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3,693 tribunal orders from the Rajkot bench.
Counted from the judgments of this bench on BharatTax. The figure is how many of them cite each decision.
For revision under Section 263, the Assessing Officer's order must be both erroneous and prejudicial to the interests of the revenue; if either condition is not met, the revisionary jurisdiction cannot be invoked. An order is not erroneous merely because the Assessing Officer did not record the details of enquiries conducted, provided due enquiries were made.
The Commissioner cannot revise an assessment under Section 263 merely because the assessment order does not explicitly reflect an inquiry, or because the Commissioner holds a different opinion. An inquiry, even if considered inadequate, or an assessment based on a plausible view by the Assessing Officer after due examination, does not automatically make the order erroneous or prejudicial to the interests of the revenue.
When dealing with unaccounted transactions of purchase and sale, including those from an illegal business, only the profit or income earned from such sales can be assessed as undisclosed income and subjected to tax, not the entire sale proceeds.
Delay in filing appeals, when supported by sufficient or justifiable cause, should be condoned with a liberal approach to ensure substantial justice. This principle prioritizes the cause of justice over mere technicalities.
Appellate authorities can consider new claims and additional grounds if the relevant facts are already on record. The purpose of assessment is to correctly determine tax liability, allowing both parties to raise issues.
When books of account are rejected and unaccounted sales or receipts are discovered, the income addition is restricted to the net profit element embedded in these undisclosed transactions, not the entire sale proceeds or receipts, especially if corresponding purchases are not proven to be outside the books.
Income tax is levied on the real profit of a trade or business, not on gross receipts. Even for unaccounted transactions, only the profit component, after deducting legitimate expenses and cost of goods sold, can be brought to tax as undisclosed income.
When unaccounted receipts or suppressed sales are detected and books of account are rejected under Section 145(3), additions to income must be restricted to the profit element embedded in such transactions, not the entire transaction value. This profit element is to be estimated by considering the assessee's regular profit ratio as per books of account.
When unaccounted cash or on-money receipts are detected, only the profit element embedded in such receipts is taxable, not the entire gross amount, and this profit requires estimation.
Additions on account of on-money receipts cannot be justified solely based on loose papers or 'sauda-chithis' without evidence of actual payment or a clear indication of a completed transaction within those documents.
The Commissioner cannot revise an assessment order under Section 263 merely because they hold a different opinion or believe a deeper inquiry was warranted if the Assessing Officer has applied their mind and conducted some inquiry. Revision under Section 263 is permissible only in cases of a complete lack of inquiry or non-application of mind by the Assessing Officer, not for merely inadequate inquiry.
Income-tax is levied on the total income of an assessee, not on gross receipts. The tax is on income, and deductions for expenditure are permissible.
When a partner admits to undisclosed income during a survey, and that income is linked to future sale deed registrations, it can be considered as income received for the purpose of assessment under Section 145 of the Income-tax Act, 1961, even if it is subject to conditions.
An assessee is entitled to be confronted with evidence used against them and to an opportunity for cross-examination, especially when that evidence is from a third party or a retracted statement. Failure to provide such an opportunity violates the principles of natural justice.
An assessee must be given an opportunity to cross-examine third parties whose statements are relied upon for adverse findings. Failure to provide this opportunity is a serious flaw rendering the order a nullity.
Loose sheets of paper, excel sheets, or diaries, often referred to as 'dumb documents,' are wholly irrelevant as evidence and not admissible under Section 34 of the Evidence Act if they lack evidentiary value. Additions to income cannot be made solely based on such documents without corroborating, reliable, and admissible evidence supported by other circumstances.
A revisional order under Section 263 is not sustainable if the Assessing Officer has already made detailed enquiries regarding the issue (such as on-money receipts) that forms the basis of the revision, as this indicates the assessment order is not erroneous or prejudicial to the interest of revenue.
Property held as stock-in-trade is not assessable under the head 'Income from House Property' (Section 23). An Assessing Officer's decision not to tax such income, when supported by inquiry, typically cannot be considered erroneous and prejudicial under Section 263.
The Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days.
The law declared by the Supreme Court is binding on all courts in India, and decisions of a High Court are binding on subordinate courts and tribunals within its jurisdiction but not on courts or tribunals outside its jurisdiction.
Most recent orders on record, from 2026.
The Tribunal held that the expenses incurred for preservation of environment, even if not allowable under Section 11 as charitable purpose, could be allowed under Section 37(1) if the assessee were treated as carrying on a business. The Tribunal referred to the principle that expenditure for preservation of business interests can be allowed. Citing the Delhi High Court in Petroleum Sports Promotion Board, the Tribunal noted that even if a trust is denied registration and its income is taxed as 'income from other sources', relevant expenditures should be allowed under Section 57(iii). The Tribunal emphasized that Section 57(iii) requires expenditure to be wholly and exclusively for the purpose of making or earning income, not necessarily that income is actually earned. The Tribunal found that the assessee had submitted necessary documents for the expenses, which were not rebutted by the AO. The AO's disallowance without rejecting books of account was deemed impermissible. Therefore, the AO was directed to allow these expenses as if the assessee were running a business, by following normal rates of income.
The Tribunal held that the issue was squarely covered in favour of the assessee by the decision of a Co-ordinate Bench in the case of Ashish Dubey vs. ACIT (ITA No. 222/Del/2020). In that case, the Tribunal had observed that once the assessee established, on the basis of material evidence, the fact of payment of donation and the receipt acknowledged to the assessee, the mere fact that the political party failed to account for the donation received did not fault the assessee as a donor, thereby denying the deduction. The Tribunal noted that the assessee had provided a copy of the donation receipt, the PAN of the political party, its registration under section 29A of the Representation of the People Act, 1951, its ITR, and confirmation by email. Bank statements corroborated the donations made through banking channels. The Tribunal found no reason to take a different view, as there was no change in facts and law, and the Revenue could not produce any materials to controvert the findings in Ashish Dubey. The Tribunal also referred to a similar decision in ITAT Rajkot in the case of Nihil Nitinbhai Bhuptani (ITA No.479/RJT/2025). Therefore, respectfully following the binding precedent, the Tribunal deleted the addition made by the Assessing Officer. The appeal filed by the assessee was allowed.
The Tribunal admitted the additional legal ground challenging the reassessment proceedings, citing the Supreme Court's decision in National Thermal Power Company Ltd. vs. CIT. The Tribunal found that the reassessment proceedings were initiated beyond a period of three years from the end of the relevant assessment year. For such reopening, the Assessing Officer must possess material showing that income chargeable to tax had escaped assessment and such escaped income amounted to or was likely to amount to Rs. 50,00,000/- or more, as per section 149(1)(b) of the Act. The Tribunal noted that the Assessing Officer did not carry out the required analysis of the information before initiating reassessment proceedings, and the escaped income ultimately assessed was far below the statutory monetary threshold. Relying on the coordinate bench decision in Shri Ashokbhai Anbabhai Kachadiya and Prakash Babulal Bhandari v. ITO, the Tribunal held that the reassessment proceedings were barred by limitation and without jurisdiction. Consequently, the reassessment order passed by the Assessing Officer and the directions issued by the CIT(A) were quashed. As the reassessment itself was quashed, the issues on merits regarding the additions were rendered academic and infructuous.
The Tribunal held that the addition of Rs. 2,10,000/- based on unauthenticated and unsigned Excel sheets found from a third party's premises was not sustainable. The Tribunal noted that the Excel sheet lacked the assessee's signature or any nexus with the assessee, and it was a 'dumb document' without evidentiary value. Crucially, the Tribunal emphasized that an opportunity for cross-examination of the third party from whom the data was seized ought to have been provided, as the addition was made solely on this material without any corroborative evidence. This failure to provide cross-examination violated the principles of natural justice, which is a settled legal position supported by Supreme Court decisions in Krishnachand Chelaram and Andaman Timber Industries. The Tribunal also referred to the jurisdictional Gujarat High Court's decision in PCIT vs. Kaushik Nanubhai Majithia, which held that proceedings under Section 153C initiated based on an Excel sheet found from a third party, without corroborative material and without adjudicating the payment, were vitiated. The Tribunal found the issue squarely covered by a coordinate bench decision in M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd. Therefore, the addition was deleted, and the appeal was allowed. The Tribunal did not expressly leave any issue undecided.
The Tribunal first addressed the delay in filing the appeals. Citing decisions of the Supreme Court and the Gujarat High Court, it emphasized a pragmatic and liberal approach to condonation of delay, stating that substantive rights should not be defeated on technicalities unless malafide or negligence is writ large. The Tribunal found the reasons provided in the affidavit convincing and constituting a reasonable cause, and thus, condoned the delay of 434 and 526 days in both appeals in the interest of justice. Subsequently, the Tribunal, respectfully following the binding precedent of the jurisdictional High Court of Gujarat on identical facts, quashed the reassessment proceedings initiated by the Assessing Officer under section 147/148 of the Act. As the reassessment proceedings were quashed, the grounds raised by the assessee on merit became academic and infructuous. Consequently, the appeal in ITA No. 514/RJT/2026 was allowed. Regarding the penalty appeal (ITA No. 515/RJT/2026), the Tribunal held that since the assessment order itself was quashed, there was no foundation to levy penalty under section 271(1)(c), applying the legal maxim "Sublato fundamento cadit opus" (foundation being removed, structure falls). Therefore, the penalty was also deleted, and the appeal was allowed. In combined result, both appeals were allowed.
The Tribunal held that the reassessment proceedings initiated against the assessee are bad in law due to a defective approval under section 151 of the Income Tax Act, 1961. The Tribunal observed that the approval granted by the Income Tax Authority was neither digitally nor manually signed. Citing the decision in Rolex Rings Limited v. DCIT, the Tribunal emphasized that a notice or document without a signature loses its relevance and is to be treated as invalid. Section 282A of the Act mandates that notices or documents must be signed, either manually for paper form or digitally for electronic form. The absence of a signature on the approval under section 151 renders it invalid, meaning the Assessing Officer failed to assume proper jurisdiction to issue the notice under section 148 of the Act. Consequently, the reassessment order was quashed. The addition made by the Assessing Officer was deleted, and the appeal of the assessee was allowed.
The Tribunal held that the reopening of assessment under section 147 was valid. The assessee's contention that the land sold was agricultural land was accepted. The Tribunal found that the Ld. CIT(A) had erred in holding that the sale of agricultural land constituted the sale of non-agricultural land solely on the alleged ground that the appellant did not furnish evidence of agricultural operations during the relevant period. The Tribunal emphasized that the classification of land in revenue records and its location are the primary determinants of its agricultural character, not necessarily the conduct of agricultural activity in the year of sale or the status of the purchaser. The Tribunal noted that the Ld. CIT(A) had expressly recorded that if credible documents demonstrating agricultural use were produced, the computation of capital gains would become redundant. Consequently, the Tribunal directed the Assessing Officer to re-examine the issue of the nature of the land and the computation of capital gains, if any, after considering the evidence of agricultural use and classification in the revenue records. The issue of whether the land constituted land not chargeable to capital gains under section 2(14) was to be conclusively determined.
The Tribunal first addressed the delay in filing the appeals. Citing decisions of the Supreme Court and the Gujarat High Court, it emphasized a pragmatic and liberal approach to condonation of delay, stating that substantive rights should not be defeated on technicalities unless malafide or negligence is writ large. The Tribunal found the reasons provided in the affidavit convincing and constituting a reasonable cause, and thus, condoned the delay of 434 and 526 days in both appeals in the interest of justice. Subsequently, the Tribunal, respectfully following the binding precedent of the jurisdictional High Court of Gujarat on identical facts, quashed the reassessment proceedings initiated by the Assessing Officer under section 147/148 of the Act. As the reassessment proceedings were quashed, the grounds raised by the assessee on merit became academic and infructuous. Consequently, the appeal in ITA No. 514/RJT/2026 was allowed. Regarding the penalty appeal (ITA No. 515/RJT/2026), the Tribunal held that since the assessment order itself was quashed, there was no foundation to levy penalty under section 271(1)(c), applying the legal maxim "Sublato fundamento cadit opus" (foundation being removed, structure falls). Therefore, the penalty was also deleted, and the appeal was allowed. In combined result, both appeals were allowed.
The Tribunal noted that the assessment was carried out under Section 144 of the Act and the order of the Ld. CIT(A) was non-speaking because the assessee could not file the required documents and details before the Ld. CIT(A) despite several opportunities. The Tribunal did not wish to make any comments on the merits of the grounds raised. It observed that the assessee had not been given a sufficient opportunity of being heard and could not plead his case successfully before the Ld. CIT(A). Citing the principle of natural justice and fair play, the Tribunal restored the matter back to the file of the Ld. CIT(A) for de novo adjudication and to pass a speaking order after affording sufficient opportunity of being heard to the assessee. The assessee was also directed to contest his stand forthwith. Therefore, the order of the Ld. CIT(A) was set aside and the matter was remitted back to the file of the Ld. CIT(A) to adjudicate the issue afresh on merits. For statistical purposes, the appeal of the assessee was treated as allowed.
The Tribunal noted that the assessee relied on judicial precedents without adequately explaining their applicability to the facts of the case. In the absence of proper assistance and adequate material on record, the Tribunal was unable to conclusively adjudicate the issue. Therefore, in the interest of justice and fair play, the Tribunal restored the issue to the file of the Assessing Officer for fresh examination. The Assessing Officer was directed to consider the assessee's submissions and supporting evidence, examine the claims regarding agricultural land, cotton production, and agricultural income, and decide the issue afresh after providing a reasonable opportunity of being heard to the assessee. The appeal was allowed for statistical purposes.
The Tribunal held that the reassessment proceedings were liable to be set aside/quashed. The Assessing Officer had issued the notice under section 147/148 of the Act based on incorrect facts. Crucially, the AO himself accepted that the assessee did not have a bank account in Kotak Mahindra Bank, yet this was stated as a reason for reopening. This indicated a complete non-application of mind by the AO. The Tribunal noted that the "Reasons to believe" did not contain any allegation of the assessee failing to disclose material facts leading to escapement of income and were based on borrowed satisfaction. The AO had taken irrelevant facts into consideration and proceeded on a factually incorrect basis. The Tribunal relied on the Gujarat High Court decision in Vijay Ramanlal Sanghvi and the decision in Inductotherm (India) (P) Ltd. v. M. Gopalan. As the reassessment itself was quashed, all other issues on merits of the additions were rendered academic and infructuous. The appeals were allowed.
The Tribunal held that the assessee cannot be treated as an "assessee in default" under section 201(1) of the Income Tax Act, 1961, for the impugned period. The reasoning was that the assessee was operating under the binding interim directions of the Hon'ble Madras High Court during the relevant period. These directions explicitly stated that LFC payments would not amount to income for the purpose of TDS deduction. Therefore, the assessee had a legal obligation to comply with these judicial orders, which effectively restrained it from deducting tax at source. The Tribunal emphasized that the obligation under section 192 of the Act to deduct tax at source cannot be read in isolation and must yield to binding judicial orders. Consequently, the failure to deduct tax in such circumstances cannot be equated with a default contemplated under section 201(1). The Tribunal respectfully followed the decisions of the Hon'ble Kerala High Court in ITA No.45 of 2025 and a coordinate bench decision in ITA No.514/Agr/2024, which held that where an assessee is restrained by judicial orders from deducting tax at source, section 201(1) cannot be invoked. The subsequent decision of the Hon'ble Supreme Court, while settling the merits, cannot retrospectively fasten liability under section 201(1) for a period during which the assessee was acting in compliance with judicial orders. Accordingly, the demand raised under section 201(1) and the consequential interest under section 201(1A) were directed to be deleted. The appeals were allowed.
The Tribunal held that the assessee's onus of proving the source of cash deposits was discharged. It noted that the bank account was jointly held by the assessee and his brother, Shri Dipak Arunbhai Raithatha, but the assessee contended that the account was operated exclusively by his brother and the deposits pertained to him. In response to the AO's notice under section 133(6), the assessee provided an explanation and confirmations from third parties, which was further corroborated by the confirmation of Shri Dipak Arunbhai Raithatha. The Tribunal relied on the principle that if documentary material establishes exclusive operation and utilization of a joint account by one holder, and the deposits represent their funds, the addition should not be made in the hands of the other. It cited the decisions in Sakina Ahmedali Kantavala v. ITO (Ahmedabad Bench) and Trupti Shukla v. ITO (Raipur Bench) to support the view that affidavits and corroborative material can explain the source of funds in joint accounts, and liability should not be fastened on one joint holder when the other explains and substantiates the source. Therefore, the addition of Rs. 12,50,000/- was deleted. The issue regarding the validity of notice under section 148 was not expressly decided, as the appeal was allowed on merits.
The Tribunal held that the appeals are squarely covered by the decision of the Co-ordinate Bench in the case of Ashish Dubey vs. ACIT. The Tribunal noted that in the Ashish Dubey case, the assessee had provided evidence such as donation receipts, the political party's PAN, its registration with the Election Commission, its ITR, and confirmation emails, along with bank statements corroborating the donations made through banking channels. The Tribunal in Ashish Dubey had observed that even if the political party failed to account for the donation in its return, the donor assessee cannot be faulted for denying the deduction, provided the fact of payment and receipt is established by material evidence. Since the facts and law were similar, and the revenue could not produce any material to controvert the findings in Ashish Dubey, the Tribunal respectfully followed the precedent. The addition made by the Assessing Officer was deleted. The appeals were allowed with consequential effect.
The Tribunal held that the appeals are squarely covered by the decision of the Co-ordinate Bench in the case of Ashish Dubey vs. ACIT. The Tribunal noted that in the Ashish Dubey case, the assessee had provided evidence such as donation receipts, the political party's PAN, its registration with the Election Commission, its ITR, and confirmation emails, along with bank statements corroborating the donations made through banking channels. The Tribunal in Ashish Dubey had observed that even if the political party failed to account for the donation in its return, the donor assessee cannot be faulted for denying the deduction, provided the fact of payment and receipt is established by material evidence. Since the facts and law were similar, and the revenue could not produce any material to controvert the findings in Ashish Dubey, the Tribunal respectfully followed the precedent. The addition made by the Assessing Officer was deleted. The appeals were allowed with consequential effect.
The Tribunal held that the appeals are squarely covered by the decision of the Co-ordinate Bench in the case of Ashish Dubey vs. ACIT. The Tribunal noted that in the Ashish Dubey case, the assessee had provided evidence such as donation receipts, the political party's PAN, its registration with the Election Commission, its ITR, and confirmation emails, along with bank statements corroborating the donations made through banking channels. The Tribunal in Ashish Dubey had observed that even if the political party failed to account for the donation in its return, the donor assessee cannot be faulted for denying the deduction, provided the fact of payment and receipt is established by material evidence. Since the facts and law were similar, and the revenue could not produce any material to controvert the findings in Ashish Dubey, the Tribunal respectfully followed the precedent. The addition made by the Assessing Officer was deleted. The appeals were allowed with consequential effect.
The Tribunal condoned the delay of 1105 days in filing the appeal, finding that the reasons explained by the assessee, supported by an affidavit and circumstances of prolonged medical emergency in the family, justified condonation in the interest of substantial justice. The Tribunal noted that both assessment and appellate proceedings were concluded ex parte, and the assessee could not effectively represent her case. In the interest of justice and fair play, the matter was restored to the Assessing Officer for fresh adjudication. The Assessing Officer was directed to re-examine the issue of cash deposits of Rs.2,20,134/- after considering the assessee's explanation and evidence, and providing a reasonable opportunity of being heard. The assessee was directed to comply with notices and cooperate. The appeal was allowed for statistical purposes.
The Tribunal held that the reassessment proceedings were liable to be set aside/quashed. The Assessing Officer had issued the notice under section 147/148 of the Act based on incorrect facts. Crucially, the AO himself accepted that the assessee did not have a bank account in Kotak Mahindra Bank, yet this was stated as a reason for reopening. This indicated a complete non-application of mind by the AO. The Tribunal noted that the "Reasons to believe" did not contain any allegation of the assessee failing to disclose material facts leading to escapement of income and were based on borrowed satisfaction. The AO had taken irrelevant facts into consideration and proceeded on a factually incorrect basis. The Tribunal relied on the Gujarat High Court decision in Vijay Ramanlal Sanghvi and the decision in Inductotherm (India) (P) Ltd. v. M. Gopalan. As the reassessment itself was quashed, all other issues on merits of the additions were rendered academic and infructuous. The appeals were allowed.
The Tribunal held that the assessee cannot be treated as an "assessee in default" under section 201(1) of the Income Tax Act, 1961, for the impugned period. The reasoning was that the assessee was operating under the binding interim directions of the Hon'ble Madras High Court during the relevant period. These directions explicitly stated that LFC payments would not amount to income for the purpose of TDS deduction. Therefore, the assessee had a legal obligation to comply with these judicial orders, which effectively restrained it from deducting tax at source. The Tribunal emphasized that the obligation under section 192 of the Act to deduct tax at source cannot be read in isolation and must yield to binding judicial orders. Consequently, the failure to deduct tax in such circumstances cannot be equated with a default contemplated under section 201(1). The Tribunal respectfully followed the decisions of the Hon'ble Kerala High Court in ITA No.45 of 2025 and a coordinate bench decision in ITA No.514/Agr/2024, which held that where an assessee is restrained by judicial orders from deducting tax at source, section 201(1) cannot be invoked. The subsequent decision of the Hon'ble Supreme Court, while settling the merits, cannot retrospectively fasten liability under section 201(1) for a period during which the assessee was acting in compliance with judicial orders. Accordingly, the demand raised under section 201(1) and the consequential interest under section 201(1A) were directed to be deleted. The appeals were allowed.
The Tribunal held that the reassessment proceedings were bad in law due to a defective approval under section 151 of the Act. The Tribunal noted that the approval provided by the revenue was neither digitally nor manually signed. It respectfully followed the binding precedent of the Coordinate Bench in M/s Aditya Plastic (supra), which had also quashed the assessment order on similar grounds, citing the lack of a valid signature on the approval under section 151 and the Allahabad High Court's decision in Vikas Gupta. The Tribunal found no reason to deviate from this precedent as there was no change in facts or law, and the revenue could not produce any material to controvert the earlier findings. Therefore, the assessment order framed by the AO was quashed. The appeal of the assessee was allowed.
The Tribunal noted that the assessee's counsel stated that the assessee did not wish to press the appeal. The revenue's representative did not object to this submission. Consequently, the Tribunal treated the appeal as withdrawn. The operative direction was to treat the appeal as withdrawn, which resulted in the appeal being dismissed. No specific findings were made on the merits of the PCIT's order as the appeal was not pressed.
The Tribunal held that the deletion of the addition by the Learned CIT(A) was correct and did not warrant interference. The reasoning was based on the fact that the substantive assessment order for Assessment Year 2017-18 in the hands of Shri Manishbhai Rasikbhai Bavariya, dated December 19, 2019, clearly showed that additions were made on an absolute basis, including the cash deposit of Rs. 2,53,60,000/- in the specified bank account. The assessment order for Shri Bavariya also recorded his statement that the bank account belonged to M/s. Eagle Petroleum and the deposits were made by him. The Tribunal emphasized that the Revenue cannot subject the same income to substantive taxation in the hands of one person and simultaneously sustain a corresponding addition in the hands of another. Protective assessments are a measure of abundant caution where there is uncertainty regarding the assessable person, but they cannot lead to double taxation of the same income. Since the same income had already been substantively assessed in the hands of Shri Manishbhai Rasikbhai Bavariya, the corresponding addition in the hands of the assessee firm could not be sustained. The Tribunal approved and confirmed the order of the CIT(A).
The Tribunal held that the appeal of the assessee is allowed. The reasoning was that it is an undisputed fact that the first order passed under section 263 of the Act dated 30.03.2021 had already been quashed by the Tribunal. Once the original revisionary order itself has been set aside, every consequential proceeding flowing therefrom automatically loses its legal foundation. The assessment order dated 28.03.2022 was merely a consequence of the first order under section 263 of the Act and could not survive independently after the parent order had been quashed. The Tribunal noted that the second 263 order passed by the Ld. PCIT was on a different issue, and not connected with the first 263 order, therefore, the second 263 order is unsustainable in the eye of law. The operative direction is that the appeal of the assessee is allowed.
On the issue of deduction under section 80-IA, the Tribunal found merit in the assessee's contention that common expenses were arbitrarily allocated. It noted that the windmill generation was automated and remotely situated, and general factory expenses had no operational connection. The Tribunal held that where direct expenses are accounted for and standalone computations identify all related costs, the revenue cannot arbitrarily apportion general overheads without establishing a direct nexus. Therefore, the disallowance was deleted. On the issue of disallowance under section 40(a)(ia) for royalty payments, the Tribunal found that the assessee had duly deducted tax under section 195 on payments to a non-resident and deposited it with the government. The Tribunal held that the disallowance could not be sustained merely on the ground of an alleged difference in the applicable TDS provision (section 194J vs. 195) without establishing a statutory basis for the disallowance. Accordingly, the disallowance was deleted. The appeal was allowed in terms of these directions.
The Tribunal condoned the delay of 917 days in filing the appeal, finding the reasons provided by the assessee, including partner disputes and tax consultant negligence, to be convincing and constituting a reasonable cause. The Tribunal adopted a liberal and pragmatic approach, citing precedents from the ITAT, Supreme Court, and Gujarat High Court, emphasizing that substantive rights should not be defeated by technicalities. Regarding the addition of Rs. 40,00,000/- as unsecured loan and Rs. 2,04,164/- as interest, the Tribunal deleted both additions. The reasoning was that the assessee had duly repaid the loan amount to the lender through banking channels, and interest was paid with TDS deducted. The Tribunal relied on the judgments in CIT vs. Ayachi Chandrashekhar Narsangji (Guj. HC) and Ojas Tarmake (P.) Ltd. (Gujarat-HC), which held that when loan repayment is accepted in a subsequent year and transactions are through banking channels, additions under Section 68 are not justified. The ratio is that repayment of a loan and payment of interest with TDS fortify the genuineness of the loan, and the substantive right of the assessee should not be denied on technicalities, especially when supported by judicial pronouncements.