ITAT Patna Judgments — February 2026

The Tribunal held that the rejection of books of account and the subsequent addition by the AO and confirmed by the CIT(A) were incorrect. The Tribunal noted that the assessee had disclosed sales in its profit and loss account and that most suppliers had confirmed the transactions. The Tribunal found no specific defects in the assessee's books of account.

The Tribunal noted that the assessee is an old trust and the delay in filing was due to lack of conversancy with complex provisions. The trust deed was amended to include a dissolution clause. The Tribunal set aside the CIT(E)'s order and restored the issue for a fresh hearing.

The Tribunal noted that for AY 2016-17, the assessment was made u/s 144 of the Act. While acknowledging that disallowances can be made if facts warrant, even in the absence of incriminating evidence for unabated years, the Tribunal found no justification to interfere with the CIT(A)'s finding. The CIT(A) had already restricted the disallowance to a reasonable extent of 10%, which the Tribunal confirmed.

The CIT(A) held that the AO failed to bring on record evidence connecting the credits to the assessee's income and directed the AO to grant relief for credits directly linked to the institution where the assessee served, as these could not be taxed as unexplained. The CIT(A)'s order was allowed for statistical purposes.

The Tribunal held that the CIT(A) had recorded a clear-cut finding that the documents were seized from the auditor's office, not the assessee's premises. Furthermore, the AO did not provide an opportunity for cross-examination of Shri Sanjay Modi, upon whose statement the addition was largely based. The AO also failed to establish a nexus between the appellant and the company for the undisclosed investment.

The CIT(A) allowed the assessee's appeal, deleting the addition. The Tribunal upheld the CIT(A)'s order, noting that the documents were seized from the auditor's office, not the assessee's premises, and that the AO failed to provide cross-examination of the auditor. The Tribunal found no infirmity in the CIT(A)'s well-reasoned order.

The Tribunal upheld the CIT(A)'s decision, finding that the prior period expenses were correctly related to the current financial year. Regarding the delayed payment surcharge, it was held that it was not an accrued receipt and therefore not taxable as income, as it was contingent and not realized. Similar logic was applied to other issues concerning interest on grants and funds, where the tribunal agreed with the CIT(A) that such interest was either not income or was not to be taxed in the current year.

The Tribunal, relying on the decision in CIT vs. Oxford University Press, held that the expenditure was for repairs and renovation of an existing building and did not create a new asset or enduring benefit. The Tribunal opined that the quantum of expenditure and its enduring benefits are immaterial for determining revenue expenditure.

The CIT(A) dismissed the assessee's appeal due to a 40-day delay, finding the reason that the bank had amalgamated and ceased to exist, and notices were served on inaccessible emails, as insufficient cause. The Tribunal, however, found the reasons for the delay to be justified.

The Tribunal found that the CIT(A) had not granted a proper opportunity to the AO. Therefore, the Tribunal set aside the order of the CIT(A) and remanded the issue back to the AO.

The Tribunal held that the AO failed to provide sufficient evidence to support the addition for undisclosed business income. The CIT(A)'s deletion of this addition was upheld, as the transactions were found to be duly disclosed and supported by documentation. Similarly, the addition for bogus commission income was also deleted as it was fully disclosed, accounted for, and supported by evidence, with no contrary material produced by the AO. The Tribunal dismissed the appeals of the Revenue and the assessee.

The Tribunal noted that the Ld. CIT(A) had comprehensively examined the case and found that the AO failed to provide cogent, tangible, or corroborative material to establish that the disclosed turnover represented undisclosed sales of Raj Niwas Pan Masala. The CIT(A) also found that the commission income was fully disclosed, supported by documentation, and the AO's addition was unwarranted and based on suspicion. The Tribunal upheld the order of the Ld. CIT(A) in deleting both additions.

The Tribunal noted that the assessment was completed without allowing for any expenditures towards the property's purchase due to a lack of proper explanation from the assessee. The assessee's counsel requested one more chance to submit documents and explanations.

The Tribunal held that the reasons for reopening the assessment were clear, unambiguous, and supported by evidence, fulfilling all the requirements for valid reassessment proceedings. The CIT(A)'s decision to quash the reassessment was found to be incorrect.

The Tribunal noted that the CIT(A) did not provide the AO with an opportunity to be heard or provide a remand report regarding the additional evidence submitted by the assessee. The Tribunal found merit in the Revenue's argument that the AO should have been given a chance to examine the evidence. Therefore, the Tribunal remitted the issue back to the CIT(A) for fresh consideration.

The Tribunal noted that additional documents were filed before the CIT(A) under Rule 46A but were not entertained. The Ld. DR could not controvert the assessee's submissions. Therefore, in the interests of justice, the Tribunal remitted the issue back to the CIT(A) for fresh consideration, providing the assessee a reasonable opportunity to be heard and present documents.

The Tribunal noted that the appeal was filed with a significant delay of 1076 days. The assessee cited a previous counsel's failure to inform them about proceedings as the reason for the delay. However, the Tribunal found this reason insufficient and not a 'reasonable cause' for condonation, citing Apex Court judgments emphasizing strict adherence to limitation periods.

The Tribunal condoned the delay in filing the appeal before the CIT(A) in the interest of justice. The issues in all appeals were restored to the file of the CIT(A) for readjudication on merits after granting the assessee an opportunity of being heard.

The Tribunal acknowledged that the assessee had not produced the required details before the lower authorities. However, in the interest of justice, and considering the request for one more opportunity, the appeal was restored to the Assessing Officer for readjudication after providing the assessee with adequate opportunity to be heard. The assessee was also directed to cooperate with the AO.