ITAT Nagpur Judgments — March 2026

The Tribunal held that the price at which electricity distribution companies supply electricity to consumers, or the price at which industrial units purchase power from the State Electricity Board, can be applied as a valid comparable for determining the ALP. The grounds of appeal raised by the revenue were rejected.

The Tribunal held that an assessment order passed in the name of a deceased person without bringing the legal heirs on record is void ab initio. Consequently, revision proceedings under section 263 based on such an invalid assessment order are also unsustainable.

The Tribunal held that the delay in filing the appeal before the CIT(A) was not with malafide intention and should be condoned based on a liberal interpretation of "sufficient cause". The Tribunal restored the issues to the file of the CIT(A) for denovo adjudication.

The Tribunal held that since the CIT(A) passed an ex-parte order without dealing with the merits of the case, it was appropriate in the interest of justice to restore the issues to the file of the CIT(A) for fresh adjudication.

The Tribunal held that mere receipt of money under an agreement to sell does not automatically result in taxable income. Since no sale deed was executed, no transfer occurred as per Section 2(47) of the Act, and the amount retained the character of an advance. Furthermore, the assessment was vitiated due to the absence of a mandatory notice under Section 143(2) of the Act.

The Tribunal held that the price at which electricity distribution companies supply electricity to consumers, or the price at which industrial units purchase power from the State Electricity Board, can be applied as a valid comparable for determining the ALP. The grounds of appeal raised by the revenue were rejected.

The Tribunal noted the assessee's request for another opportunity to present their case before the CIT(A). Since the original assessment was ex-parte and the Departmental Representative had no objection, the Tribunal decided to remit the matter back to the CIT(A).

The Tribunal condoned the delay in filing the appeal before the CIT(A), noting that a significant portion of the delay occurred during the COVID-19 pandemic. The Tribunal set aside the findings of the CIT(A)/NFAC and restored the issues to the CIT(A) for fresh adjudication.

The Tribunal found discrepancies in the assessee's explanation regarding the cash in hand and the deposits made. To balance the revenue's interest and the assessee's position, the Tribunal decided to sustain 50% of the addition.

The Tribunal held that at the stage of registration, the inquiry is limited to the objects of the trust and prima facie genuineness of activities, which were not doubted. It found the rejection based on insufficiency of evidence and bank transactions unjustified, as these fall under assessment proceedings, and directed the CIT(E) to grant registration.

The Tribunal held that the delay in filing Form 10B, especially considering the impact of the COVID-19 pandemic, was a procedural lapse and not a ground to deny the benefit of exemption under sections 11 and 12. Citing various High Court and ITAT rulings, the Tribunal considered the filing of Form 10B as directory, not mandatory.

The Tribunal held that the compensation received on compulsory acquisition of land, including the interest component, is exempt from tax under Section 10(37) of the Income Tax Act. The lower authorities erred in treating the compensation amount as income from other sources.

The Tribunal noted that the CIT(A)'s order was non-speaking and lacked merit-based discussion. In the interest of justice, the Tribunal decided to grant the assessee another opportunity to explain the property transaction.

The Tribunal held that the assessees deserve one more opportunity to explain their objects and activities for seeking registration under section 12AB. While the CIT(E) noted that the assessees did not provide point-wise replies and merely furnished a list of donations, it was not clarified whether these donations were to institutions with similar objectives or if they were in line with the assessee's objects. The Tribunal found that the assessees had furnished some details and evidence initially and in response to the show-cause notice. Therefore, the matters were restored back to the file of the CIT(E) for fresh consideration, with a direction to allow a fair and reasonable opportunity to the assessees. The assessees were also advised to be more vigilant in future. The grounds of appeal were allowed for statistical purposes.

The Tribunal held that the CIT(A) was justified in deleting the addition made under Section 40A(3). The Tribunal found that the assessee acted as a commission agent (Kachha Arhatia) for the sale of raw cotton in the APMC, facilitating sales for agriculturists. Payments were received from purchasers through banking channels and then paid in cash to the agriculturists. The Tribunal noted that the AO did not dispute the withdrawal of cash or the nature of the business activities, nor the payments made to farmers, but disallowed them on an ad-hoc basis due to incomplete addresses. The Tribunal observed that in villages, persons are often known by name, and the assessee had provided 'kapus hisob patti' containing names and addresses. The Tribunal also found that no fresh or additional evidence was filed before the CIT(A), negating the Revenue's ground regarding Rule 46A. Therefore, the Tribunal affirmed the CIT(A)'s order, holding that the assessee fell within the exceptions of Rule 6DD and no disallowance under Section 40A(3) was warranted. The appeal of the Revenue was dismissed, and the Cross Objection was dismissed as infructuous.

The Tribunal held that while the CIT(E) was of the view that the assessee had not furnished a point-wise reply and merely provided a list of donations, it was not clarified whether the recipient institutions had similar objectives. The Tribunal found that the assessee deserved one more opportunity to explain its objects and activities for seeking registration under section 12AB. Consequently, the matters were restored back to the file of the CIT(E) to reconsider the applications afresh. The CIT(E) was directed to allow a fair and reasonable opportunity to the assessee before passing an order. The assessee was also advised to be more vigilant in future regarding timely compliance and providing required details. The grounds of appeal were allowed for statistical purposes.

The Tribunal held that the assessees deserved one more opportunity to explain their objects and activities for seeking registration under section 12AB. The Tribunal noted that the assessees had furnished certain details and evidence at the time of filing the application and also submitted a reply with additional details in response to the show-cause notice. While the CIT(E) viewed the reply as a mere list of donations and not a point-wise response, the Tribunal found it was not clarified whether the institutions to which donations were made had similar objectives. Consequently, the Tribunal restored the matters back to the file of the CIT(E) for reconsideration of the applications afresh. The CIT(E) was directed to provide a fair and reasonable opportunity to the assessees before passing an order. The assessees were also advised to be more vigilant in future regarding timely compliance and providing required details. The grounds of appeal were allowed for statistical purposes.

The Tribunal held that the assessees deserved one more opportunity to explain their objects and activities for seeking registration under Section 12AB. While the CIT(E) noted that the assessees had not provided a point-wise reply to the show cause notice and had merely furnished a list of donations, the Tribunal found that it was not clarified whether the recipient institutions had similar objectives as the assessees. The Tribunal acknowledged that the CIT(E) was of the view that donations given to other institutions were as per the objects of the assessee. However, considering the facts and circumstances, the Tribunal decided to restore the matters to the file of the CIT(E) for a fresh consideration of the applications. The CIT(E) was directed to allow a fair and reasonable opportunity to the assessees before passing an order. The assessees were also advised to be more vigilant in future regarding timely compliance and providing required details. The appeals were allowed for statistical purposes.

The Tribunal noted that a portion of the land was acquired by NHAI and the DVO's valuation for the remaining 0.87 hectare land was Rs. 95,12,100/-, which was less than the purchase consideration. Therefore, there was no justification for invoking Section 56(2)(x).