ITAT Rajkot Judgments — November 2025

The Tribunal observed that the Assessing Officer had issued only one proper show-cause notice for the penalty, and the other two instances were merely reminders concerning the first original notice. Consequently, the Tribunal deleted the penalty of Rs. 20,000/- pertaining to the two reminders and confirmed the penalty of Rs. 10,000/- for the single valid show-cause notice.

The Tribunal held that the cash deposits were from business activities and directed the Assessing Officer to make an addition at a net profit rate of 6% on the total cash deposited, considering the assessee's business of mobile recharge and phone sales. The Tribunal also directed that the income offered by the assessee in his original ITR should be reduced from the assessed total income.

The Tribunal held that interest on enhanced compensation for compulsory acquisition of agricultural land is part of the compensation and is eligible for exemption under Section 10(37) of the Income Tax Act, following the jurisdictional High Court's decision.

The Tribunal held that the notice issued under Section 148 was invalid as it was issued beyond the prescribed time limit and that the sanction for issuing the notice was obtained from the incorrect authority. Consequently, the reassessment proceedings were quashed.

The Tribunal held that the assessee failed to provide sufficient cause for the delay in filing the appeal and did not file a petition for condonation. Therefore, the appeal was dismissed on the ground of limitation.

The Tribunal held that Section 44AB requires an audit only if the assessee's total sales/turnover/gross receipts exceed the prescribed threshold. If commission income is below the threshold limit, tax audit is not applicable, and therefore, no penalty under Section 271B can be levied. The assessee consistently maintained that they are a commission agent and only receive commission, passing over the main amount to the counterparty.

The Tribunal held that the penalty of Rs. 10,000 levied under section 272A(1)(d) of the Income Tax Act, 1961, was not justified and should be deleted. The Tribunal noted that the assessee had furnished elaborate replies along with supporting evidence online on February 4, 2023, and February 22, 2023, in response to the notice under section 142(1) dated December 29, 2022, and subsequent notices. The assessment order itself accepted that the appellant had furnished details and was finalized under section 147 read with section 143(3), not under section 144. This indicated the assessee's respect for the statute and no intention to avoid compliance. The Tribunal relied on the Supreme Court's decision in Hindustan Steel Limited vs. State of Orissa, emphasizing that penalty proceedings are quasi-criminal and penalty should not ordinarily be imposed unless there is deliberate defiance or contumacious conduct. The Tribunal also referred to a Co-ordinate Bench decision in M/s. Raj Enterprise vs. ITO, which held that when an assessment is completed under section 143(3) and not section 144, subsequent compliance is considered good, and earlier defaults may be ignored, negating the case for penalty. Therefore, the penalty was deleted, and the appeal was allowed. No issue was expressly left undecided.

The Tribunal found that the assessment order was passed in haste without proper inquiry and that the assessee was not given a proper opportunity to present their case, violating the principles of natural justice. Therefore, the matter was set aside and remitted back to the Assessing Officer for fresh adjudication.

The Tribunal noted that the tax audit report did not show any disallowance for transportation expenses and that all such charges were paid through banking channels. The assessee provided Form No. 3CD and ledger accounts, confirming the genuineness of the expenses.

The Tribunal noted that the tax audit report did not show any disallowance for transportation expenses and that all such charges were paid through banking channels. The assessee provided Form No. 3CD and ledger accounts, confirming the genuineness of the expenses.

The Tribunal noted that the quantum addition, which formed the basis for the penalty, had been deleted in a prior appeal. Relying on the legal maxim 'Sublato fundamento cadit opus', the Tribunal held that if the foundation fails, the superstructure also falls.

The Tribunal condoned the delay in filing the appeal, citing the advocate's mistake and the principle of substantial justice. While acknowledging that the assessee had provided some explanations for the cash deposits (agricultural loans, past savings, fixed deposit maturities), the Tribunal found that the assessee failed to sufficiently prove all personal expenses and drawings. Therefore, a net profit of 10% was adopted on the cash deposit.

The Tribunal, following the Supreme Court's decision in CIT vs. M/s. Avani Exports & Anr., held that exporters with turnover below and above Rs. 10 crores should be treated similarly and are eligible for deduction under Section 80HHC.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on estimated additions. Furthermore, for assessees opting for presumptive taxation under Section 44AD, maintaining books of accounts under Section 44AA is not mandatory, thus deleting the penalty under Section 271A.

The Tribunal condoned the delay in filing the appeal. While acknowledging some merit in the assessee's contentions regarding the AO's estimation without rejecting books of accounts, the Tribunal found that the entire relief could not be granted.

The Tribunal held that the notice under Section 148 of the Income Tax Act, 1961, issued on 21.04.2021 for AY 2015-16, was time-barred and invalid. Therefore, the assessment order itself was quashed.

The Tribunal directed the AO to adopt a net profit rate of 3% on cash deposits/credits in bank accounts as taxable income, following a previous ruling in the assessee's own case. The penalty under Section 271A for non-maintenance of books of accounts was deleted.

The Tribunal directed the AO to adopt a net profit rate of 3% on cash deposited/credits in bank accounts for taxation. For the penalty appeal, the Tribunal deleted the penalty under Section 271A, following a precedent where an assessee opting for presumptive taxation under Section 44AD is not required to maintain books of accounts.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on estimated additions. Furthermore, for assessees opting for presumptive taxation under Section 44AD, maintaining books of accounts under Section 44AA is not mandatory, thus deleting the penalty under Section 271A.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on estimated additions. Furthermore, for assessees opting for presumptive taxation under Section 44AD, maintaining books of accounts under Section 44AA is not mandatory, thus deleting the penalty under Section 271A.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on estimated additions. Furthermore, for assessees opting for presumptive taxation under Section 44AD, maintaining books of accounts under Section 44AA is not mandatory, thus deleting the penalty under Section 271A.

The Tribunal noted that the assessee consistently followed a cash basis for recognizing duty drawback since its inception, which is in accordance with the doctrine of prudence and general trade practice. Reliance was placed on the High Court of Bombay judgment in CIT vs. Matchwell Electricals (1) Ltd. and the Supreme Court in CIT vs Citibank N.A. The Tribunal held that there was no loss to the revenue by adopting the cash basis and that the method followed by the assessee was fair and consistent.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on estimated additions. Furthermore, for assessees opting for presumptive taxation under Section 44AD, maintaining books of accounts under Section 44AA is not mandatory, thus deleting the penalty under Section 271A.

The Tribunal noted that the assessee had commenced activities and filed applications within the extended time limit. Despite the CIT(E)'s inability to condone the delay, the Tribunal found genuine reasons for the delay and decided to condone it. The CIT(E) was directed to admit the applications and examine the conditions for approval under Section 80G(5)(iii).

The Tribunal held that the reopening of assessment was bad in law as it was initiated for mere verification and not based on tangible material indicating escaped income. The reassessment proceedings were quashed.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on estimated additions. Furthermore, for assessees opting for presumptive taxation under Section 44AD, maintaining books of accounts under Section 44AA is not mandatory, thus deleting the penalty under Section 271A.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on estimated additions. Furthermore, for assessees opting for presumptive taxation under Section 44AD, maintaining books of accounts under Section 44AA is not mandatory, thus deleting the penalty under Section 271A.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on estimated additions. Furthermore, for assessees opting for presumptive taxation under Section 44AD, maintaining books of accounts under Section 44AA is not mandatory, thus deleting the penalty under Section 271A.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on estimated additions. Furthermore, for assessees opting for presumptive taxation under Section 44AD, maintaining books of accounts under Section 44AA is not mandatory, thus deleting the penalty under Section 271A.

The Tribunal noted that the assessee had commenced activities and filed applications within the extended time limit. Despite the CIT(E)'s inability to condone the delay, the Tribunal found genuine reasons for the delay and decided to condone it. The CIT(E) was directed to admit the applications and examine the conditions for approval under Section 80G(5)(iii).

The Tribunal held that the reopening of assessment was bad in law as it was initiated for mere verification and not based on tangible material indicating escaped income. The reassessment proceedings were quashed.

The Tribunal held that the AO's 100% addition of trading receipts deposited in the bank account was erroneous. Considering the assessee's business of trading brass components and the nature of deposits as trading receipts, the Tribunal estimated the profit at 8% of the cash deposited in the bank account and directed the AO to make the addition accordingly under the head of income from business and profession, not under Section 115BBE.

The Tribunal noted that the assessee indeed acted as a commission agent with a margin of 1% to 1.25%. The Tribunal found that the AO's addition of 4% was on the higher side and that in a similar case, a 2% profit rate/commission rate was estimated by the ITAT, Rajkot Bench. Therefore, the addition was directed to be made at 2% of the total turnover.

The Tribunal held that the AO had conducted necessary inquiries and applied his mind, taking a plausible view based on judicial pronouncements. Therefore, the assessment order was neither erroneous nor prejudicial to the revenue's interest.

The Tribunal held that the PCIT erred in assuming jurisdiction under Section 263 as the AO had made sufficient inquiries and taken a plausible view based on the evidence provided. The PCIT's order was not sustainable as it merely substituted its opinion for that of the AO.

The Tribunal held that the Assessing Officer (AO) had made inquiries and applied his mind, and the PCIT cannot revise an order merely because he has a different opinion or believes further inquiry was needed. The Tribunal quashed the PCIT's order.

The Tribunal noted that the assessee failed to provide sufficient documentary evidence for the purchases. Both the assessee's counsel and the revenue's DR agreed that an addition of Rs. 1,80,000/- would be sufficient. The Tribunal directed the AO to make an addition of Rs. 1,80,000/- to the assessee's income.

The Tribunal noted that the assessee was not given sufficient opportunity to be heard and could not plead their case before the CIT(A), which violated the principle of natural justice. Therefore, the Tribunal set aside the CIT(A)'s order and restored the matters back for de novo adjudication.

The Tribunal noted that the assessee was not given sufficient opportunity to be heard and could not plead their case before the CIT(A), which violated the principle of natural justice. Therefore, the Tribunal set aside the CIT(A)'s order and restored the matters back for de novo adjudication.

The Tribunal noted that the assessee was not given sufficient opportunity to be heard and could not plead their case before the CIT(A), which violated the principle of natural justice. Therefore, the Tribunal set aside the CIT(A)'s order and restored the matters back for de novo adjudication.

The Tribunal held that the reasons for reopening the assessment were based on suspicion and lacked tangible material, making the reassessment proceedings invalid. Following a similar ITAT judgment, the reassessment was quashed.

The Tribunal condoned the delay in filing the appeal due to the assessee's tax consultant's negligence. On merits, it was held that while the entire deposit could not be treated as unexplained income, a 10% profit element on the sustained addition by the CIT(A) was to be taxed at normal rates, not under Section 115BBE.

The Tribunal quashed the revision order of the Principal CIT dated March 23, 2017, holding it to be ab initio void. The Tribunal found that the Assessing Officer had adopted a permissible course of action in law. Even if this resulted in a loss to the revenue, the decision of the AO could not be treated as erroneous and prejudicial to the interest of the revenue, as held by the Hon'ble Supreme Court in Malabar Industries Ltd. vs. CIT. The Tribunal noted that the assessee had submitted voluminous documents and explanations to the PCIT, but the PCIT had not provided specific reasons in the Section 263 order for holding the assessment order as erroneous and prejudicial. The Tribunal relied on various High Court decisions, including CIT vs. Ganpat Ram, Bishnoi and CIT vs. Vikas Polymers, which state that the PCIT must undertake minimal inquiry and provide proper reasons. The Tribunal concluded that the usurpation of jurisdiction by the Principal CIT under Section 263 was null in the eyes of law. Since the issue was adjudicated on merit, the arguments on technical grounds by the assessee were rendered academic. No issue was expressly left undecided.

The Tribunal noted that the assessee was not given sufficient opportunity to be heard and could not plead their case before the CIT(A), which violated the principle of natural justice. Therefore, the Tribunal set aside the CIT(A)'s order and restored the matters back for de novo adjudication.

The Tribunal noted that the Chief Commissioner of Income Tax had granted condonation of delay in filing the return. Since the delay was condoned and the issue of late filing was resolved, the disallowance of deduction under Section 80P based on the late filing was no longer tenable.

The Tribunal noted that the AO did not specifically identify defects in the evidence provided by the assessee nor declared the evidence as bogus. Although the source of the unsecured loan was explained, the summons to creditors were unserved. Therefore, to meet the ends of justice and safeguard revenue, the Tribunal directed the AO to make an addition at the rate of 10% of the unsecured loan amount, considering it as income.

The Tribunal held that the appeals were barred by limitation and, in the absence of a sufficient cause or a petition for condonation of delay, the delay could not be condoned. Consequently, the appeals were dismissed.

The Tribunal held that interest under Section 28 of the Land Acquisition Act, 1894, partakes the character of compensation and is not taxable as 'interest' under the Income Tax Act. Therefore, the addition made by the Assessing Officer was deleted.

The Tribunal noted that the issue was squarely covered by a previous decision of a co-ordinate bench in the assessee's own case. In that prior order, the Tribunal had observed that if the entity does not exist in the eyes of law, then penalty proceedings under Sections 271(1)(b) and 271F of the Act do not survive, and the initial action of the revenue, if not in consonance with law, leads to subsequent proceedings falling through. Applying the legal maxim 'Sublato fundamento cadit opus' (foundation being removed, structure falls), the Tribunal held that the penalty imposed on account of non-compliance with notices was unsustainable. Consequently, all grounds of appeal were restored back to the file of the Assessing Officer for fresh adjudication after verifying whether the assessee existed at the relevant time. If the assessee was found to be non-existent, appropriate relief was to be granted. The present appeals were allowed for statistical purposes on the same terms.

The Tribunal held that the appeals were barred by limitation and, in the absence of a sufficient cause or a petition for condonation of delay, the delay could not be condoned. Consequently, the appeals were dismissed.