ITAT Raipur Judgments — July 2025

The Tribunal observed that the CIT(E) misappreciated facts by evaluating activities against incorrect financial year data and failed to provide a reasonable opportunity to the assessee to explain the discrepancies. The order of the CIT(E) was set aside, directing a de novo decision after affording the assessee a proper hearing.

The Tribunal held that the reassessment notices issued under Section 148 for both assessment years were time-barred. For AY 2013-14, the notice was beyond four years, and the Revenue failed to prove the assessee's non-disclosure. For AY 2015-16, the notice was issued beyond the "surviving period" as defined by the Supreme Court in *Union of India v. Rajeev Bansal*, rendering the proceedings invalid and quashed.

The Tribunal emphasized that the principles of natural justice, specifically 'audi alteram partem' (right to be heard), are fundamental to judicial and quasi-judicial proceedings. It found that the CIT(A)/NFAC's enhancement of assessment without granting an opportunity of hearing was a clear violation. Therefore, the Tribunal set aside the orders of the CIT(A)/NFAC and remanded the matters for de novo adjudication in accordance with the principles of natural justice.

The tribunal emphasized the fundamental importance of natural justice, especially the principle of 'audi alteram partem' (right to be heard), citing Supreme Court precedents. It found that the CIT(A) failed to grant the assessee an opportunity of hearing before enhancing the assessment. Consequently, the tribunal set aside the CIT(A)'s orders and remanded the matters for fresh adjudication in compliance with natural justice principles.

The ITAT, noting the CIT(A)'s ex-parte order without adjudicating on merits, held that this violated principles of natural justice, citing relevant precedents. Consequently, the tribunal set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for fresh adjudication on merits, granting the assessee a final opportunity to present its case within three months.

The Tribunal found that the CIT(E) erred by analyzing FY 2023-24 financials for activities stated to have started in FY 2024-25 and violated principles of natural justice by not issuing a show-cause notice. Consequently, the Tribunal set aside the CIT(E)'s order and remanded the matter for a fresh decision, directing the CIT(E) to provide the assessee with a reasonable opportunity to be heard.

The Tribunal dismissed Ground 4 (delayed PF/ESI) as not pressed and Ground 6 (general ground) as not calling for adjudication. Ground 1 (CSR expenses), Ground 2 (donation & charity), and Ground 3 (Section 14A disallowance) were allowed, directing the A.O. to delete the respective additions, citing the non-applicability of the Finance Act 2014 embargo for AY 2012-13 on donations/CSR and sufficient interest-free funds for Section 14A. Ground 5 (additional depreciation) was remanded to the A.O. for re-verification regarding eligibility for new plant and machinery.

The Tribunal held that both reassessment notices were time-barred. For AY 2013-14, the notice was issued beyond the four-year limitation, and the revenue failed to prove the assessee's non-disclosure of material facts. For AY 2015-16, following the Supreme Court's Rajeev Bansal judgment, the notice was issued beyond the legally permissible 'surviving period.' Consequently, both reassessment proceedings were declared invalid and void ab initio.

The Tribunal condoned the 873-day delay, finding it bona fide and unintentional, citing a liberal approach as per Supreme Court judgments. It held that the CIT(A) is statutorily obligated to decide appeals on merits and cannot summarily dismiss them for non-prosecution. Consequently, the Tribunal set aside the CIT(A)'s ex-parte order and remanded the matter back for fresh adjudication on merits, providing one final opportunity to the assessee.

The Tribunal upheld the CIT(A)'s decision, confirming that the loose papers were undated, unsigned, and merely reflected publicly available excise department data, lacking any direct nexus to the assessee's unaccounted transactions. It further ruled that the director's retracted statement, made under pressure and without corroboration, had no evidentiary value. The Tribunal concluded that the AO's additions, based on presumption, guesswork, and suspicion without cogent facts or independent incriminating evidence, were not sustainable in law.

The CIT(A)/NFAC set aside the reassessment order, holding that the notice issued under Section 148 on 26.07.2022 was beyond the permissible limitation period. The tribunal upheld the CIT(A)'s decision, confirming that the notice was time-barred as per the provisions of the Income Tax Act, as amended by the Finance Act, 2021, and the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), read with Supreme Court judgments in Union of India vs. Ashish Agrawal and Rajeev Bansal. Consequently, the entire reassessment proceedings were deemed void ab initio.

The Tribunal held that the A.O. erred by treating Rs. 5,44,000/- as unexplained money, asserting that any addition should have been limited to Rs. 3,50,000/- which was indisputably deposited during demonetization. Citing judicial precedents regarding non-application of mind and incorrect charging sections, the Tribunal directed the A.O. to delete the addition made under Section 69A, deeming it uncalled for, arbitrary, and bad in law.

The Tribunal condoned the 69-day delay, adopting a liberal approach due to the director's illness and Supreme Court precedents. On merits, the Tribunal set aside the Section 69A addition of Rs. 50 lacs, finding the assessee's explanation credible as the original source (share application money) and business activities were undisputed by the revenue. It held that a mere time gap or deposit during demonetization does not automatically render the money unexplained if its source is established, citing previous ITAT decisions.

The Tribunal found that the financial evidence presented by the assessee, including ledger accounts and sales registers, demonstrated that the alleged cash receipts either did not constitute sale proceeds or were from multiple transactions, none individually exceeding the Rs. 2,00,000/- threshold under Section 269ST. Consequently, the Tribunal concluded that the provisions of Section 269ST were not attracted, rendering the PCIT's revisional proceedings under Section 263 to initiate penalty under Section 271DA as devoid of merit. The order of the PCIT was quashed.

The Tribunal dismissed the revenue's appeal, upholding the CIT(A)'s decision. It affirmed that disallowance under Section 43B is not attracted when the assessee does not claim the amount as an expenditure in the profit and loss account, following the binding judgments of the jurisdictional High Court in the cases of *Ganpati Motors* and *Grand Motors*. The assessee's cross-objection was dismissed as infructuous.

The tribunal, relying on various High Court judgments, held that reassessment initiated on borrowed satisfaction without the Assessing Officer's independent application of mind is bad in law and void ab initio. It found that the 'reasons to believe' recorded by the AO lacked any independent satisfaction regarding the escapement of income. Consequently, the reassessment proceedings were quashed.

The Tribunal observed that since the matter had already been disposed of by a previous CIT(A) order and its effect given by the AO before the faceless regime, the subsequent impugned order passed by the Ld. CIT(Appeals)/NFAC was rendered non-est (void) as per law.

The tribunal noted that the CIT(A)'s dismissal was ex-parte due to the assessee's non-compliance. Citing principles of natural justice and various Supreme Court and High Court judgments, the ITAT decided to grant the assessee one final opportunity to present their case on merits. The matter was therefore remanded back to the CIT(A) for de novo adjudication within three months, with directions for the assessee to cooperate proactively.

The tribunal held that the reassessment proceedings were invalid, bad in law, and void ab initio. This was because the reopening was done beyond the period of four years without the department proving any failure on the assessee's part to disclose material facts, which is a mandatory condition under the first proviso to Section 147 of the Income Tax Act. The tribunal relied on various High Court and Supreme Court precedents, emphasizing that such statutory conditions must be strictly fulfilled.

The tribunal held that the issuance and valid service of notice under Section 143(2) of the Income Tax Act is a jurisdictional prerequisite (sine-qua-non) for framing a reassessment order under Sections 147/144B. Since the department could not prove the service of the said notice, the reassessment proceedings were deemed invalid and void ab initio. Consequently, the tribunal quashed the reassessment order.

The tribunal dismissed Ground No.1 as not pressed. For Ground No.2, the addition of Rs. 1,98,000 was deleted, as the assessee explained the source of funds (from husband via RTGS) and the AO failed to conduct proper inquiry. For Ground No.3, the addition of Rs. 13,15,000 was deleted, accepting the assessee's explanation of funds from her husband and past savings, as the department could not disprove the evidence. Consequently, the application of section 115BBE was also deleted, with the tribunal reiterating that additions cannot be based on mere suspicion without evidence.

The Tribunal held that the reassessment proceedings initiated beyond four years were invalid as the department failed to prove any lack of full and true disclosure by the assessee as required by the first proviso to Section 147. Relying on judicial pronouncements, the Tribunal quashed the re-opening as void ab initio, rendering the grounds on merits academic.

The Tribunal held that the application of Section 68 instead of Section 69A for unexplained cash deposits constitutes a fundamental error that vitiates both the assessment order and the CIT(A)'s order. Citing previous judicial pronouncements, it ruled that such an addition made under the wrong charging section is unsustainable and void ab initio. Consequently, the AO was directed to delete the entire addition.

The Tribunal found that the CIT(A)'s ex-parte orders violated the principles of natural justice by not providing a proper opportunity of being heard. Citing Supreme Court and High Court judgments, the Tribunal set aside the CIT(A) orders and remanded all appeals back to the CIT(A) for fresh adjudication on merits, directing the CIT(A) to provide the assessee one final opportunity to present its case.

The Tribunal observed a possible incorrect interpretation of the ITR by the revenue authorities due to conflicting selections within the form. It held that the CIT(A) bears the onus to correctly interpret the return of income and verify the facts with adequate machinery. The Tribunal set aside the CIT(A)'s order and remanded the matter back for de novo adjudication to determine the applicability of the concessional tax rate, ensuring the rights of the bonafide assessee are not hampered.

The Tribunal found that the Ld. CIT(A) orders were ex-parte, lacked adjudication on merits, and failed to adhere to the principles of natural justice and provisions of section 250(4) & (6) of the Income Tax Act, 1961. Citing various judicial precedents, the Tribunal set aside the impugned orders and remanded all matters back to the Ld. CIT(A) for fresh de novo adjudication on merits, providing the assessee a final opportunity to present their case.

The Tribunal noted a discrepancy in the ITR, where one column indicated "none of above" for opting into Section 115BA/115BAA/115BAB, while a subsequent column indicated "Yes" for choosing this option for the current year. The Tribunal held that the First Appellate Authority failed to correctly interpret the ITR and verify the factual position. Consequently, the matter was remanded to the Ld. CIT(Appeals)/NFAC for de novo adjudication to ascertain the applicability of the concessional tax rate after proper verification.

The Tribunal, emphasizing principles of natural justice and prior rulings, determined that the assessee should be afforded a final opportunity to be heard on merits. Consequently, the case was remanded back to the CIT(A) for fresh adjudication within three months.

The Tribunal, relying on judicial precedents, held that the Pr. CIT's order passed under Section 263 was arbitrary, bad in law, and void ab initio due to this demonstrated non-application of mind regarding the applicable penalty provisions. Consequently, the Pr. CIT's order was quashed.

The Tribunal held that the CPC exceeded its jurisdiction by making an adjustment requiring legal interpretation and factual clarification under Section 143(1), which is meant for prima facie adjustments. It clarified that for policies issued before 01.04.2012, such as the assessee's, the maturity proceeds are fully exempt under Section 10(10D) irrespective of the premium to sum assured ratio. Citing judicial precedents, the Tribunal found the addition perverse, arbitrary, and bad in law, and directed its deletion.

The Tribunal condoned the delay of 30 days in filing the appeals, adopting a justice-oriented and liberal approach. It set aside the ex-parte orders of the Ld. CIT(Appeals) for all assessment years, remanding the matters back for de novo adjudication on merits. The CIT(Appeals) is directed to provide a final opportunity to the assessee and pass an order within three months under Section 250(4) and (6) of the Income Tax Act, ensuring compliance with principles of natural justice.

The Tribunal held that the reassessment proceedings initiated beyond the six-year statutory period were invalid as the department failed to demonstrate any failure on the assessee's part to disclose material facts. The AO's justification, based solely on the amount of escaped income for reopening beyond six years, was not legally tenable for AY 2012-13, especially when no such failure to disclose facts was recorded. Citing Supreme Court precedents, the Tribunal reiterated that actions taken without jurisdiction or inconsistent with statutory prescriptions are null and void, thus quashing the reassessment proceedings.

The Ld. Sr. DR conceded that the appeal lacked legal validity. The Tribunal, after hearing both parties, dismissed the appeal as infructuous, stating that it had no legal standing.

The Tribunal condoned the delay, finding no malafide intent. Citing a Bombay High Court judgment, it ruled that the CIT(A) is statutorily bound to dispose of appeals on merits and cannot summarily dismiss them for non-prosecution. The case was remanded to the CIT(A)/NFAC for de novo adjudication on merits, with the assessee granted one final opportunity to represent their case.

The Tribunal held that the assessment framed by an Assessing Officer different from the one who issued the initial notice, in the absence of a mandatory transfer order under Section 127, and without a valid notice from the assessing officer who framed the assessment, is without jurisdiction, invalid, and bad in law. Consequently, the assessment was quashed.

The Tribunal determined that the notice issued u/s 148A(b) on 20.03.2022, requiring compliance by 26.03.2022, provided less than the mandatory seven clear days, excluding the dates of issuance and compliance. Citing various High Court judgments on the requirement of minimum clear days, the Tribunal held the notice to be invalid and void ab initio, consequently quashing all subsequent proceedings as non-est in the eyes of law.

The Tribunal condoned the 428-day delay, adopting a justice-oriented and liberal approach given the technical issue and absence of malafide intent. It held that the ex-parte dismissal by the CIT(Appeals) without providing a proper hearing violated principles of natural justice. Therefore, the matter was set aside and remanded back to the CIT(Appeals)/NFAC for de novo adjudication on merits, granting one final opportunity to the assessee to present their case.

The Tribunal held that the assessment framed by ITO-2(2) was without inherent valid jurisdiction, bad in law, and therefore quashed, owing to the absence of a mandatory transfer order under Section 127 and proper issuance of notice by the assessing officer who framed the assessment. Relying on Supreme Court pronouncements, the Tribunal affirmed the assessee's right to challenge jurisdiction even if raised for the first time before the appellate authority. All subsequent proceedings are rendered non-est.

The Tribunal condoned the 30-day delay, finding no malafide intention and adopting a liberal approach for condonation. It then set aside the ex-parte orders of the CIT(Appeals) and remanded all matters back for de novo adjudication on merits, providing the assessee one final opportunity to represent its case. The CIT(Appeals) was directed to pass orders under Section 250(4) and (6) within three months, ensuring principles of natural justice.

The Tribunal condoned the 30-day delay in filing the appeals, adopting a liberal approach in line with Supreme Court judgments. It set aside the ex-parte orders of the Ld. CIT(Appeals) and remanded all matters back for de-novo adjudication on merits, providing the assessee one final opportunity to present their case. The CIT(A) is directed to pass orders within three months.

The Tribunal condoned the 30-day delay, adopting a liberal approach in line with Supreme Court precedents. It set aside the ex-parte orders of the Ld. CIT(Appeals), remanding all matters back for de novo adjudication on merits, emphasizing the importance of natural justice and providing the assessee one final opportunity to present its case. The Ld. CIT(Appeals) is directed to pass orders within three months.

Following judicial precedents emphasizing natural justice, the ITAT set aside the ex-parte order of the Ld. CIT(Appeals). The matter was remanded back to the file of the CIT(Appeals) for de-novo adjudication on merits, providing the assessee one final opportunity to present its case, with a directive to comply with future hearing notices.

The Tribunal, relying on the Delhi High Court's decision in Sumanjeet Agarwal and ITAT Raipur's decision in Mamta Agrawal, held that mere uploading of a notice to the e-filing portal without a real-time alert, as mandated by Section 144B(6)(ii)(a), does not constitute valid service. As the department could not prove valid service of the notice u/s 142(1) or the revisionary notice u/s 263, the assessment order and the revisionary order were deemed arbitrary, bad in law, and void ab initio.

The Tribunal held that the cash deposits should have been considered under Section 69A (unexplained money) as there was no evidence of investment, and the AO's invocation of Section 69 (unexplained investment) constituted a non-application of mind, making the addition void ab initio. Citing similar precedents, the Tribunal directed the AO to delete the entire addition of Rs. 29.76 Lakhs from the assessee's hands.

The Tribunal, relying on precedent, ruled that the assessment framed by ITO-2(1) Raipur was without valid jurisdiction due to the absence of a transfer order under Section 127. It affirmed that such a jurisdictional defect cannot be waived and that an assessment framed without proper jurisdiction is null and void. Consequently, the assessment order was quashed.