ITAT Panaji Judgments — August 2025

The Tribunal found that the assessee satisfactorily discharged the burden of proving the nature and source of the initial cash deposit of ₹9,35,000/-. It was established that this amount represented sales proceeds from the grocery business, supported by provisional GST registration and sales invoices from the relevant period. Consequently, the balance addition sustained by the NFAC was vacated.

The tribunal held that Section 167B of the Income Tax Act, 1961, was not applicable to the society due to a specific exclusion for societies registered under the Societies Registration Act, 1860. However, it confirmed the application of MMR under Section 164(2) for the assessee's income, as it was derived from trust property and voluntary donations, and the society was not entitled to exemption under sections 11 or 12. The tribunal directed that while MMR applies, the surcharge should be computed according to the slab rates prescribed in the relevant Finance Act, vacating the application of the highest surcharge rates.

The Tribunal confirmed the addition of unexplained cash deposits under Section 69A due to the assessee's inability to prove the source. However, it held that as the assessee is governed by the 'Communiao Dos Bens' system (Portuguese Civil Code), the unexplained income, being income from other sources (u/s 56) and not salary, must be equally apportioned between the assessee and his spouse as per Section 5A. The AO was directed to assess 50% of the unexplained addition in the appellant's hands.

The Tribunal held that Section 167B(1) and (2) of the Income Tax Act, 1961, are not applicable to the assessee due to its status as a registered society and the indeterminate nature of its members' shares, respectively. However, it ruled that Section 164(2) applies, mandating that the society's income be taxed at the Maximum Marginal Rate (MMR) because its income is derived from property held under trust and voluntary donations, and it lacks exemptions under sections 11 or 12. For surcharge, the Tribunal directed that it must be applied according to the slab rates prescribed in the relevant Finance Act, rather than at the highest rate, citing a Special Bench decision.

The Tribunal held that the PCIT's revisional order was not sustainable for interest earned from co-operative societies/banks, as such income is deductible u/s 80P(2)(d), implying no revenue loss despite the AO's lack of inquiry. However, for interest earned from "other than co-operative societies and other than co-operative banks," the AO's failure to inquire into its nature, taxability (u/s 28 or 56), and deductibility led to an erroneous assessment prejudicial to the revenue. Thus, the PCIT's order was upheld only for this specific category of interest income.

The Tribunal held that the service of a statutory notice u/s 143(2) is mandatory for any reassessment proceedings where the assessee's return is varied. Citing High Court precedents, the Tribunal stated that failure to issue and serve this jurisdictional notice renders the reassessment void. Therefore, the reassessment order passed against the assessee for want of a valid notice u/s 143(2) was quashed.

The Tribunal found that the CIT(A) sustained the reassessment and addition without providing proper opportunity or considering the assessee's evidence. Therefore, applying principles of natural justice, the Tribunal restored the disputed issues back to the CIT(A) for fresh adjudication on merits, directing adequate opportunity of hearing for the assessee.

The Tribunal found no merit in the assessee's appeal, noting that the AO had failed to adequately examine or verify the facts regarding associate members exceeding 15% of total membership, which was crucial for the deduction claimed under Section 80P. The Tribunal upheld the Pr.CIT's order to set aside the AO's assessment. Consequently, the matter was directed back to the Assessing Officer for fresh adjudication on merits, with adequate opportunity provided to the assessee.

The Tribunal rejected the assessee's applications for condonation of delay, finding no 'sufficient cause' for the inordinate delay. It was observed that the assessee displayed negligence, lacked diligence, and provided inconsistent and concocted explanations, including a director falsely claiming to be in India. Citing Supreme Court precedents, the Tribunal concluded that such conduct and frivolous grounds do not warrant condonation of delay. Consequently, the appeals, being time-barred under Section 253(3) of the Act, were dismissed as unadmitted for adjudication.

The Tribunal found that the appellant failed to establish 'sufficient cause' for the inordinate delay. The affidavits submitted were deemed to lack bonafide imputable reasons and contained conflicting facts, demonstrating a lack of diligence and a 'lackadaisical propensity' towards the litigation. Citing Supreme Court precedents on condonation of delay, the Tribunal concluded that the explanation offered was concocted and did not warrant the benefit of condonation under Section 253(5) of the Act.

The Tribunal found no 'sufficient cause' for the inordinate delay, noting the appellant's lack of diligence, inaction, and the unbonafide nature of the reasons provided in the affidavits. Citing Supreme Court precedents on condonation of delay, the Tribunal concluded that the assessee failed to demonstrate sufficient cause to warrant condonation. Consequently, the appeals were dismissed as being barred by limitation.

The Tribunal condoned the delay in filing the appeal. Considering the principles of natural justice and the ex-parte dismissal by the CIT(A) without a proper hearing, the Tribunal set aside the CIT(A)'s order. The matter is remitted back to the CIT(A) for fresh adjudication, granting the assessee another opportunity to present their case.

The Tribunal found that the AO had applied his mind, conducted necessary inquiries, and accepted the assessee's submissions regarding the deduction under Section 80P(2)(d) for interest income from cooperative banks. Relying on judicial precedents, the Tribunal concluded that the Pr.CIT's order under Section 263 was not justified because the AO's order did not suffer from the twin conditions of being both erroneous and prejudicial to the interest of the revenue.

The Tribunal condoned the delay in filing the appeal and noted that the CIT(A) dismissed the appeal ex-parte without adequately considering the reasons for non-appearance. Applying principles of natural justice, the Tribunal set aside the CIT(A)'s order and remitted the entire disputed issues back to the CIT(A) for fresh adjudication after providing the assessee a proper opportunity of hearing, subject to a cost payment of Rs. 1000/-. The appeal was thus allowed for statistical purposes.

The Tribunal held that the NFAC, as the first appellate authority, lacks the power to dismiss an appeal solely for non-prosecution. Citing Section 251 and judicial precedents, the Tribunal ruled that the NFAC is obligated to adjudicate the appeal on its merits even in an ex-parte scenario. Consequently, the Tribunal set aside the NFAC's dismissal order and remanded the case for a de-novo decision on merits under Section 250(6).

The Tribunal held that the Pr. CIT's order under Section 263 was not justified. The AO had applied his mind, conducted necessary inquiries, and accepted the assessee's claim for deduction under Section 80P(2)(d) for interest income from deposits with cooperative banks, which are treated as cooperative societies. The Tribunal found that the AO's order did not satisfy the twin conditions of being both erroneous and prejudicial to the interest of the revenue, as the AO had considered a possible view based on facts and inquiry.

The Tribunal upheld the disallowance of the deduction under section 80P(2). Citing the Kerala High Court decision in `Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham Vs CIT`, the Tribunal ruled that a deduction under section 80P is only permissible if the return of income is filed within the due date specified under section 139(1) of the Act. The tribunal noted that the amendments to section 80AC by the Finance Act 2018 reinforced this condition.

The Tribunal, relying on judicial precedents including 'PCIT Vs ABC Paper Ltd.' and 'DCIT Vs M/s Kushal Stone Crushers & M Sand Plant', held that the 'situs of the Assessing Officer' is the decisive factor for determining the appellate forum's jurisdiction. Since the Bagalkot AO falls outside the territorial jurisdiction of the Panaji ITAT Bench, the Panaji Bench does not have jurisdiction to entertain the instant appeal. The appeal was dismissed as 'not-maintainable', with a grant of leave to re-institute it before an appropriate bench (e.g., Bangalore Benches) that has territorial jurisdiction over the Bagalkot AO.

The Tribunal noted the CIT(A)'s ex parte dismissal but recognized the principles of natural justice and potential valid reasons for the assessee's non-appearance. Granting another opportunity, the Tribunal set aside the CIT(A)'s order and remitted the matter back for fresh adjudication, ensuring the assessee is provided adequate opportunity to substantiate its case.

The Tribunal determined that the NFAC denied the assessee a reasonable opportunity to be heard, as the notices issued provided insufficient response time, resulting in an ex-parte dismissal. It also allowed a new legal ground challenging the reassessment jurisdiction under Section 148, which had not been adjudicated by the NFAC. Consequently, the Tribunal set aside the NFAC's order and remanded the entire matter for de-novo adjudication by the NFAC, directing it to provide an effective opportunity to the assessee and consider all grounds, including the newly admitted legal ground.

The Tribunal found that Ground No. 3 concerning the duty drawback addition was not adjudicated by the NFAC. Citing legal precedents, the Tribunal affirmed its limited jurisdiction to address grounds not first adjudicated by the lower appellate authority. Consequently, the Tribunal set aside the NFAC's order pertaining to this ground and remanded the matter back to the NFAC for fresh adjudication of Ground No. 3.

The ITAT held that the AO had conducted a proper inquiry during the original assessment, accepting the interest income as business income. The tribunal clarified that interest earned by a co-operative society from investments of its liquid funds in banks, being an activity integral to its primary business of providing credit facilities, constitutes 'profits & gains of business' u/s 28 and is eligible for deduction u/s 80P(2). The ITAT concluded that the original assessment was neither erroneous nor prejudicial to the revenue and thus quashed the PCIT's revisionary order u/s 263, restoring the original assessment order.

The tribunal held that the AO had applied his mind and conducted adequate inquiry during the original assessment proceedings by calling for details and examining submissions. Therefore, the AO's order was neither erroneous nor prejudicial to the interest of the revenue. Relying on established judicial precedents, the tribunal concluded that the Pr.CIT's revisionary order u/s 263 was not justified as the AO's action satisfied the 'twin conditions' for an order to be deemed valid.

The Tribunal, noting the ex-parte dismissal by CIT(A) and the assessee's challenge to the Section 234E late fee, invoked principles of natural justice. It set aside the CIT(A) order and remitted the matter back for fresh adjudication on merits, providing another opportunity for the assessee to present their case.

The Tribunal noted the CIT(A) dismissed the appeal ex-parte due to non-compliance. Applying principles of natural justice, the Tribunal decided to grant another opportunity to the assessee, setting aside the CIT(A)'s order. The matter was remitted back to the CIT(A) for fresh adjudication on merits, with instructions to provide adequate hearing opportunities.

The Tribunal condoned the delay in filing the present appeal and noted that NFAC had indeed sent notices to the wrong email address, leading to the ex-parte dismissal. Consequently, the Tribunal set aside the impugned ex-parte order and remitted the matter back to NFAC to reconsider the condonation of delay for the original appeal under section 246A and, if admitted, to decide on merits according to section 250(6).

The Tribunal ruled that the NFAC erroneously computed the delay by not accounting for the Supreme Court's limitation extension, resulting in an actual delay of 206 days instead of 757. It further held that dismissing the appeal *in limine* without providing an opportunity to explain the delay violated natural justice. Consequently, the Tribunal set aside the NFAC's order and remitted the case back for a *de-novo* decision on condonation of delay and then on merits.

The Tribunal observed that the CIT(A) dismissed the appeal ex-parte despite the assessee raising grounds challenging disallowances. Applying principles of natural justice, the Tribunal granted the assessee another opportunity to present evidence. Consequently, the CIT(A)'s order was set aside, and the disputed issues were remitted back to the CIT(A) for fresh adjudication on merits. Both appeals were allowed for statistical purposes.

The Tribunal, applying principles of natural justice, acknowledged that there could be valid reasons for non-appearance before the CIT(A). Therefore, it 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 receives an adequate opportunity of hearing. The second appeal for A.Y. 2020-21, involving identical facts, was disposed of similarly.

The Tribunal, applying the principles of condonation of delay from Supreme Court judgments (B. Madhuri Goud and MST Katiji), found reasonable cause for the delay. It condoned the delay, set aside the CIT(A)'s order, and remitted the matter back to the CIT(A) for fresh adjudication on merits after providing the assessee with an opportunity to be heard.

The Tribunal, invoking principles of natural justice, set aside the ex-parte order of the CIT(A). It remitted the matter back to the CIT(A) for fresh adjudication on merits, granting the assessee another opportunity to present their case and cooperate in submitting information for early disposal. All appeals were allowed for statistical purposes.

The Tribunal, emphasizing natural justice, found that the assessee deserved another opportunity to present its case. It set aside the CIT(A)'s ex-parte order and remitted the issues back to the CIT(A) for fresh adjudication on merits, instructing the assessee to cooperate.

The Tribunal set aside the CIT(A)'s ex-parte order, holding that the assessee should be granted another opportunity of hearing based on principles of natural justice. The disputed issues are remitted back to the CIT(A) for fresh adjudication on merits.

The Tribunal found that the CIT(A) had dismissed the appeal ex-parte. Considering the principles of natural justice, the Tribunal set aside the CIT(A)'s order and remitted all disputed issues back to the CIT(A) for fresh adjudication on merits, providing the assessee another opportunity to present their case.

Considering principles of natural justice, the Tribunal set aside the CIT(A)'s ex-parte order and remitted the issues back to the CIT(A) for fresh adjudication on merits. The assessee is to be provided adequate opportunity of hearing to substantiate its case and cooperate in submitting information for early disposal, thus allowing the appeal for statistical purposes.

The Tribunal, noting the assessee's request for withdrawal and the DR's no-objection, treated the appeal as withdrawn and accordingly dismissed it.

The Tribunal, invoking principles of natural justice, set aside the ex-parte order passed by the CIT(A). The matter concerning the penalty under Section 271D was remitted back to the CIT(A) for fresh adjudication, with directions to provide the assessee another opportunity to be heard and submit information.

The Tribunal admitted the additional evidence under Rule 29 of ITAT Rules, noting that the CIT(A) had not considered all submissions and evidences. To meet the ends of justice, the Tribunal restored the disputed issues, along with the newly admitted evidence, to the CIT(A) for fresh verification and adjudication on merits, ensuring the assessee is given an adequate opportunity of hearing.

The Tribunal, following judicial precedents including the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd., held that Section 80P(4) is a proviso applicable only to cooperative banks carrying on banking business with an RBI license. As both the assessee and GSCBL (the payer of interest) are registered co-operative societies, the interest income qualifies for deduction under Section 80P(2)(d), and Section 80P(4) does not apply to deny the deduction to the assessee. The tribunal set aside the impugned order and reversed the disallowance.

The Tribunal acknowledged the CIT(A)'s ex-parte order due to non-compliance but, considering principles of natural justice, granted the assessee another opportunity to present its case. The CIT(A)'s order was set aside, and the matter was remitted for fresh adjudication, subject to the assessee paying a cost of Rs. 1000/- and cooperating with proceedings.

The Tribunal held that the NFAC's dismissal was unjustified as it deprived the assessee of a real and effective opportunity of being heard, a violation of natural justice, and failed to pass a speaking order with clear reasons as mandated by section 250(6) of the Act. Citing precedent, the Tribunal emphasized the first appellate authority's obligation to deal with merits even if the assessee is not prosecuted. Therefore, the Tribunal set aside the NFAC's order and remanded the case back for a de-novo adjudication and a speaking order.