ITAT Rajkot Judgments — August 2025

The Tribunal held that the assessee filed Form 10B late, but it was available with the Assessing Officer. The Tribunal noted that an audit report can be filed at a later stage, even before the appellate authority, with sufficient cause. The denial of exemption solely based on the late filing of Form 10B was not justified.

The Tribunal noted that the CIT(A) issued multiple notices, but there was no finding on whether they were properly served. Considering the assessee's explanation for delay (medical reasons, lack of communication with CA) and the potential violation of natural justice by the ex-parte dismissal, the Tribunal decided to set aside the CIT(A)'s order.

The Tribunal found that both lower authorities passed orders without granting the assessee adequate opportunity to be heard, noting that the non-compliance was not intentional. It remitted the matter back to the AO for fresh adjudication, directing a speaking order after providing the assessee sufficient opportunity of hearing, subject to a cost of Rs. 2,000/- to the "Prime Minister's National Relief Fund".

The Tribunal noted that the CIT(A) passed ex-parte and non-speaking orders without discussing the merits of the case. This was a violation of the principles of natural justice, as the assessee was not given a sufficient opportunity to be heard. Therefore, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the AO for de novo adjudication.

The Tribunal noted that the assessee was not given sufficient opportunity to be heard and the CIT(A) did not discuss the case on merits, violating the principle of natural justice. Therefore, the orders of the CIT(A) were set aside and the matters were remitted back to the Assessing Officer for de novo adjudication.

The Tribunal held that the AO had conducted sufficient inquiry by issuing multiple notices under section 142(1) and receiving replies with documentary evidence. The PCIT's action under section 263 was considered a roving and fishing inquiry, not justified by the facts. Relying on various High Court judgments, the Tribunal stated that section 263 cannot be invoked for every error, and it requires the order to be both erroneous and prejudicial to the revenue.

The Tribunal condoned the delay of 249 days, noting that substantial justice should be preferred over technical considerations. The Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for adjudication on merits, subject to a cost of Rs.2,000/-.

The Tribunal noted that the impounded diary was found at the premises of a third party, not the assessee, and the assessee firm had not commenced commercial operations at the time. Furthermore, statements from partners indicated the diary was for window-dressing purposes to obtain bank finance. The Tribunal found no corroborative evidence linking the diary entries to the assessee firm and upheld the CIT(A)'s deletion of additions concerning land investment, cash receipts, and bogus purchases.

The Tribunal found that the reasons provided for the delay in filing the appeal were convincing and constituted a reasonable cause. The delay was not deliberate or intentional but due to circumstances beyond the assessee's control. The Tribunal condoned the delay of 55 days and admitted the appeal.

The Tribunal condoned the delay, citing the mistake of the assessee's advocate as a sufficient cause. On merits, the Tribunal held that the mismatch in the trust's name between the PAN card and the registration certificate should not be the sole reason for rejection, especially when the PAN name is an alias. The CIT(E) should have directed the assessee to correct the PAN card.

The Tribunal noted that the CIT(A) passed ex-parte and non-speaking orders without discussing the merits, violating the principle of natural justice. The assessee was not given sufficient opportunity to be heard. Therefore, the matter was restored to the AO for de novo adjudication.

The Tribunal noted that the assessee had presented a detailed chart of trading and profit and loss accounts showing various deductions claimed under Section 80P. It was observed that the CIT(A) had focused only on Section 80P(2)(d) and ignored other deductions claimed by the assessee. Therefore, the Tribunal held that the assessee did not get a proper opportunity to be heard and that the order of the CIT(A) needed to be set aside.

The Tribunal condoned the delay in filing both appeals, finding sufficient cause. It set aside the ex parte orders passed by the CIT(A) and remitted both the quantum assessment and penalty matters back to the Assessing Officer for fresh adjudication. The Tribunal allowed the assessee to adduce any relevant evidence during the de novo assessment proceedings.

The Tribunal noted that the assessment was carried out u/s 144, and the CIT(A)'s order was ex-parte and non-speaking. The assessee was not given sufficient opportunity to be heard, and the case was not discussed on merits. Therefore, the order of the CIT(A) was set aside.

The Tribunal held that the reassessment proceedings initiated by the AO were invalid due to the lack of proper approval from the appropriate authority as required by Section 151 of the Act. Since the reassessment order was invalid, the revision proceedings under Section 263 were also invalid. The Tribunal also found that the AO had conducted sufficient inquiries and taken a plausible view, which was not erroneous or prejudicial to the revenue.

The Tribunal condoned the delay in filing both appeals due to sufficient cause. It set aside the CIT(A)'s ex-parte orders and remitted both the quantum assessment and penalty matters back to the Assessing Officer for fresh adjudication, granting the assessee an opportunity to present evidence and be heard, with liberty for the AO to initiate fresh penalty proceedings if necessary.

The Tribunal held that Section 57(iii) of the Income Tax Act allows deduction for expenditure incurred wholly and exclusively for the purpose of earning income, irrespective of whether the income earned is profitable or not. The rate of interest paid is not the sole determinant for disallowance if the expenditure is otherwise genuine and incurred for earning income.

The Tribunal noted that the impounded diary, used as primary evidence by the AO, was found to contain entries prior to the firm's existence and was not corroborated by independent evidence. The statements recorded under section 133A were deemed to have no evidentiary value as they were not sworn. The CIT(A) had deleted the additions, and the Tribunal found no infirmity in these deletions. The appeals of the Revenue were dismissed, and the Cross Objection filed by the assessee was also dismissed.

The Tribunal held that the Assessing Officer conducted a detailed inquiry by issuing multiple notices and receiving replies with documentary evidence. The PCIT's assumption that the order was erroneous and prejudicial to revenue was not substantiated as the AO had applied his mind. The revision proceedings were deemed to be a roving and fishing inquiry.

The Tribunal condoned the delay of 351 days, noting the assessee's status as a senior citizen and the explanation of mitigating circumstances. The Tribunal further noted that the CIT(A) had not decided the issue on merits as per the mandate and set aside the order of CIT(A), remitting the matter back to the Assessing Officer for fresh adjudication.

The Tribunal noted that the assessee provided details of the loan, including confirmation from the lender and repayment of the loan. The books of accounts were audited and no defects were found. The Tribunal held that the genuineness of the transaction was established, and the assessee had discharged their burden under section 68. Therefore, the addition for the unsecured loan and commission expenses was unjustified.

The Departmental Representative raised no objection to the assessee's request. Therefore, the Tribunal treated the appeal as withdrawn.

The Tribunal held that the trust deed contained some religious objects, but these did not dominate the charitable purposes. The main activities of the trust were found to be charitable in nature. The Tribunal relied on the fact that religious expenditure was within the prescribed limit of 5% of total income and cited case law to support its view.

The Tribunal held that the CIT(A)'s deletion of the addition related to the difference in purchase figures was justified. Regarding the additions for unexplained cash credits (unsecured loans), the Tribunal upheld the CIT(A)'s decision to confirm a part of the addition (Rs. 15,82,200) while deleting the larger portion (Rs. 1,70,90,800).

The Tribunal upheld the CIT(A)'s findings, dismissing the Revenue's appeals related to the 80-IC deduction for the Rudrapur unit, affirming it as an independent manufacturing unit with arm's length inter-unit pricing. The Tribunal also dismissed the Revenue's appeals regarding the 80-IA deduction and the apportionment of expenses, confirming that appellate authorities can entertain claims not in the original return and that the assessee maintained separate accounts. The Revenue's appeal on loss set-off for 80-IC was dismissed, while assessee's grounds concerning late payment of PF and ESI were dismissed citing a Supreme Court judgment.

The Tribunal dismissed most of the Revenue's appeals, upholding the CIT(A)'s decisions. It affirmed that the Rudrapur unit qualified as an independent manufacturing unit eligible for Section 80-IC deduction, citing substantial investment, separate registrations, and value addition, and also accepted the arm's length pricing of inter-unit transfers. The Tribunal also upheld the allowance of the Section 80-IA deduction, stating that appellate authorities could entertain claims not made in the original return. Revenue's appeal regarding disallowance of expenses apportionment and set-off of losses between Rudrapur units was dismissed. However, the assessee's grounds concerning late payment of PF/ESI were dismissed, relying on the Supreme Court's judgment in `Checkmate Services P. Ltd`. One Revenue appeal was dismissed on low tax effect grounds.

The Tribunal noted that the assessing officer had conducted sufficient inquiries and relied on judgments of the jurisdictional High Court. The PCIT's reliance on a decision of the Punjab & Haryana High Court was not binding as it was not the jurisdictional High Court. The Tribunal held that the interest awarded under section 28 of the Land Acquisition Act is part of the compensation and not 'interest' as contemplated under section 56(2)(viii) of the Income Tax Act, which aligns with the view of the jurisdictional High Court. Therefore, the PCIT erred in invoking revisionary jurisdiction under section 263.

The ITAT upheld the CIT(A)'s decision, affirming that the Rudrapur unit qualified as an independent manufacturing unit eligible for Section 80IC deduction, citing its separate registrations, significant investments, and manufacturing activities. The tribunal also confirmed the admissibility of the Section 80IA claim, even though it was not in the original return of income, agreeing that appellate authorities could entertain such claims. Disallowances related to the apportionment of common expenses and the set-off of losses between Rudrapur units were deleted. However, the assessee's appeal concerning additions made due to late payment of PF and ESI was dismissed.

The Tribunal noted that the Rudrapur unit had separate registrations, licenses, and substantial investment in plant and machinery, indicating it was an independent manufacturing unit. The Tribunal also considered previous rulings and found that the activities carried out at Rudrapur fell within the definition of 'manufacture'. Therefore, the Tribunal upheld the CIT(A)'s decision.

The Tribunal held that the Rudrapur unit of the Assessee qualified as an independent manufacturing unit, and thus eligible for deduction under Section 80-IC. The Tribunal also addressed various grounds raised by both the Revenue and the Assessee concerning the apportionment of expenses, the claim of deduction under Section 80-IA, and the disallowance of certain expenses. Some grounds were dismissed, while others were allowed or partly allowed.

The Tribunal dismissed the Revenue's appeals, confirming the CIT(A)'s decision to allow the Section 80-IC deduction for the Rudrapur unit, finding it to be an independent manufacturing unit that met all conditions. The Tribunal also upheld the CIT(A)'s decision to allow the Section 80-IA deduction, affirming that appellate authorities can entertain claims not made in the original return. The protective disallowance related to inter-unit transfers and the disallowance of expenses were deleted. However, the assessee's grounds concerning the disallowance for late payment of PF and ESI were dismissed, citing the Supreme Court's judgment in *CHECKMATE SERVICES P. LTD*.

The Tribunal held that the AO had conducted necessary inquiries and considered the documents submitted by the assessee. The repayment of the loan in the subsequent year was also considered. The Tribunal found that the PCIT had not demonstrated how the assessment order was prejudicial to the revenue and quashed the revision order.

The Tribunal condoned the 1700-day delay in filing the electronic appeal, stating it was caused by the CIT(A)'s direction to e-file. The Tribunal also directed the Assessing Officer to consider the assessee's revised return and the accountant's affidavit regarding the alleged errors in the original filing.

The Tribunal noted that the amalgamation was approved by the NCLT and was driven by commercial considerations. The depreciation on goodwill was claimed in accordance with Accounting Standard-14 and supported by various judicial precedents. The amendment to Section 32 of the Income Tax Act regarding goodwill was prospective and not applicable to the assessment year in question.

The Tribunal held that the PCIT's order under section 263 was not sustainable. The AO had conducted necessary inquiries and verified the transactions by obtaining confirmations, bank payments, and purchase bills from the suppliers. The PCIT's view was merely a change of opinion and not based on any concrete evidence of fraud or lack of inquiry by the AO, especially since the suppliers had filed their GST returns. The Tribunal relied on various judicial precedents stating that a different view by the Commissioner does not make the AO's order erroneous if the AO has adopted a possible view after due inquiry.

For AY 2011-12, the Tribunal found that the reasons recorded for reopening were factually incorrect as the LTCG did not pertain to Vax Housing Finance Corporation Ltd. It was held that the AO acted arbitrarily without proper verification. Consequently, the reassessment proceedings were quashed. For AY 2016-17, the Tribunal held that the buyback of shares by Garg Logistics Pvt. Ltd. qualified under Section 115QA, and the company had paid the appropriate buyback tax. The exemption under Section 10(34A) for the shareholder (assessee) was therefore valid and could not be denied by the AO due to any alleged non-compliance by the company. The addition made by the AO was deleted.

The Tribunal held that Section 195 of the Income Tax Act mandates TDS deduction only when the payment is chargeable to tax in India. Since the commission paid to foreign agents was for services rendered outside India and did not accrue or arise in India, it was not taxable in India. Therefore, the AO was incorrect in disallowing the expense.

For AY 2011-12, the Tribunal held that the reasons recorded by the AO for reopening were factually incorrect and based on non-application of mind, as the alleged LTCG did not pertain to the Vax Housing Finance Corporation Ltd scrip. Therefore, the reopening was quashed. For AY 2016-17, the Tribunal held that the exemption under Section 10(34A) for income from buyback of shares is triggered when the company complies with Section 115QA, and the exemption is not dependent on the company's actual tax payment. The AO wrongly denied the exemption based on the company's alleged non-compliance.

The Tribunal held that the AO had conducted sufficient inquiry during the assessment proceedings by issuing multiple notices and receiving replies with documentary evidence. The AO had taken a plausible view by disallowing only a percentage of profit on bogus purchases, which was considered reasonable based on various judicial precedents. Therefore, the PCIT's invocation of section 263 jurisdiction was not justified as the AO's order was neither erroneous nor prejudicial to the interest of the revenue.

The Tribunal condoned the delay of 282 days in filing the appeal, citing the need for substantial justice and a reasonable cause presented in the affidavit. The Tribunal found that the CIT(A) passed an ex-parte order without adequate opportunity for hearing, violating principles of natural justice. The order of the CIT(A) was set aside and the matter was remitted back for fresh adjudication.

The Tribunal found both the assessment order and the CIT(A)'s ex parte order to be non-speaking and in violation of natural justice and Section 250(6). Consequently, the Tribunal set aside the CIT(A)'s order and remitted the case back to the Assessing Officer for a de novo assessment, subject to the assessee paying a cost of Rs. 2,000/- to the Prime Minister Relief Fund.

The Tribunal observed that the assessee trust is not a religious trust and does not exclusively benefit a particular community. The objects of the trust are for the general public and are charitable in nature. The CIT(E) did not provide specific findings about the utilization of income for any particular community or caste.

The Tribunal condoned the delay of 591 days, citing genuine hardship and the principle of substantial justice. The Tribunal also noted that the CIT(A) had not decided the issue on merits as per the mandate of Section 250(6) of the Act. The Tribunal set aside the order of the CIT(A) and restored the matter to the Assessing Officer for fresh adjudication.

The Tribunal found that the CIT(A) did not decide the issues properly as per Section 250(6) of the Act. With no objection from the Revenue, the Tribunal set aside the CIT(A)'s order and remitted the case back to the Assessing Officer for fresh, de novo adjudication. The assessee was granted an adequate opportunity to present all relevant documents, with a cost of Rs. 2000/- imposed for non-compliance, payable to the Prime Minister National Relief Fund.

The Tribunal held that the CIT(E) erred in rejecting the application. It was observed that the trust's objects are for the general public and not restricted to a particular community or caste, and that Section 13(1)(b) is applicable at the time of assessment, not registration. The Tribunal found no specific allegation by the CIT(E) that the assessee had utilized income for a particular community or caste.

The Tribunal held that the AO had conducted sufficient inquiry by issuing notices and receiving replies from the assessee. The PCIT's allegation that the AO failed to conduct proper inquiry was found to be baseless. The Tribunal further noted that the assessee had sufficient own funds for investment and did not incur any expenditure to earn exempt income.

The Tribunal considered the request of the assessee's counsel and decided to dismiss the appeal as withdrawn. The revenue's representative raised no objection to the withdrawal.

The Tribunal held that the trust was established prior to the Income Tax Act, 1961, and thus Section 13(1)(b) is not applicable. The CIT(E) erred in not considering this fact and in rejecting the application without proper opportunity to the assessee.