounds (2 to 5) challenging the TPO reference and transfer pricing adjustment were rendered academic and not adjudicated.
The Tribunal allowed the assessee's appeal on the primary ground concerning the transfer pricing adjustment. It held that the assessee had demonstrated extraordinary under-utilisation of capacity during FY 2020-21 due to the COVID-19 pandemic, which materially affected its profitability. Relying on decisions in Sureprep (India) Pvt. Ltd. and Arcadia Consulting Services Private Limited, the Tribunal found that extraordinary economic circumstances and consequential abnormal costs require suitable adjustment, and comparability cannot be rejected solely due to the non-availability of identical information for comparable companies. The Tribunal noted that the Ld. TPO had not provided material to show that comparable companies suffered an identical degree of idle capacity. The Tribunal concluded that the assessee's demonstrated abnormality could not be disregarded. Consequently, the extraordinary under-utilisation/COVID adjustment made by the assessee was accepted, resulting in an OP/OC margin of 7.71%, which falls within the arm's length range. The transfer pricing adjustment of INR 114,172,508/- was directed to be deleted. Grounds 1, 2, and 3(a) & 3(b) were allowed. Grounds 3(c) and 3(d), being alternative pleas, and the additional ground regarding the time bar were left undecided as academic, given the relief granted on merits. The operative direction was the deletion of the transfer pricing adjustment.
The Tribunal held that the notice issued under section 148 of the Income-tax Act, 1961, dated 14/04/2022, was bad in law and invalid. The Tribunal noted that the issue of validity of notice under section 148, particularly in light of the concession made by the Revenue before the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal, goes to the root of the reassessment jurisdiction. Since the ground could be decided on the material already on record, the Tribunal proceeded to adjudicate it. The Tribunal found that the notice was issued beyond the period of limitation prescribed under the Act, especially in view of the pronouncements of the Hon'ble Supreme Court and various High Courts concerning the applicability of the proviso to section 147 and the consequences of the concession made by the Revenue. Therefore, the reassessment proceedings initiated by the impugned notice were quashed. The Tribunal did not decide on the merits of the income determination as the jurisdictional issue was decided against the Revenue.
The Tribunal held that mere issuance of Form 2 does not automatically settle the tax arrears; withdrawal of the appeal is a necessary subsequent step. Therefore, the CIT(A) was not justified in dismissing the appeal without adjudicating on merits.
The Tribunal held that the reassessment proceedings were initiated without obtaining approval from the competent specified authority under Section 151(ii). The order under Section 148A(d) and notice under Section 148, both dated 02.04.2022, were issued more than three years after the end of Assessment Year 2018-19. The Principal Commissioner of Income-tax, Bengaluru-3, who granted approval, was not the specified authority under Section 151(ii) for this period. The Tribunal found this defect to be jurisdictional, going to the root of the assumption of jurisdiction, and not a mere procedural irregularity. Consequently, the notice under Section 148 was deemed invalid, and the assessment order dated 05.02.2024 and the impugned appellate order, being consequential to an invalid assumption of jurisdiction, were quashed. The Tribunal noted that the dismissal of the Special Leave Petition by the Supreme Court in ITO v. Prakash Pandurang Patil [2025] did not contain an independent exposition of law but left the Bombay High Court's judgment intact. In view of quashing the reassessment proceedings, the issues concerning the addition under Section 69 and the sources of investment were rendered academic, and the Tribunal refrained from adjudicating them. The legal challenge in grounds 1 and 2 was allowed.
The Tribunal held that the CIT(A) erred in dismissing the appeal solely on the ground of delay without properly ascertaining the date of service of the assessment order and notice of demand. The Tribunal noted that the impugned appellate order did not contain any material establishing the service of the assessment order or notice of demand in March 2015 or before February 2017. The fact that a copy of the assessment order was issued on 14.02.2017, as recorded in the CIT(A)'s order, was seen as corroborative of the assessee's claim of acquiring knowledge in February 2017. The Tribunal found that the delay, if any, was condonable, as the assessee had shown sufficient cause. The principle of substantial justice was emphasized. The CIT(A)'s order was set aside, and the appeal was restored for fresh adjudication on merits, including the validity of reassessment, service of notices, and the addition of Rs. 48,75,009/-. The Tribunal clarified that it had not expressed any opinion on the merits of the reassessment or the addition.
The Tribunal held that the penalty notice under Section 272A(2)(c) was issued in consequence of the assessee's failure to submit documents specified in a notice under Section 133(6), prior to the initiation of reassessment proceedings. Although the reassessment proceedings were later quashed, the penalty survived. However, following the ratio of the Co-ordinate Bench decision in Jay Ketan Parikh v. Addl. CIT, the Tribunal found that the assessee was asked to execute a document (Consent Waiver Form) rather than produce a document already in his possession. The provision under Section 133(6) read with Section 272A(2)(c) does not cover a situation where the assessee is compelled to execute a document. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and directed the Ld. AO to delete the penalty of Rs. 36,400/-. No issue was expressly left undecided.
The Tribunal noted that a similar appeal had already been filed and was pending. Consequently, the current appeal was deemed infructuous and allowed to be withdrawn.
The Tribunal held that since the reassessment proceedings, in the course of which the penalty under Section 271(1)(c) was initiated, had been quashed by the Tribunal's order dated 17/09/2026, the impugned penalty could no longer survive. Consequently, the order of the CIT(A) dated 24/02/2026, which confirmed the penalty, was set aside. The Assessing Officer was directed to delete the penalty levied under Section 271(1)(c) of the Act. The principle established is that a penalty levied as a consequence of assessment proceedings is unsustainable if the assessment proceedings themselves are invalidated. No other issues were expressly left undecided.
The Tribunal held that the assessee is entitled to the benefit of Section 115BAA for AY 2021-22. The Tribunal noted that the assessee had exercised the option in its return of income, filed within the extended due date. While Form 10-IC was filed on October 31, 2022, and reflected for AY 2022-23 due to technical issues on the portal, this procedural mismatch should not defeat the substantive option exercised. The Tribunal relied on CBDT Circular No. 19/2023, which condoned delays in filing Form 10-IC for AY 2021-22, and judicial precedents from the Mumbai, Calcutta, and Gujarat High Courts, which also took a lenient view in cases of technical difficulties. The Tribunal directed the CPC/Assessing Officer to treat the Form 10-IC filed on October 31, 2022, as sufficient compliance and allow the benefit of Section 115BAA, recomputing the tax liability accordingly. Consequently, the computation of tax under Section 115JB (MAT) was deleted as per Section 115JB(5A)(ii), and interest under Sections 234B and 234C was to be recomputed. Grounds 1, 2, and 3 were allowed.
The Tribunal found that the Assessing Officer (AO) made the disallowance in a hurried manner without proper application of mind and without considering the details filed by the assessee. The basis for the estimated disallowance of 8% was also found to be without a cogent basis. The CIT(A) affirmed the addition without independent application of mind or providing justifiable reasons. Considering the factual matrix, the Tribunal was of the view that the matter required reconsideration by the AO in the interest of justice and fair play. The AO was directed to allow adequate opportunity of hearing to the assessee to substantiate its contentions. The learned DR did not object to the proposed remand. Therefore, the appellate order was set aside, and the matter was restored to the file of the AO for a de novo assessment. The grounds of appeal were allowed for statistical purposes.
The Tribunal held that the assessment order was unsustainable in law due to two independent defects: the assessment could not be validly completed under section 143(3) after a search when Explanation 2 to section 148 applied, and there was a failure to obtain the mandatory prior approval under section 148B.
The Tribunal held that the issue regarding depreciation on the toll road as an intangible asset under Section 32(1)(ii) is squarely covered by the decision of a coordinate bench of the ITAT in the assessee's own case for AY 2011-12 and AY 2012-13. The coordinate bench had relied on the decision in North American Expressway Limited, holding that the assessee is entitled to depreciation on the cost incurred on toll roads, treating them as intangible assets. Therefore, the grounds raised by the Revenue concerning depreciation were dismissed. Regarding the treatment of expenditures totaling Rs. 3,92,02,640, the Tribunal affirmed the findings of the CIT(A). The Tribunal held that following the matching principle, these expenditures needed to be allowed. Since the Commercial Operation Date (COD) was achieved on March 1, 2011, and corresponding annuity income was recognized on an accrual basis for the post-COD period, expenses incurred for operation, maintenance, administration, and finance charges post-COD cannot be capitalized or amortized. They must be allowed as revenue expenditure under Section 37(1) to uphold the matching principle. The CIT(A)'s order was affirmed, and the grounds raised by the Revenue in this regard were dismissed.
The Tribunal observed that while the assessee relied on an application dated 20.08.2025 for condonation of delay, no acknowledgment of its filing before the learned Commissioner was provided. Therefore, it could not be concluded that the application was made available to the Commissioner, and the impugned order did not reference it. Consequently, the plea for condonation of delay could not be entertained solely based on an unproven application. However, noting that the learned Commissioner dismissed the appeal in limine without adjudicating on merits, and considering the assessee's submission that the incorrect statement in Form No. 35 was due to erroneous advice or inadvertence, the Tribunal deemed it appropriate to set aside the impugned order. The matter was remanded to the learned Commissioner for a fresh decision on the question of limitation, after affording the assessee a reasonable opportunity of being heard. The assessee was directed to file an appropriate application for condonation of delay, supported by an affidavit and documentary evidence.
The Tribunal held that the rejection of the assessee's application for registration under section 12AB of the Income Tax Act, 1961, was not valid. The reasoning was that the impugned order did not record any instance where an opportunity of being heard was provided to the assessee before rejecting the application on the grounds of missing a requisite document (Form No. 10AC). The Tribunal considered the undertaking by the Ld. Counsel for the Assessee to furnish all required submissions and documents. In the interest of justice, the Tribunal set aside the impugned order and restored the application to the file of the Ld. Commissioner. The Ld. Commissioner was directed to adjudicate the application afresh after providing a reasonable opportunity of being heard to the assessee. The assessee was also directed to promptly furnish the requisite documents and cooperate with the proceedings without seeking unnecessary adjournments. The appeal was allowed for statistical purposes.
The Tribunal decided the following: Regarding the corporate guarantee (Grounds 20-23), the Tribunal restored the issue of computation of the arm's length rate to the file of the TPO. It held that the interest-saving approach is a recognized method for benchmarking corporate guarantees, but the rate accepted in one case cannot be automatically applied to another. The TPO must examine the assessee's interest-saving analysis, the borrower's standalone credit profile, borrowing rates with and without the guarantee, currency, tenure, security, and extent of guarantee coverage to quantify the economic benefit and compute the appropriate remuneration. The TPO's rate of 1% based on commercial bank guarantees and the assessee's rate of 0.30% were not sustained without proper factual examination. Regarding the set-off of current-year business loss (Ground 24), the Tribunal directed the Assessing Officer to verify the return of income, computation, and assessment records and allow the set-off to the extent permissible under the Act. The Tribunal did not explicitly rule on all the grounds related to transfer pricing adjustments concerning integrated IT enabled services, the time-barring of the assessment, or the specific challenges to the RPSM application and comparable selections. However, by allowing grounds 20-23 and 24 for statistical purposes and stating the appeal is partly allowed, it indicates that some issues were resolved in favor of the assessee, while others might have been remanded or not fully decided in the provided excerpt. The ratio for benchmarking corporate guarantees is that the interest-saving approach requires a detailed, fact-specific analysis of the borrower's credit profile and borrowing costs, rather than mechanical application of rates from other cases or reliance on bank guarantee data without adjustments.
The Tribunal held that the CIT(E) was not justified in rejecting the application at the threshold solely for the absence of a formal trust deed, Memorandum of Association, or a scheme. The Tribunal reasoned that Rule 17A(2) distinguishes between institutions created under an instrument (clause a) and those created otherwise (clause b), with the latter requiring a document evidencing creation. The Schedule II application and the Charity Commissioner's registration certificate, when considered cumulatively, provide substantive evidence of the assessee's creation, establishment, and continued existence, especially for an old institution. The Tribunal also clarified that a scheme is not an invariable condition for registration. However, since the CIT(E) had not examined other statutory parameters under section 12AB, the matter was restored to the CIT(E)'s file for examining the objects, genuineness of activities, and compliance with other relevant laws. The CIT(E) was directed not to reject the application on the grounds of lacking a formal trust deed or scheme, and to consider the furnished documents on their substantive evidentiary worth. The Tribunal also clarified that issues related to the actual application of income under sections 11 to 13 are typically dealt with during assessment proceedings.
The Tribunal dismissed the appeals filed by the assessee. The primary reason for dismissal was the assessee's failure to appear before the Tribunal on multiple occasions and the absence of any written submissions or corroborative details to support its grounds of appeal. Citing the Bombay High Court's decision in Chemipol vs. Union of India and the Supreme Court's decision in Nandramdas Dwarkadas, the Tribunal held that it is axiomatic that proceedings cannot be continued when the party who moved the court has not appeared. Furthermore, the Tribunal found no infirmity in the order of the CIT(A). The CIT(A) had held that the payment of the demand under Section 201(1)/201(1A) did not erase the original default in deducting TDS. The CIT(A) distinguished the assessee's case from the Supreme Court rulings in M/s. US Technologies International Pvt. Ltd. and Bank of Nova Scotia, stating that the assessee failed to deduct TDS itself, unlike cases involving belated remittance of deducted taxes. The penalty under Section 271C was sustained as the payment was made only after being deemed in default and not voluntarily. The Tribunal confirmed the CIT(A)'s decision for both assessment years.
The Tribunal dismissed the Revenue's appeal. Regarding the addition of Rs. 45,00,000/- under Section 68, the Tribunal found that the factual matrix of the present case was different from the cited case of Bajaj International Realty Pvt. Ltd. In Bajaj International, the assessee had not produced substantive material demonstrating the lender's financial capacity independent of alleged entry operations, and no documentary evidence supporting creditworthiness was filed before the Tribunal. In contrast, the present assessee had provided audited financial statements of M/s. Aneri Fincap Ltd., which showed a substantial capital base, a significant loan portfolio, its status as an RBI-registered NBFC and listed company, movement of funds through banking channels, payment of interest after TDS, and subsequent repayment of the loan. The assessment order itself recorded the filing of the lender's ITR, bank statement, confirmation, and financial statements. The Ld. CIT(A) had examined the lender's financial capacity based on these records and accepted the three ingredients of identity, creditworthiness, and genuineness. The Tribunal found the factual findings in cases like Kalpana Ramesh Jain and Satish Sawarmal Saraf to be more comparable, where the identity, creditworthiness, and genuineness were established. Therefore, the Tribunal found no reason to interfere with the Ld. CIT(A)'s deletion of the addition under Section 68. Consequently, the consequential addition of Rs. 2,58,904/- for unexplained interest expenditure could not independently survive once the underlying loan transaction was accepted. The grounds raised by the Revenue were accordingly dismissed.
The Tribunal held that the explanation for the delay was inconsistent, lacked credibility, and did not constitute sufficient cause. The Tribunal noted contradictory statements regarding the dates of the orders and the receipt of communication.
The Tribunal condoned the delay of 121 days in filing the appeal before the NFAC. It reasoned that the delay arose from the assessment order being communicated electronically to an infrequently accessed email address and the subsequent time taken for professional assistance and document compilation. The Tribunal found the explanation supported by an affidavit and lacking any indication of deliberate or mala fide delay, applying the principle of liberal construction of 'sufficient cause' from the Supreme Court's decision in Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. to advance substantial justice. On the merits, the Tribunal quashed the notice dated July 19, 2022, issued under Section 148 and the consequential assessment order dated May 9, 2023. This was based on the jurisdictional Bombay High Court's decision in Alag Property Construction Private Limited v. Assistant Commissioner of Income Tax & Ors., which held that approval by the competent specified authority under Section 151(ii) is a jurisdictional precondition. In the present case, the notice was issued after three years from the end of AY 2017-18, and approval was obtained from the Principal Commissioner, who was not the specified authority under Section 151(ii). Consequently, the reassessment proceedings were quashed for non-compliance with Section 151(ii). Adjudication of other grounds on the merits of the addition was rendered futile and left open.
The Tribunal held that, considering the peculiar facts and circumstances and in the interest of substantial justice, it was appropriate to grant the Assessee one more opportunity to substantiate its claim for registration under section 12AB of the Act. The Tribunal acknowledged that the Assessee claimed to have filed a response with supporting documents, which was not addressed in the impugned order. Therefore, the Tribunal set aside the impugned order passed by the Commissioner. The matter was remanded to the Commissioner for a fresh decision after providing the Assessee with a reasonable opportunity of being heard and furnishing the required submissions, clarifications, and documents. The Tribunal explicitly stated that it was not entering into the controversy of whether the response and documents were indeed filed, but rather focusing on providing an opportunity for substantiation. The appeal was allowed for statistical purposes.
The Tribunal held that the additional evidence, including cash book, purchase register, invoices, and bank statements, was essential for proper adjudication. While acknowledging the allegations against the erstwhile consultant, the Tribunal found no evidence that the assessee deliberately sought to defeat the law. The Tribunal admitted the additional evidence, subject to the assessee depositing Rs. 22,000/- with the Revenue Department within 15 days. Due to the need for detailed examination of this newly admitted evidence, the Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) for fresh adjudication. The Commissioner (Appeals) is to examine the additional evidence, consider the assessee's explanations, and afford a reasonable opportunity of being heard. The Tribunal explicitly stated that no opinion was expressed on the merits of the additions.
The Tribunal held that the assessment order was framed without valid assumption of jurisdiction because the Assessing Officer failed to follow the statutory route prescribed under sections 147 and 148, and also failed to obtain the mandatory approval under section 148B. Therefore, the assessment order was quashed.
The Tribunal decided to remand the matter to the file of the Ld. Commissioner for a fresh decision. The reasoning was based on the peculiar facts and circumstances, acknowledging the Assessee's willingness to furnish the required documents and the Revenue's suggestion for remand. The Tribunal directed the Assessee to furnish the relevant approval granted under section 80G of the Act under the old regime, along with any other necessary documents, to the Ld. Commissioner. The Ld. Commissioner was instructed to afford the Assessee a reasonable opportunity of being heard. The Tribunal found that the prior 80G approval needed examination by the Ld. Commissioner. The appeal was allowed for statistical purposes.
The Tribunal condoned the delay of 404 days in filing the appeal, finding the reasons stated by the assessee to be bona fide, genuine, and sufficient, supported by medical documents and a sworn affidavit. The Tribunal relied on the Hon'ble Supreme Court's decision in Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors., emphasizing a liberal construction of "sufficient cause" to advance substantial justice. Regarding the merits, the Tribunal held that the assessee's application for approval under section 80G should not have been rejected merely for an inadvertent reference to clause (ii) of the first proviso to section 80G(5), when clause (iii) was applicable due to the provisional approval in Form No. 10AC. The Tribunal noted that the Ld. Commissioner himself observed the applicability of clause (iii) but rejected the application on the technical ground of the incorrect reference. Following decisions of coordinate benches in Rotary Charity Trust v. CIT (Exemption), Mumbai, and Shri Ram Ek Dharmada Trust v. CIT (Exemption), Mumbai, the Tribunal set aside the impugned order and restored the matter to the file of the Ld. Commissioner for fresh adjudication on merits, treating the application as filed under the correct provision (clause (iii)). The Tribunal also advised the Ld. Commissioner to consider the substance of such applications rather than rejecting them on technical grounds.
The Tribunal held that the addition of Rs. 72,45,296 (assessed as Rs. 72,55,534) made by the Assessing Officer and confirmed by the CIT(A) is deleted. The Tribunal reasoned that the Revenue had accepted the reclassification of the Santacruz flat as a commercial asset and allowed depreciation at 10% in Assessment Years 2006-07, 2007-08, and 2008-09. Once an asset becomes part of a block of assets carrying a 10% depreciation rate, its individual identity ceases for income-tax computation purposes under Section 2(11) read with Section 43(6). The Revenue cannot unilaterally extract a single asset from an existing running block to recreate an extinct 5% block in the year of sale. The Tribunal cited the principle that where an asset forms part of an ongoing block of assets eligible for depreciation at 10%, and the total sale proceeds are less than the opening WDV of the entire block, the consideration must be reduced from the block WDV. In this case, the opening WDV of the commercial block of assets was Rs. 3,84,39,183, which was significantly higher than the sale consideration of Rs. 90,00,000. Therefore, no short-term capital gain arose under Section 50. The appeal filed by the assessee is allowed.
The Tribunal held that the Vivad Se Vishwas settlement only covered the original assessment dispute and not the subsequent reassessment. On merits, the addition made during reassessment was deleted due to the Assessing Officer's failure to provide necessary particulars to the assessee.
The Tribunal held that the assumption of jurisdiction by the AO under Section 147 was bad in law, invalid, and without jurisdiction. The Tribunal relied on the decision of the Hon'ble jurisdictional High Court of Bombay in Sejal Jewellery v. Union of India, which held that once the foundation of reassessment proceedings is a search action on a third party, the provisions of Section 153C read with Section 153A would be applicable, and the Revenue cannot bypass these special provisions by resorting to general provisions of Section 147/148. The Tribunal also referred to the Supreme Court ruling in Abhisar Buildwell Private Limited, emphasizing the exclusivity of Section 153A/153C in search-related matters. Furthermore, a Coordinate Bench of the ITAT Mumbai in Leshark Global LLP v. DCIT, dealing with identical materials from the same search, held that resorting to Section 147/148 to bypass the mandatory provisions and safeguards of Section 153C is impermissible. Since the reassessment order was quashed on this preliminary jurisdictional issue, the remaining grounds raised by the assessee were rendered academic. The reassessment order passed by the AO under Section 143(3) read with Section 147 was quashed.
The Tribunal held that the assumption of jurisdiction by the AO under Section 147 was bad in law, invalid, and without jurisdiction. The Tribunal relied on the decision of the Hon'ble jurisdictional High Court of Bombay in Sejal Jewellery v. Union of India, which held that once the foundation of reassessment proceedings is a search action on a third party, the provisions of Section 153C read with Section 153A would be applicable, and the Revenue cannot bypass these special provisions by resorting to general provisions of Section 147/148. The Tribunal also referred to the Supreme Court ruling in Abhisar Buildwell Private Limited, emphasizing the exclusivity of Section 153A/153C in search-related matters. Furthermore, a Coordinate Bench of the ITAT Mumbai in Leshark Global LLP v. DCIT, dealing with identical materials from the same search, held that resorting to Section 147/148 to bypass the mandatory provisions and safeguards of Section 153C is impermissible. Since the reassessment order was quashed on this preliminary jurisdictional issue, the remaining grounds raised by the assessee were rendered academic. The reassessment order passed by the AO under Section 143(3) read with Section 147 was quashed.
The Tribunal held that the PCIT's order was passed in gross violation of the principles of natural justice. The PCIT recorded that the assessee had not responded to the show cause notice nor sought an adjournment. However, the Tribunal found, based on the paper book, that the assessee had indeed responded on 04.03.2026, prior to the hearing date of 05.03.2026, and had specifically requested an adjournment due to illness and the need to compile written submissions. This factual position contradicted the PCIT's premise for passing an ex parte order. Consequently, the Tribunal set aside the PCIT's order and restored the matter to the file of the PCIT for fresh adjudication. The assessee was granted liberty to raise all contentions, including jurisdictional aspects, and was directed to cooperate in the de novo proceedings without seeking unnecessary adjournments. The Tribunal refrained from deciding on the contentions regarding the initiation of proceedings at the instance of the AO/Range Head and the merger of issues with the CIT(A)'s order, leaving them open to be urged before the PCIT.
The Tribunal held that the additional ground regarding the invalidity of Section 147 proceedings due to the search origin was dismissed. Section 153C is attracted only upon fulfillment of specific statutory conditions, and the mere fact that information originated from a search does not automatically oust jurisdiction under Section 147. The assessee failed to establish foundational facts for Section 153C to be the exclusive route. On the merits of the Section 263 invocation, the Tribunal found that the conditions precedent for invoking Section 263 were not satisfied. The assessment order was not erroneous nor prejudicial to the revenue. The AO had made enquiries, considered the assessee's explanation, retraction, subsequent statement, affidavit, and judicial precedents, and adopted a legally possible view. The PCIT could not substitute his opinion for the AO's merely because he preferred a different view or because additions were made in earlier years. The Tribunal held that the PCIT's order was based on a misunderstanding of Section 263 and Explanation 2 thereof, as it did not demonstrate an error or lack of enquiry by the AO. The PCIT's direction for a detailed enquiry amounted to setting aside a concluded examination. Accordingly, the PCIT's order under Section 263 was quashed, and the assessment order was restored. The original grounds were allowed, and the additional ground was dismissed.
The Tribunal held that the assessment order was framed without valid assumption of jurisdiction because the Assessing Officer failed to follow the statutory route prescribed under sections 147 and 148, and also failed to obtain the mandatory approval under section 148B. Therefore, the assessment order was quashed.
The Tribunal dismissed the appeals filed by the assessee. The primary reason for dismissal was the assessee's failure to appear before the Tribunal on multiple occasions and the absence of any written submissions or corroborative details to support its grounds of appeal. Citing the Bombay High Court's decision in Chemipol vs. Union of India and the Supreme Court's decision in Nandramdas Dwarkadas, the Tribunal held that it is axiomatic that proceedings cannot be continued when the party who moved the court has not appeared. Furthermore, the Tribunal found no infirmity in the order of the CIT(A). The CIT(A) had held that the payment of the demand under Section 201(1)/201(1A) did not erase the original default in deducting TDS. The CIT(A) distinguished the assessee's case from the Supreme Court rulings in M/s. US Technologies International Pvt. Ltd. and Bank of Nova Scotia, stating that the assessee failed to deduct TDS itself, unlike cases involving belated remittance of deducted taxes. The penalty under Section 271C was sustained as the payment was made only after being deemed in default and not voluntarily. The Tribunal confirmed the CIT(A)'s decision for both assessment years.
The Tribunal condoned the delay in filing the appeal due to sufficient cause. It set aside the CIT(A)'s order and restored the matter to the Assessing Officer for fresh adjudication, emphasizing the need for factual examination of the expenditure.
The Tribunal held that the assessment order was framed without valid assumption of jurisdiction because the Assessing Officer failed to follow the statutory route prescribed under sections 147 and 148, and also failed to obtain the mandatory approval under section 148B. Therefore, the assessment order was quashed.
The Tribunal held that rejecting an application for statutory approval based on non-compliance with a single notice without providing a further effective opportunity is not justified. The matter was restored to the CIT for fresh consideration.
The Tribunal held that rejecting the application based on non-compliance with a single notice, without considering the assessee's explanation, did not provide an effective opportunity. The matter was restored to the CIT(E) for fresh adjudication.
The Tribunal noted that the substantive addition was based on treating credits in an HDFC Bank account, claimed by the assessee to belong to M/s Siddhivinayak Agency, as the assessee's turnover. The learned CIT(A) had rejected this claim due to a lack of documentary evidence, including the partnership deed, KYC details, PAN linkage, return of income, and tax audit report of the firm. The assessee submitted before the Tribunal that this evidence could now be produced. The Tribunal found that the ownership of the bank account and the nature of transactions are central to the addition and require examination of primary evidence. Therefore, in the interest of justice, the Tribunal set aside the impugned order and restored the appeal to the file of the learned CIT(A) for fresh adjudication. The CIT(A) was directed to admit and examine the evidence, conduct necessary inquiries, afford a hearing, and pass a speaking order on all grounds, including the legal grounds concerning reassessment validity and notice under section 143(2). The Tribunal explicitly stated it expressed no opinion on the merits of the legal grounds or the addition.
The Tribunal held that the assessment order dated 30.01.2025 passed under section 143(3) for AY 2023-24 was framed without valid assumption of jurisdiction. The search under section 132 was conducted on 22.12.2023, in the previous year relevant to AY 2024-25. Since AY 2023-24 is a year preceding the year of search, and the additions were founded on material recovered from that search, the AO was obligated to assume jurisdiction under section 147 by issuing a notice under section 148 and obtaining prior approval under section 148B. The Tribunal noted that no notice under section 148 was issued, and no approval under section 148B was recorded. This constituted a failure to invoke the correct jurisdictional gateway. Consequently, the assessment order was quashed as unsustainable in law. The Tribunal allowed the assessee's additional grounds (3 and 4). The assessee's grounds on merits and the Revenue's grounds were rendered academic and left open. The Revenue's cross-appeal was dismissed.
The Tribunal held that goodwill acquired for consideration falls under 'any other business or commercial rights of similar nature' under Section 32(1)(ii) and is eligible for depreciation. The subsequent amendment excluding goodwill from depreciable assets was held to be prospective.
The Tribunal held that the assessee is entitled to an exemption from deduction of tax at source under Section 194A(3)(v) of the Income-tax Act, 1961, concerning interest amounts paid to its depositors who are non-member co-operative societies. The Tribunal's reasoning was based on the decision of the Hon'ble Bombay High Court, which clarified that the inherent legal character of a co-operative bank as a co-operative society is not extinguished. The Court held that the legislature's intention, by specifically excluding co-operative banks in the first part of Section 194A(3)(v) but not in the second part, was to grant them exemption for interest payments to non-member co-operative societies. This interpretation was further fortified by CBDT Circular No. 19 of 2015, particularly paragraph 42.7, which explicitly states that the existing exemption under Section 194A(3)(v) from TDS on interest paid by a cooperative society to another cooperative society shall continue to apply to a co-operative bank. Consequently, the assessee cannot be held as an assessee-in-default under Section 201(1) read with Section 201(1A) for non-deduction of TDS on such interest payments. The impugned orders of the CIT(A) were upheld, and the grounds of appeal raised by the Revenue were dismissed. The Tribunal also noted that the facts and circumstances in other appeals were identical, and the findings would apply mutatis mutandis.