ITAT Panaji Judgments — June 2025

The Tribunal, considering the facts and to meet the ends of justice, restored the disputed disallowance of salaries and commission payments back to the Assessing Officer. The AO is directed to adjudicate the matter afresh on merits, providing the assessee an adequate opportunity of hearing and cooperation in submitting information.

The Tribunal observed that critical evidence regarding the taxable income of the AOP's members was not considered by the lower authorities. Consequently, the Tribunal restored the disputed issue of surcharge levy to the file of the Assessing Officer for fresh adjudication on merits, with a directive to provide the assessee an adequate opportunity of hearing.

The Tribunal held that NFAC erred by dismissing the appeal ex-parte and confirming the penalty solely based on the quantum addition being upheld, without independently appreciating facts or providing reasoned decisions. Citing sections 251(1)(b) and 250(6), the Tribunal emphasized that penalty proceedings are distinct from assessment proceedings and appellate authorities must pass speaking orders with clear reasons. The case was remitted back to NFAC for fresh adjudication.

The Tribunal held that NFAC erred by dismissing the appeal ex-parte and confirming the penalty solely based on the quantum addition being upheld, without independently appreciating facts or providing reasoned decisions. Citing sections 251(1)(b) and 250(6), the Tribunal emphasized that penalty proceedings are distinct from assessment proceedings and appellate authorities must pass speaking orders with clear reasons. The case was remitted back to NFAC for fresh adjudication.

The Tribunal held that NFAC erred by dismissing the appeal ex-parte and confirming the penalty solely based on the quantum addition being upheld, without independently appreciating facts or providing reasoned decisions. Citing sections 251(1)(b) and 250(6), the Tribunal emphasized that penalty proceedings are distinct from assessment proceedings and appellate authorities must pass speaking orders with clear reasons. The case was remitted back to NFAC for fresh adjudication.

The Tribunal noted that the notice for clarification, issued by the CIT(E) for a hearing on 29.02.2024, was received by the assessee on 04.03.2024 (after the hearing date). Consequently, the Tribunal set aside the CIT(E)'s rejection order and directed the CIT(E) to reconsider the application de novo, providing the assessee a fresh opportunity to submit necessary information. The appeal was allowed for statistical purposes.

The Tribunal held that NFAC erred by dismissing the appeal ex-parte and confirming the penalty solely based on the quantum addition being upheld, without independently appreciating facts or providing reasoned decisions. Citing sections 251(1)(b) and 250(6), the Tribunal emphasized that penalty proceedings are distinct from assessment proceedings and appellate authorities must pass speaking orders with clear reasons. The case was remitted back to NFAC for fresh adjudication.

The Tribunal held that a change in inventory valuation method must be tax neutral and apply consistently to both opening and closing inventory. The AO's action of adding the credit to align closing inventory valuation with the opening inventory method was upheld.

The Tribunal restored the issue of bad debts to the Assessing Officer for fresh adjudication. This was done to consider the evidences and meet the ends of justice, ensuring the assessee is given an adequate opportunity to present their case.

The ITAT found that the delay in filing the appeal before the CIT(A) was accidental, attributable to the COVID-19 pandemic period exclusion and the assessee's bona fide pursuit of the rectification remedy. Relying on Supreme Court precedents, the Tribunal condoned the delay, emphasized that the CIT(A) should have adopted a justice-oriented approach, and set aside the CIT(A)'s *ex-parte* dismissal. The case was remanded to the CIT(A) for a decision on merits after providing adequate hearing opportunities to the appellant.

The Tribunal held that the reassessment proceedings initiated under section 147/148 were invalid because the notice was issued after four years from the end of the relevant assessment year, and there was no allegation that the assessee failed to disclose fully and truly all material facts. The reopening was deemed a mere change of opinion by the Assessing Officer, based on information already available on record. Consequently, the assessment order passed under section 147 was quashed, and the legal issue was decided in favour of the assessee.

The Tribunal condoned the delay in filing the appeal and, recognizing the importance of evidences, restored the issue of the addition sustained by the CIT(A) under Section 69A back to the Assessing Officer. The AO is directed to adjudicate the matter afresh, granting the assessee a proper opportunity to submit explanations and material evidence.

The Tribunal found that both the Assessing Officer and NFAC failed to consider crucial evidence submitted by the assessee and that the opportunities provided were insufficient and unreasonable, amounting to a denial of natural justice. Citing judicial precedents, the Tribunal set aside the impugned order and remanded the case to NFAC for de-novo verification of all issues after granting the assessee three effective opportunities for hearing.

The Tribunal noted that the CIT(A) passed an ex-parte order but acknowledged that the assessee had challenged the addition under Section 69A and there could be valid reasons for non-appearance. Granting another opportunity based on natural justice, 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 to be provided adequate opportunity and is expected to cooperate.

The Tribunal found that the 3-day delay in filing the appeal before the CIT(A) was supported by reasonable cause, considering the Covid-19 period for limitation purposes, and thus condoned the delay. Consequently, 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, ensuring the assessee is provided adequate opportunity.

The Tribunal held that the CIT(A) erred in partly sustaining the addition under section 69A without providing proper opportunity and overlooking material evidence. Therefore, the disputed issue was restored to the Assessing Officer for fresh verification, adjudication on merits, and to provide the assessee adequate opportunity of hearing.

The Tribunal observed that the assessee had filed submissions during reassessment which the AO might have overlooked. Applying principles of natural justice, the Tribunal set aside the CIT(A)'s order and remitted the disputed issue back to the Assessing Officer. The AO is directed to adjudicate afresh after providing the assessee adequate opportunity to substantiate its case with further evidence and information.

The Tribunal allowed the appeal concerning the addition under Section 41(1), finding it impermissible as the trading liability was not from a preceding year. The other grounds were not explicitly detailed in the provided excerpt but the final order indicates a partial allowance.

The Tribunal condoned the delay in filing the appeal. Recognizing that the CIT(A) dismissed the appeal due to the assessee's non-compliance and non-payment of taxes, the Tribunal acknowledged that there could be various valid reasons for non-appearance/non-compliance. Applying principles of natural justice, the Tribunal set aside the CIT(A)'s order and remitted all disputed issues back to the CIT(A) to provide the assessee with another opportunity to present its case.

The Tribunal noted the assessee's continuous failure to provide documentary evidence despite multiple notices at all stages of the proceedings, failing to substantiate claims of firm dissolution. The claim of forced clearance due to firm dissolution was found unsubstantiated as the firm was not formally dissolved and property disputes were ongoing. Therefore, the rejection of books and estimation of income by the tax authorities, with the partial relief granted by NFAC, was upheld.

The Tribunal ruled that since the CIT(A)'s order, which re-instated the assessee's status as a 'co-operative society' and allowed the 80P(2) deduction, was not appealed by the Revenue, this status had attained finality. Consequently, the information furnished by the assessee could no longer be considered 'inaccurate particulars', removing the basis for the penalty u/s 271(1)(c). The Tribunal therefore set aside the NFAC's order and deleted the impugned penalty in its entirety.

The Tribunal admitted additional evidence submitted by the assessee under Rule 29 of ITAT Rules. It restored the disputed issue back to the Assessing Officer for fresh adjudication on merits, instructing to provide the assessee with adequate opportunity of hearing.