ITAT Panaji Judgments — October 2026

The Tribunal noted that the assessee, a sugar manufacturer, purchases sugarcane from farmers and makes payments to harvesting and transport contractors. The assessee contended that these payments are adjusted against the purchase price payable to farmers, and the assessee acts as a facilitator. The Tribunal considered additional evidence filed by the assessee, including sample agreements and farmer/contractor ledgers, which indicated that in many cases, the company paid for transport and harvesting. However, it also noted that the assessee started making TDS from financial year 2016-2017. The Tribunal observed that the decision in EID Parry India Ltd. was pronounced later than the decision relied upon by the assessee. Given the complexities and the additional evidence not placed before the lower appellate authority, the Tribunal restored the issue to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to consider the observations, potentially call for a Remand Report, and decide on the bifurcation of charges paid directly versus on behalf of farmers, affording the assessee an opportunity of hearing.

The Tribunal held that the assessee was sleeping on his rights and was highly negligent, resulting in an inordinate delay of 2443 days. The Tribunal noted that the assessee failed to provide any evidence that the change of address was duly communicated to the Department. Citing various Supreme Court judgments, including State of Odisha v. Managing Committee of Namatara Girls High School and Thirunagalingam v. Lingeswaran & Anr., the Tribunal emphasized that condonation of delay cannot be claimed as a matter of right, is a matter of discretion, and should not be granted merely as an act of generosity, especially when the delay is caused by negligence or inaction. Procedural rules are essential for orderly administration of justice and are not mere technicalities. Therefore, the Tribunal found no infirmity with the findings of the CIT(Appeals)/NFAC and upheld the dismissal of the appeal as barred by limitation. No issue was expressly left undecided.

The Tribunal set aside the order of the Ld. CIT(Appeals)/NFAC and remanded the matter back to its file for denovo adjudication. The Tribunal reasoned that an ex-parte order was passed due to the assessee's non-compliance, and while the assessee had been provided several opportunities, principles of natural justice and the need for adjudication on merits necessitated a remand. The Tribunal relied on its previous decisions in Brajesh Singh Bhadoria and Collector Mining, Kondagaon, which emphasized that the First Appellate Authority must pass a speaking order on merits as per Sections 250(4) and (6) of the Act. The Tribunal held that if an ex-parte order is passed by the CIT(Appeals) due to non-compliance, the Tribunal should not usurp the powers of the first appellate authority by deciding legal grounds. Instead, it should remand the matter to provide a final opportunity to the assessee to represent the case on merits. The assessee was directed to comply with the hearing notices from the Ld. CIT(Appeals)/NFAC. The grounds of appeal were allowed for statistical purposes.

The Tribunal held that the CIT(Appeals)/NFAC was not justified in dismissing the appeal in limine solely on the ground of delay without adjudicating on the merits. Following the principles laid down in CIT Vs. Premkumar Arjundas Luthra (HUF) and Prabal Aadhar Seva Sansthan Vs. ITO, the Tribunal stated that the CIT(Appeals)/NFAC has no power to dismiss an appeal in limine on delay only, without referring to and discussing the contents of the assessment order and Form 35. The Tribunal found it appropriate to provide the assessee one final opportunity to represent its case before the CIT(Appeals)/NFAC regarding the condonation of delay under Section 249(3) of the Act. If the delay is condoned, the CIT(Appeals)/NFAC shall then adjudicate the issues on merits as per law, complying with principles of natural justice. The order of the CIT(Appeals)/NFAC was set aside. The grounds of appeal were allowed for statistical purposes.

The Tribunal held that the Ld. CIT(A) was not justified in quashing the penalty order on the grounds of limitation. The Tribunal reversed the finding of the Ld. CIT(A) that the penalty order under Section 271D was barred by limitation. The reasoning was based on the interpretation of Section 275(1)(c) and the relevant dates of initiation of penalty proceedings. The Tribunal found that the AO recorded satisfaction in the assessment order dated March 31, 2024, a proposal was sent to the Joint CIT/Addl. CIT on April 22, 2024, the penalty notice was issued on May 1, 2024, and the penalty was levied on November 23, 2024. These actions were considered to be within reasonable time and in accordance with the law. The Tribunal applied the ratio laid down in JCIT Vs. Ganesh Agrawal and others (Karnataka High Court). The impugned order of the Ld. CIT(A) was set aside, and the case was remitted back to the Ld. CIT(A) for adjudicating all other grounds raised in Form-35, other than the issue of limitation.

The Tribunal held that the cash withdrawals by the assessee from M/s. Balaji Construction were not in the nature of a loan, but rather the withdrawal of the assessee's own money against his substantial credit balance in the firm's books. The ledger account clearly indicated a credit balance of Rs. 61,71,991.71, from which the withdrawals were made. Therefore, the primary condition for attracting Section 269SS, which pertains to accepting loans or deposits, was not met. Furthermore, even if it were to be considered a loan transaction between a partner and a partnership firm, the Tribunal, relying on the Delhi High Court's decision in CIT vs. Muthoot Financiers, held that Section 269SS is not attracted in such cases. The Tribunal found that the AO and CIT(Appeals) failed to consider the ledger account rationally and incorrectly inferred a loan transaction. Consequently, the penalty levied under Section 271D was set aside. The appeal of the assessee was allowed.

The Tribunal held that the assessee had successfully demonstrated the submission of requisite documents. It found that the Ld. CIT(Exemption) had rejected the application for registration without considering these documents. Consequently, the Tribunal deemed it appropriate to grant the assessee an opportunity of being heard. The impugned order of the Ld. CIT(Exemption) was set aside, and the grounds of appeal raised by the assessee were allowed for statistical purposes. The Tribunal directed the Ld. CIT(Exemption) to provide a reasonable opportunity of hearing to the assessee, consider all filed documents, and pass a speaking order in accordance with the law. No comments were made on the merits of the case.

The Tribunal found merit in the assessee's alternate contention that it cannot be held as an assessee in default if the recipient doctors have already paid taxes on their income. Citing the Hon'ble Apex Court's decision in Hindustan Coca Cola Beverage (P) Ltd. Vs. CIT, which held that tax cannot be recovered again from the deductor if the payee has already included the income in its taxable income and paid taxes thereon, the Tribunal set aside the matter to the AO. The AO is directed to verify the assessee's claim that all doctors have paid their respective taxes in their returns. If verified, the order passed under Sections 201(1) and 201(1A) shall be cancelled. Otherwise, the AO should proceed in conformity with judicial precedents. The assessee is directed to cooperate with the AO. The impugned order is set aside, and the grounds of appeal are allowed for statistical purposes.

The Tribunal allowed the assessee's appeal. The primary issue was the validity of the reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961, which was based on the premise that the assessee had failed to file his return of income for AY 2015-16. The assessee produced acknowledgments demonstrating that he had filed his return of income. The Tribunal noted that a Coordinate Bench had previously decided an identical issue in the assessee's own case for AY 2014-15, quashing the reassessment proceedings because the reopening was based on the incorrect assumption that no return had been filed. Following this precedent and the Delhi High Court's decision in Deepak Wadhwa vs. ACIT, the Tribunal held that the reason for reopening was based on mistaken factual premises and was unsustainable in law. The Tribunal also observed that the assessee had successfully demonstrated sufficient sources for his investments. Consequently, the order of the CIT(A)/NFAC was set aside, and the notice issued under Section 148 and the consequential reassessment order were quashed. Other grounds of appeal were rendered infructuous.

The ITAT held that the CIT(A) erred in deleting the additions related to unaccounted sales. The tribunal found that the assessee failed to discharge the onus of proving that the apparent was not real, and the Revenue had provided sufficient evidence. Therefore, the additions were restored.

The Tribunal held that the assessee failed to provide sufficient cause for the inordinate delay in filing the appeals. The reasons provided in the affidavits were found to be concocted and lacked bonafide, indicating negligence and laxity on the part of the assessee.

The Tribunal held that the assessee failed to provide sufficient cause for the inordinate delay in filing the appeals. The reasons provided in the affidavits were found to be lacking bonafide and did not demonstrate diligence on the part of the assessee.

The Tribunal condoned the delay of 23 days in filing the appeal, relying on the judgments of the Hon'ble Apex Court in Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. and Inder Singh Vs. State of Madhya Pradesh. The Tribunal found that the delay was not deliberate or intentional and that there was a 'reasonable cause' preventing timely filing. Considering the assessee's prayer and in the interest of justice, the Tribunal decided to afford one more opportunity to the assessee. Without delving into the merits of the case, all issues raised in the appeal, including additional grounds, were restored to the file of the CIT(A) for adjudication. The assessee was directed to provide updated contact details and remain vigilant. The effective grounds of appeal were allowed for statistical purposes.

The Tribunal held that the assessee failed to provide sufficient cause for the inordinate delay in filing the appeals. The reasons provided in the affidavits were found to be concocted and lacked bonafide, indicating negligence and laxity on the part of the assessee.

The Tribunal upheld the order of the CIT(A) and dismissed the appeal of the Revenue. The Tribunal observed that the assessee, a Limited Company, had filed its regular return of income and submitted an audited balance sheet reflecting the receipt of share application money. The Assessing Officer's addition was based on information from the DDIT (Investigation) Wing regarding alleged accommodation entries provided by companies controlled by Shri Surendra Kumar Jain and Shri Virendra Kumar Jain. However, there was no specific information received about the assessee taking accommodation entries. The Tribunal noted that the assessee furnished a complete chain of documents to explain the nature and source of the funds, including share application forms, board resolutions, share receipt letters, confirmations, PAN registration numbers of applicant companies, bank statements, annual reports, and MOA/AOA. The Assessing Officer made the addition primarily relying on the Investigation Wing's report without providing the assessee with a copy of this information. The CIT(A), after examining these details, concluded that the assessee had discharged its primary onus under Section 68, and the Assessing Officer failed to bring any corroborative material on record to establish that the transactions were bogus. Therefore, the Tribunal found no error in the CIT(A)'s deletion of the addition.

The Tribunal held that the excess stock found during the survey was business income and the Assessing Officer erred in treating it as unexplained investment under Section 69 or 69B read with Section 115BBE. The Tribunal noted that the assessee maintained stock records, which were reflected in the audited balance sheet, and complete quantitative details were available. The gross turnover was not disputed, indicating no unaccounted sales. The survey team did not find a quantitative difference in stock but only used a valuation method for alleging excess stock. The Tribunal found that the source of the additional income offered was purely from business, and there being no other source of income, the CIT(A) was correct in holding the additional income as business income liable to normal tax rates. The Tribunal dismissed the Revenue's appeal. The grounds raised in the assessee's Cross Objection were dismissed as infructuous as they supported the finding of the CIT(A) which was upheld by the Tribunal. The Tribunal also noted that the decisions relied upon by the Revenue were not applicable to the facts of the case.

The Tribunal held that the interest income earned from Cooperative Banks is eligible for deduction under Section 80P(2)(d). The Tribunal noted that the issue is no longer res integra, citing numerous decisions of coordinate benches, including the Goa PWD Staff Co Op Credit Society vs. Income Tax Officer. The Tribunal emphasized that Section 80P(4) applies only when the claimant assessee is a cooperative bank, which is not the case here. The Tribunal also referred to the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd., stating that Section 80P(4) excludes only cooperative banks with an RBI license. For interest income earned from Nationalised Banks, the Tribunal held it to be eligible for deduction under Section 80P(2)(a)(i). The Tribunal reasoned that these deposits were made for liquidity norms, safety of members' funds, and operational requirements, constituting business income, and not a deposit of surplus funds. Consequently, the impugned orders of the CIT(A) were set aside, and the disallowance was reversed in entirety.

The Tribunal held that the interest income earned from Cooperative Banks is eligible for deduction under Section 80P(2)(d). The Tribunal noted that the issue is no longer res integra, citing numerous decisions of coordinate benches, including the Goa PWD Staff Co Op Credit Society vs. Income Tax Officer. The Tribunal emphasized that Section 80P(4) applies only when the claimant assessee is a cooperative bank, which is not the case here. The Tribunal also referred to the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd., stating that Section 80P(4) excludes only cooperative banks with an RBI license. For interest income earned from Nationalised Banks, the Tribunal held it to be eligible for deduction under Section 80P(2)(a)(i). The Tribunal reasoned that these deposits were made for liquidity norms, safety of members' funds, and operational requirements, constituting business income, and not a deposit of surplus funds. Consequently, the impugned orders of the CIT(A) were set aside, and the disallowance was reversed in entirety.

The Tribunal held that the interest income earned from Cooperative Banks is eligible for deduction under Section 80P(2)(d). The Tribunal noted that the issue is no longer res integra, citing numerous decisions of coordinate benches, including the Goa PWD Staff Co Op Credit Society vs. Income Tax Officer. The Tribunal emphasized that Section 80P(4) applies only when the claimant assessee is a cooperative bank, which is not the case here. The Tribunal also referred to the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd., stating that Section 80P(4) excludes only cooperative banks with an RBI license. For interest income earned from Nationalised Banks, the Tribunal held it to be eligible for deduction under Section 80P(2)(a)(i). The Tribunal reasoned that these deposits were made for liquidity norms, safety of members' funds, and operational requirements, constituting business income, and not a deposit of surplus funds. Consequently, the impugned orders of the CIT(A) were set aside, and the disallowance was reversed in entirety.

The Tribunal held that the reassessment proceedings initiated under Section 147 were bad in law. The Tribunal noted that the original assessment for AY 2012-13 was a scrutiny assessment completed on 31.03.2015. The reassessment was initiated after four years, and the AO failed to demonstrate any failure on the part of the assessee to disclose fully and truly all material facts. The Tribunal found that the Income Tax Department had completed reassessment proceedings in the cases of the share applicant companies, Debdaru Vinmay Pvt. Ltd. and DKS Tradecom Pvt. Ltd., for AY 2012-13, accepting their returned income after investigations based on information from ADIT (Inv.), Raipur. This indicated that the identity, creditworthiness, and genuineness of the transactions with these companies had been verified by the department. Therefore, it was incorrect for the AO to allege that the assessee failed to prove these aspects. The Tribunal concluded that the assessee had fulfilled its onus by filing the necessary documents, and the AO had not pointed out any defects. Consequently, the addition made by the AO under Section 68 was without merit. The Tribunal directed the AO to delete the addition. As the notice under Section 148 was held to be bad in law, other legal grounds raised by the assessee were not adjudicated.

The Tribunal allowed the appeal for statistical purposes. The Judicial Member acknowledged the assessee's submission regarding practical difficulties due to the remote area and past Naxalite issues, which hindered the timely submission of documentary evidence. Considering this, and in the interest of substantive justice, the Tribunal granted one final opportunity to the assessee to furnish all relevant documentary evidence before the First Appellate Authority. The CIT(Appeals) was directed to determine the validity of the assessee's contentions and pass a speaking order in accordance with Section 250(4) & (6) of the Act, following the principles of natural justice. The assessee was cautioned to comply with hearing notices and submit documents on merits. The Tribunal noted that the CIT(Appeals) had dismissed the appeal for want of prosecution, citing the assessee's failure to effectively pursue the appeal and provide supporting evidence, relying on cases like CIT vs. B.N. Bhattacharya and CIT v. Gold Leaf Capital Corporation Ltd.

The Tribunal held that the penalty under Section 271B is not imposable if the assessee proves a reasonable cause for the failure, as per Section 273B of the Income Tax Act, 1961. The assessee had explained the delay of three months in filing the audit report was due to suffering from viral fever. While the revenue and the lower appellate authority disregarded this explanation for lack of documentary evidence, the Tribunal noted that the revenue also failed to produce any report refuting the assessee's submissions. Considering the case laws relied upon by the assessee and the provisions of Section 273B, the Tribunal found that once a reasonable cause is explained, the penalty under Section 271B should not be imposed. Therefore, the order of the CIT(Appeals)/NFAC was set aside. The Tribunal did not expressly decide on the initial liability under Section 44AB, focusing instead on the reasonable cause for the delay in filing the audit report.

The Tribunal held that the notice issued under Section 148 of the Income Tax Act, 1961, dated 25.07.2022, for the assessment year 2013-14, is barred by limitation. The reasoning was based on the principle that once a notice for reassessment is issued beyond the prescribed period of limitation, the subsequent proceedings, including the reassessment order, become non-est (as if they never existed). The Tribunal respectfully followed its own previous decisions and those of higher authorities, including the Supreme Court in Union of India Vs. Rajeev Bansal, which established that reassessment notices issued beyond the surviving period of limitation are liable to be set aside. Therefore, the reopening of the assessment was quashed. The Tribunal noted that since the reassessment itself was quashed, all subsequent proceedings became academic. The appeal of the assessee was allowed on this ground.

The Tribunal held that the reassessment proceedings initiated under section 147 were valid. The CIT(Appeals)/NFAC correctly observed that SFT data provided specific and credible information sufficient to form a prima facie belief of escaped income, and this information is statutorily recognized. The argument that the department had prior knowledge from the case of Late Maimuna Begum was rejected as those proceedings were dropped due to demise, not on merits, and each assessment is independent. The assessee's failure to respond to statutory notices was noted as a significant non-compliance. The Tribunal also found that the CIT(Appeals)/NFAC did not comply with Rule 46A(3) of the IT Rules, 1962, by failing to provide the additional evidence furnished by the assessee to the Assessing Officer for his comments and verification. Therefore, in the interest of substantive justice, the order of the CIT(Appeals)/NFAC was set aside, and the matter was remanded back to its file for compliance with Rule 46A(3), including obtaining a remand report from the AO, and thereafter passing fresh findings in terms of Section 250(4) & (6) of the Act, while adhering to principles of natural justice. The assessee was directed to comply with hearing notices.

The Tribunal held that the Ld. CIT(Appeals) had erred by passing an order on 15.05.2026 without considering the assessee's submissions dated 22.04.2025. The Tribunal found the order to be perverse as it summarily dismissed the appeal without considering the submissions filed by the assessee even before the appellate order was passed. A quasi-judicial authority must consider submissions on record before reaching a conclusion. Not adjudicating an appeal on merits and summarily dismissing it amounts to injustice. Therefore, the Tribunal set aside the order of the Ld. CIT(Appeals) and remanded the matter back to his file for a de novo adjudication of all grounds of appeal on merits, in accordance with law, and to pass a speaking order as per Sections 250(4) & (6) of the Act. The appeal was allowed for statistical purposes.

The Tribunal held that the assessment order was not in accordance with the mandatory procedure laid down under Section 144B of the Act. It was noted that the AO had not issued any show cause notice to the assessee before making the addition of Rs. 52,96,834/- towards the disallowance of the cost of acquisition/construction. This failure to issue a show cause notice for variations prejudicial to the assessee's interest violated the principles of natural justice and the binding dictates of Section 144B. The Tribunal relied on the provisions of Section 144B, which mandates that a show cause notice must be issued when variations prejudicial to the assessee are proposed. The Tribunal also referred to judicial pronouncements, including the Bombay High Court's decision in Piramal Enterprises Ltd. Vs. Addl/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, which held that assessments not made in accordance with Section 144B are non-est. Consequently, the assessment order was declared non-est, rendering subsequent proceedings invalid. The appeal of the assessee was allowed.

The Tribunal held that the reassessment proceedings initiated under Section 148 were bad in law because the notice was issued after a lapse of 4 years from the end of the assessment year, and the AO had not alleged any failure on the part of the assessee to disclose fully and truly all material facts. Consequently, the proviso to Section 147 of the Income Tax Act, 1961, was not complied with. Following the precedent set by the Hon'ble Jurisdictional High Court and other ITAT judgments, the Tribunal concluded that the notice under Section 148 was bad in law, rendering the consequential assessment order void-ab-initio. Accordingly, the additional ground raised by the assessee concerning the validity of the reassessment proceedings was allowed. As a result of this decision, all other grounds raised by the assessee were dismissed as un-adjudicated. For the Revenue's appeal, the Tribunal noted that since it had already held the notice under Section 148 to be bad in law, the grounds raised by the Revenue became infructuous. Therefore, the Revenue's appeal was dismissed without adjudicating on the merits of the addition. The ratio decidendi is that reassessment proceedings initiated beyond four years from the end of the relevant assessment year are void ab initio if the AO fails to record satisfaction regarding the assessee's failure to disclose material facts, as mandated by the first proviso to Section 147.

The Tribunal held that the reassessment proceedings initiated under Section 148 were bad in law because the notice was issued after a lapse of 4 years from the end of the assessment year, and the AO had not alleged any failure on the part of the assessee to disclose fully and truly all material facts. Consequently, the proviso to Section 147 of the Income Tax Act, 1961, was not complied with. Following the precedent set by the Hon'ble Jurisdictional High Court and other ITAT judgments, the Tribunal concluded that the notice under Section 148 was bad in law, rendering the consequential assessment order void-ab-initio. Accordingly, the additional ground raised by the assessee concerning the validity of the reassessment proceedings was allowed. As a result of this decision, all other grounds raised by the assessee were dismissed as un-adjudicated. For the Revenue's appeal, the Tribunal noted that since it had already held the notice under Section 148 to be bad in law, the grounds raised by the Revenue became infructuous. Therefore, the Revenue's appeal was dismissed without adjudicating on the merits of the addition. The ratio decidendi is that reassessment proceedings initiated beyond four years from the end of the relevant assessment year are void ab initio if the AO fails to record satisfaction regarding the assessee's failure to disclose material facts, as mandated by the first proviso to Section 147.