ITAT Patna Judgments — February 2026

The Tribunal upheld the CIT(A)'s decision to delete the addition for undisclosed sales, agreeing that profit should be estimated on unaccounted purchases using the GP rate. The Tribunal also upheld the deletion of the expense disallowance, as estimation of income already accounted for this.

The Tribunal held that the assessment framed by the National Faceless Assessment Centre was without jurisdiction because the provisions for faceless assessment under Section 151A were notified after the assessment order was passed. Consequently, the assessment was quashed as null and void.

The Tribunal held that additions based on documents seized from a third party must be initiated under section 153C of the Act, not section 153A. Since the documents were found from a third party and handed over after the jurisdiction transfer, section 153C was mandatory for the relevant assessment years.

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 held that additions made based on documents seized from a third party must be processed under Section 153C of the Act. Since the assessment proceedings were initiated under Section 153A, the additions were considered invalid. The Tribunal also found that the valuer appointed for stock valuation was not appropriately qualified.

The Tribunal held that additions based on documents seized from a third party can only be made under Section 153C of the Income-tax Act, not under Section 153A or 143(3). The AO's jurisdiction was transferred after the documents were seized from the third party, making Section 153C applicable. The addition made on this basis was deleted.

The Tribunal held that the CIT(A) erred in admitting fresh evidence without allowing the Assessing Officer an opportunity to examine it for the food and beverage provision. For other grounds, the Tribunal found it appropriate to remand the matters back to the Assessing Officer for fresh examination.

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 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 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 Tribunal held that no transfer of property occurred within the meaning of Section 2(47)(v) of the Income Tax Act as the LDA did not involve the transfer of ownership rights or possession. The agreement was later annulled, and therefore, no capital gain arose. The Tribunal relied on various High Court and Apex Court decisions to support its conclusion.

The Tribunal held that no transfer of property had taken place within the meaning of Section 2(47)(v) of the Act, as there was no relinquishment of rights or substantial performance beyond obtaining permissions. Furthermore, a sum of Rs. 5,00,000 added by the AO for demolition was not received in the impugned financial year.

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 Tribunal upheld the CIT(A)'s decision to delete the addition on account of prior period expenses, finding they related to the current year. Similarly, delayed payment surcharges were deemed not accrued income. Interest earned on state funds and MP-LAD funds was also held to be not taxable as income, either due to being treated as per government directions or being refundable. Contractual receipts from Bajaj Electrical Ltd. were clarified as not being contractual.

The Tribunal upheld the CIT(A)'s deletions, agreeing that the so-called prior period expenses were indeed current year expenses. It also found that delayed payment surcharges and interest earned on government grants, which were refundable, were not taxable income. The tribunal also confirmed the CIT(A)'s view on the non-taxability of interest on MP-LAD funds and the reclassification of a contractual payment as interest income.

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 addition of ₹45,94,000 as unexplained income, finding that the assessee failed to discharge the onus of proof under Section 106 of the Indian Evidence Act. Similarly, the addition of ₹9,00,000 was confirmed as the assessee could not substantiate the source of the funds.

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 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 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 held that NCDC is a Public Financial Institution as it is declared as such under Section 4A of the Companies Act, 1956, and thus, the disallowance of interest payable to NCDC under Section 43B was upheld for the periods where it was not paid by the due date. However, regarding a portion of the interest payment, the matter was remanded to the Assessing Officer for verification and allowance as per the Proviso to Section 43B.

The Tribunal upheld the order of the CIT(A) who had deleted both additions. The Tribunal found that the AO's additions were based on assumptions and conjecture, lacking tangible material, and that the assessee had discharged its burden by providing sufficient documentation for its food grain business and commission income.

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 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 upheld the CIT(A)'s decision, finding that the assessee had disclosed the food grain business turnover with supporting evidence, and the AO's approach was inconsistent. Similarly, the commission income was found to be disclosed, accounted for, and supported by documentation, with no incriminating material found.

The Tribunal found that the CIT(Exemption) had rejected the application based on a misinterpretation of the time limits for filing. The Tribunal set aside the CIT's order and remanded the matter back for a fresh examination on merits.

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 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 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 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 held that the assessee failed to provide documentary evidence to support claims of joint investment and funding by family members. The tribunal also noted the assessee did not complain about coercion during the survey, making the retraction an afterthought.

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.

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 condoned the significant delay in filing the appeal. In the interest of justice, the matters were restored to the CIT(A) for fresh adjudication, ensuring the assessee is granted a proper opportunity to present their case.