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 upheld the action of the Assessing Officer (AO) in rejecting the assessee's valuation of closing inventory, concluding that the change in method was not tax-neutral. It approved the consequential addition made by increasing the value of closing inventory with taxes and duties to align it with the method of valuation adopted for opening inventories, citing various judicial precedents.

The ITAT held that penalty proceedings are distinct from assessment proceedings and the NFAC erred by not passing a speaking order with independent reasoning and appreciating the facts, as mandated by Section 250(6) read with Section 251(1)(b) of the Income Tax Act. Citing judicial precedents, the ITAT found the NFAC's order irregular and set it aside, remitting the matter for fresh adjudication in accordance with law.

The Tribunal held that penalty proceedings are distinct from assessment proceedings, and the NFAC/CIT(A) is mandated to pass a speaking order with clear reasons, even in ex-parte dismissals, in compliance with sections 251(1)(b) and 250(6). Confirming a penalty solely based on quantum appeal adjudication without independent application of mind renders the order irregular. The impugned order was set aside and remanded to the NFAC for fresh adjudication with a speaking order.

The Tribunal set aside the NFAC's order, finding that penalty proceedings are distinct and independent of assessment proceedings. The NFAC erred by not passing a speaking order with clear reasons, which is mandated by Section 250(6) and 251(1)(b) of the Act. The case was remitted back to the NFAC for fresh adjudication and to pass a speaking order in accordance with law.

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 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 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 held that the denial of personal hearing by the CIT(A), despite specific requests, violated the principles of natural justice. Consequently, the impugned orders were set aside, and the cases were remanded to the CIT(A) for de-novo adjudication, with a direction to provide an effective personal hearing, even through virtual mode.

The Tribunal held that the Ld. CIT(A)'s failure to grant a personal hearing, despite a specific written request, constituted a violation of the principles of natural justice. Citing several judicial precedents, the Tribunal emphasized that an adverse order cannot be sustained if passed without affording the taxpayer an opportunity of personal hearing. Consequently, the impugned orders were set aside, and the matters were remanded to the Ld. CIT(A) for de-novo adjudication, with a direction to provide an effective personal hearing, preferably through virtual mode.

The Tribunal held that the denial of a personal hearing, despite a specific request, constitutes a violation of the principle of natural justice. Citing several High Court precedents, the Tribunal set aside the impugned orders and remanded the cases to the CIT(A) for de-novo adjudication, with a direction to provide an effective personal hearing, preferably through virtual mode.

The Tribunal held that the CIT(A)'s inaction in dealing with the specific request for personal hearing constituted a violation of the principle of natural justice. Citing judicial precedents, it ruled that an adverse order could not be passed without granting an opportunity for personal hearing when specifically requested. Therefore, the impugned orders were set aside and remanded to the CIT(A) for de-novo adjudication after providing an effective personal hearing.

The Income Tax Appellate Tribunal (ITAT) held that the CIT(A)'s denial of the assessee's specific request for a personal hearing was a violation of the principle of natural justice. Citing various judicial precedents, the ITAT set aside the impugned orders and remanded the cases back to the CIT(A) for *de-novo* adjudication after providing an effective personal hearing, potentially through virtual mode.

The Tribunal held that the CIT(A)'s failure to grant or adequately address the specific request for personal hearing by the assessees constituted a clear violation of the principle of natural justice. Citing several judicial precedents, the Tribunal concluded that the impugned orders passed without providing a personal hearing cannot be sustained in law. Therefore, the Tribunal set aside the CIT(A)'s orders and remanded the matters back for de-novo adjudication, with a specific direction to accord an effective personal hearing (via virtual mode) to the assessees.

The tribunal held that the CIT(A)'s failure to grant a personal hearing or explicitly address the specific request for it, despite written submissions, constituted a violation of the principle of natural justice. Citing several judicial precedents, the tribunal concluded that an order passed without such an opportunity, especially when requested, cannot be legally sustained and therefore set aside the impugned orders.

The tribunal held that the denial of a personal hearing, especially when specifically requested, constitutes a violation of the principles of natural justice. Citing various judicial precedents, the tribunal concluded that the CIT(A) erred by not dealing with the assessee's request. Therefore, the impugned orders were set aside, and the matters were remanded to the CIT(A) for de-novo adjudication, with a direction to accord an effective personal hearing through virtual mode.

The Tribunal held that the CIT(A)'s inaction in addressing the specific request for a personal hearing constituted a violation of the principle of natural justice. Citing several judicial precedents, the Tribunal emphasized that a personal hearing is crucial, especially when income variations are involved or adverse orders are passed. Consequently, the impugned order was set aside, and the case was remanded to the CIT(A) with a direction to provide an effective personal hearing (via virtual mode) and adjudicate the matter de-novo based on the available records.

The Tribunal held that the denial of a personal hearing by the CIT(A), notwithstanding a specific request, constitutes a clear violation of the principles of natural justice. Citing several judicial precedents, the Tribunal ruled that an adverse order cannot be passed without granting an opportunity for personal hearing. Consequently, the impugned order was set aside and the case was remanded to the CIT(A) for de-novo adjudication after providing an effective personal hearing.

The Tribunal held that the Ld. CIT(A)'s failure to grant or address the appellants' specific request for a personal hearing constituted a clear violation of the principles of natural justice. Citing several judicial precedents, the Tribunal emphasized that a personal hearing is crucial, especially when requested, and that adverse orders cannot be passed without such an opportunity. Consequently, the impugned orders were set aside and the matters remanded.

The Tribunal held that the CIT(A)'s failure to address or grant the specific request for a personal hearing constituted a clear violation of the principle of natural justice. Relying on various judicial precedents, the Tribunal emphasized the critical importance of a personal hearing, especially when adverse inferences are drawn or income is varied based on submitted evidence. Consequently, the impugned orders were set aside, and the cases were remanded back to the CIT(A) with directions to conduct a fresh adjudication after providing an effective personal hearing, preferably through virtual mode.

The tribunal held that the CIT(A)'s inaction in addressing the assessee's specific request for a personal hearing constituted a violation of the principles of natural justice. Citing various judicial precedents, the tribunal set aside the impugned orders and remanded the cases to the CIT(A) with a direction to provide an effective personal hearing through virtual mode and to re-adjudicate the matters de-novo based on the evidence on record.

The Tribunal ruled that the CIT(A)'s inaction on the specific request for a personal hearing violated the principles of natural justice. Consequently, the impugned orders were set aside, and the cases were remanded back to the CIT(A) for de-novo adjudication, with a clear direction to provide an effective personal hearing to the assessees.

The Tribunal held that the denial of a personal hearing by the CIT(A), despite a specific written request, constituted a violation of the principle of natural justice. Relying on judicial precedents, the Tribunal set aside the impugned orders of the CIT(A) and remanded the cases back for de-novo adjudication, with a direction to grant an effective personal hearing, even if through virtual mode.

The tribunal held that the denial of a specific request for a personal hearing by the Ld. CIT(A), especially when adverse inferences were drawn or income was varied, constitutes a violation of the principle of natural justice. Citing various High Court precedents, the tribunal set aside the impugned orders and remanded the matters back to the Ld. CIT(A) with a direction to provide an effective personal hearing (via virtual mode) and adjudicate de-novo based on the records.

The Tribunal held that the CIT(A)'s inaction in addressing the assessee's specific request for a personal hearing constituted a violation of natural justice. Citing various judicial precedents, the Tribunal set aside the impugned orders and remanded the cases back to the CIT(A) for de-novo adjudication, with a direction to provide an effective personal hearing, including through virtual mode.

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 Income Tax Appellate Tribunal held that the CIT(A)'s failure to grant or address the specific request for personal hearing, despite written submissions, constituted a violation of the principle of natural justice. Citing various High Court precedents, the Tribunal emphasized that a personal hearing is mandatory when income is varied based on assessee's evidence or when adverse inferences are drawn. Consequently, the impugned orders were set aside and the cases remanded back to the CIT(A) for de-novo adjudication, with a clear direction to provide an 'effective personal hearing through virtual mode' and consider all materials and evidences.

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 held that the CIT(A)'s failure to grant or even address the assessee's specific request for a personal hearing constituted a clear violation of the principle of natural justice. Citing various judicial precedents, the Tribunal set aside the impugned orders and remanded the cases back to the CIT(A) for de-novo adjudication, with a specific direction to provide an effective personal hearing through virtual mode.

The Tribunal held that the denial of a personal hearing by the CIT(A), despite a specific request, constituted a violation of the principles of natural justice. Citing various High Court precedents, the Tribunal set aside the impugned orders and remanded the cases back to the CIT(A) with a direction to provide an effective personal hearing (via virtual mode) and adjudicate the matters de-novo based on the available records.

The Tribunal held that the CIT(A)'s failure to grant a personal hearing, despite a specific written request from the assessee, constituted a violation of the principles of natural justice. Citing several judicial precedents, the Tribunal emphasized that a personal hearing is essential, especially when varying returned income or passing an adverse order. Consequently, the impugned orders of the CIT(A) were set aside and the matters were remanded for de-novo adjudication with a direction to provide an effective personal hearing through virtual mode.

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 partly allowed the appeal. For the Section 14A disallowance, it directed re-computation based on investments that yielded exempt income, setting aside the earlier computation. The addition related to closing stock discrepancies was upheld due to the assessee's failure to provide statutory records. However, the addition under Section 41(1) was vacated, as the liability originated in the current year and did not satisfy the conditions requiring prior allowance/deduction.

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 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 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.

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.