ITAT Panaji Judgments — April 2025

The Tribunal, applying principles of natural justice, noted that the CIT(A) had passed an ex-parte order despite potential valid reasons for the assessee's non-appearance. It set aside the order of the CIT(A) and remitted the entire disputed issues back to the CIT(A) for fresh adjudication on merits, directing that the assessee be provided adequate opportunity of hearing to substantiate their case with evidence.

The Income Tax Appellate Tribunal (ITAT) found that, as on the date of processing the return for AY 2019-20, the Central Processing Centre (CPC) did not have the statutory power under Section 143(1)(a)(v) to disallow deductions claimed under Chapter VI-A due to belated filing. The relevant amendment by the Finance Act, 2021, which extended this power, came into effect from 01/04/2021 and was not retrospective. Therefore, the ITAT concluded that the CPC had exceeded its jurisdiction, set aside the CIT(A)'s order, and directed the CPC to accept the assessee's claim for deduction.

The Tribunal observed that the CIT(A) incorrectly held the share of members of the AOP to be indeterminate, noting it was "Zero Percent" and therefore determinate. Recognizing that relief was granted in similar cases for earlier years, the Tribunal set aside the CIT(A)'s order and remitted the disputed issues back to the CIT(A) for fresh adjudication on merits, allowing the appeals for statistical purposes.

The Tribunal found that the CIT(A) erred in confirming the applicability of MMR and in observing that the share of AOP members was indeterminate, especially when no profit was distributed. The Tribunal set aside the CIT(A) order and remitted the entire disputed issues back to the CIT(A) for fresh adjudication after providing adequate opportunity to the assessee.

The Tribunal observed that the CIT(A) erred in applying Section 167B and in deeming the AOP members' share indeterminate, when it was explicitly 'Zero Percent' and thus determinate. Citing a similar relief granted by the appellate authority in A.Y. 2023-24, the Tribunal set aside the CIT(A)'s order and remitted all disputed issues back to the CIT(A) for fresh adjudication. The appeals were allowed for statistical purposes.

The Tribunal held that the Ld. NFAC violated Rule 46A of the Income Tax Rules, 1962, by admitting additional evidence without recording satisfaction or providing the AO an opportunity for verification and comments. Consequently, the Tribunal set aside the NFAC's order and remanded the case back to the AO for a de-novo assessment, with directions to consider all evidence and the return of income to be filed by the assessee.

The Tribunal held that reassessment proceedings initiated against a deceased person by issuing a notice u/s 148 in their name are void ab-initio and constitute a jurisdictional defect. The manual alteration of the notice to substitute the appellant's name did not validate it, and the AO also lacked proper territorial jurisdiction as per CBDT instructions. Consequently, the entire assessment proceedings were quashed due to these fundamental jurisdictional defects.

The Tribunal condoned the 49-day delay in filing the appeal. It held that an addition made during reassessment that is not connected to the original reasons for reopening, and for which no fresh notice under Section 148 was issued, cannot be sustained, especially when no addition was made on the issue that triggered the reopening. The Tribunal emphasized that the words 'and also' in Section 147 are cumulative and conjunctive.

The Tribunal observed that the CIT(A) dismissed the appeal ex-parte, confirming the AO's additions due to the assessee's non-compliance. However, recognizing the principles of natural justice and potential reasons for non-appearance, the Tribunal set aside the CIT(A)'s order. The entire disputed issues were remitted back to the CIT(A) for fresh adjudication on merits, granting the assessee another opportunity of hearing.

The Tribunal acknowledged the assessee's non-compliance before the CIT(A) but, upholding the principles of natural justice, decided to grant the assessee one more opportunity. Consequently, the Tribunal set aside the CIT(A)'s ex-parte order and remanded all disputed issues back to the CIT(A) for fresh adjudication on merits after providing adequate opportunity of hearing.

The Tribunal held that the NFAC erred in dismissing the appeal ex-parte in limine for non-prosecution without adjudicating on merits. Citing sections 251(1)(a), (b), 251(2) of the Act and a Bombay High Court precedent, the Tribunal stated that an appellate authority lacks the power to dismiss an appeal for non-prosecution and must decide it on merits. Therefore, the Tribunal set aside the NFAC's ex-parte order and restored the file, directing the NFAC to decide the appeal de-novo on merits as per Section 250(6).

The Tribunal partly allowed the appeal, ruling that 1/3rd of the total cash withdrawals of ₹10,53,000/- could reasonably be linked to the SBN deposits, thereby restricting the addition to the remaining amount. It further held that the substituted provisions of Section 115BBE, prescribing a 60% tax rate, are operational from AY 2017-18 and are applicable to additions made under Sections 68 to 69D.

The Tribunal upheld the rejection of books under section 145(3) but found the AO's ad-hoc estimation of income flawed. It ruled that after rejecting books, the assessment must follow the *manner* prescribed by section 144, including a show-cause notice and consideration of all materials. Given the complex business, the AO was directed to invoke a special audit under section 142(2A) for a fresh assessment. The appeal was partly allowed and the matter remanded to the AO for de-novo assessment.

The Tribunal, relying on precedent from the Bombay High Court, held that the NFAC, as an appellate authority, does not possess the power to dismiss an appeal for non-prosecution. It emphasized that appeals must be decided on their merits, even in ex-parte adjudications. Consequently, the Tribunal set aside the NFAC's order and remitted the case back for a de-novo decision on merits under section 250(6) of the Act.

The ITAT acknowledged the CIT(A)'s ex-parte order due to non-compliance but, applying principles of natural justice, decided to grant the assessee another opportunity to present its case. The tribunal set aside the CIT(A)'s order and remitted the disputed issue back to the CIT(A) for fresh adjudication. The assessee is directed to cooperate in the proceedings.

The Tribunal condoned the delay in filing the appeal. It held that the CIT(A) erred in dismissing the appeal ex-parte without providing sufficient opportunity, thus violating principles of natural justice. Therefore, the Tribunal set aside the CIT(A)'s order and remitted the entire disputed issues back to the CIT(A) for fresh adjudication on merits, granting the assessee adequate opportunity of hearing.

The Panaji ITAT Bench held that it did not possess the territorial jurisdiction to entertain the appeals. Citing existing ITAT Standing Orders, ITAT Rules, and Supreme Court precedents, the Tribunal reaffirmed that the 'situs of the assessing officer' is the decisive factor for determining the appellate forum's jurisdiction. Consequently, the appeals were dismissed as not maintainable, with leave granted to the assessee to file them before the appropriate ITAT Bench in Bangalore, which holds jurisdiction over Mangaluru.

Following established precedents and ITAT standing orders, the Tribunal held that the 'situs of the assessing officer' is the decisive factor for determining the jurisdiction of the appellate forum. Since the Assessing Officer was in Mangaluru, outside the Panaji Bench's territorial jurisdiction, the appeals were dismissed in limine as not maintainable, with leave granted to the assessee to institute them before the appropriate Bangalore Bench.

The Tribunal observed that the CIT(A) passed the order ex-parte. Applying principles of natural justice and noting the assessee's challenge to the additions on merits, the Tribunal set aside the CIT(A)'s order and remitted the issue back to the CIT(A) for fresh adjudication, granting the assessee another opportunity to present its case.

The ITAT held that the CPC lacked jurisdiction to disallow the Section 80P deduction under Section 143(1)(a)(v) for AY 2018-19. The enabling amendment to Section 143(1)(a)(v), which expanded its scope to include general Chapter VI-A deductions for belated returns, came into effect only from 01/04/2021. Therefore, the disallowance made by the CPC on 25/06/2019 was beyond its authority and unlawful.

The tribunal condoned the delay in filing the appeal, finding that the ex-parte assessment and subsequent ex-parte dismissal by NFAC were accidental, possibly due to COVID-19 restrictions. Recognizing the lack of proper adjudication on merits, the tribunal set aside the NFAC's order. The case was remanded to the NFAC for de-novo adjudication, allowing the appellant a fresh opportunity to present their case, subject to a token cost of ₹1000/-.

The Tribunal condoned the delay in filing the appeal before the CIT(A), relying on Supreme Court principles that advocate for a liberal and pragmatic approach to condonation of delay when sufficient cause is shown. It set aside the CIT(A)'s order and remitted the entire disputed issues back to the CIT(A) for fresh adjudication on merits, conditional on the assessee paying Rs. 5,000/- as costs to the Income Tax Department.

The Tribunal observed that the CIT(A) had passed an ex-parte order despite providing opportunities for hearing. Considering the principles of natural justice and the possibility of valid reasons for non-appearance, the Tribunal decided to set aside the order of the CIT(A) and remit all disputed issues back to the CIT(A). The assessee is to be given adequate opportunity for hearing and must cooperate in submitting information for fresh adjudication on merits.

The Tribunal acknowledged the assessee's non-appearance before the CIT(A) but, considering principles of natural justice, decided to grant another opportunity. It set aside the CIT(A)'s order and remitted the disputed issues back to the Assessing Officer for fresh adjudication, ensuring adequate hearing opportunity for the assessee.

The Tribunal set aside the CIT(A)'s ex-parte order, remitting the disputed issue back to the CIT(A) for fresh adjudication. The assessee is to be provided with an adequate opportunity of hearing to substantiate its case with evidence, upholding the principles of natural justice.

The Tribunal observed that both the AO and CIT(A) proceedings were ex-parte due to the appellant's failure to furnish evidence. The CIT(A) dismissed the appeal without adjudicating on its merits, which contravenes Section 250(6) of the Act. Therefore, the Tribunal set aside the impugned order and remanded the matter for de-novo adjudication, providing the appellant another opportunity to present her case on merits.

The Tribunal held that it lacked territorial jurisdiction over the appeal because the Assessing Officer, located in Hassan, Karnataka, falls outside the Panaji ITAT Bench's designated jurisdiction. Relying on Supreme Court precedent ('PCIT Vs ABC Paper Ltd.') and ITAT Rules, the Tribunal determined that the situs of the AO is the decisive factor for appellate jurisdiction. Therefore, the appeal was dismissed as not maintainable, with liberty for the assessee to file it before the appropriate Bangalore Bench.

The Tribunal noted the assessee had an opening cash balance of Rs. 1,42,000/- as of 01.04.2016, and the A.Y. 2016-17 assessment was completed under Section 143(3). Considering the explained sources like opening cash balance, earnings from stitching classes, and past savings, the Tribunal found the cash deposits adequately supported. Consequently, the Tribunal set aside the CIT(A)'s order and directed the Assessing Officer to delete the addition under Section 69A.

The tribunal, relying on judicial precedents including a similar case (Hind Co-Operative Housing Society Ltd.), held that interest income earned by a co-operative society from deposits with other co-operative banks (like BDCC) qualifies for full deduction under Section 80P(2)(d). It clarified that Section 80P(2)(d) allows for the deduction of the whole interest/dividend income without any reduction for notional costs or expenditure.

The Tribunal held that the Ld. NFAC erred by remanding the issue of net commission when the original assessment was framed under Section 143(3), as Section 251(1)(a) does not grant explicit remand power in such cases. The NFAC's action of simply echoing the AO's findings on other additions without independent findings was also deemed contradictory to Sections 250(6) and 251. Consequently, the Tribunal set aside the NFAC's order and remitted the entire matter back to the NFAC for a de-novo decision on all issues in accordance with law.

The Tribunal found that the CIT(A)'s ex parte order was based on perceived non-compliance. Upholding principles of natural justice and acknowledging potential reasons for non-appearance, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for fresh adjudication. The assessee is to be provided another opportunity to be heard and submit evidence.

The ITAT admitted the additional evidence submitted by the assessee under Rule 29 of ITAT Rules and restored the disputed issues to the CIT(A) for fresh verification and adjudication on merits, providing the assessee an opportunity of hearing. Furthermore, given that the assessee had already paid over 20% of the total tax demand, the Assessing Officer was directed to withdraw the attachment on the assessee's bank accounts under Section 226(3) and refrain from taking any coercive action for the balance tax demand.

The Tribunal set aside the impugned order and remitted the matter back to the Ld. NFAC for a de-novo verification. This was based on the assessee's claim of having submitted a paper-book with evidence to the lower authorities, for which no acknowledgement of submission was on record.

The Tribunal noted the assessee's settlement of the dispute under the Vivad se Vishwas Scheme and the subsequent application for withdrawal, unopposed by the Revenue. Accordingly, the Tribunal dismissed the appeal as withdrawn. The dismissal was granted with leave to revive the appeal if necessary, in accordance with law.

The Income Tax Appellate Tribunal (ITAT) observed that both the assessment and first appellate proceedings were concluded ex-parte without the assessee's participation or evidence. The ITAT ruled that the NFAC failed to adjudicate the appeal on merits as required by Section 250(6) of the Income-tax Act, instead merely reiterating the AO's findings. Consequently, the ITAT set aside the NFAC's order and remanded the matter for de-novo adjudication.