ITAT Rajkot Judgments — December 2025

The Tribunal noted that the assessee was not afforded sufficient opportunity of being heard and the Ld. CIT(A) order was ex-parte and non-speaking. It was held that principles of natural justice require a fair opportunity of hearing.

The Tribunal noted that the gift was from the husband to his wife, which falls under the definition of 'relative' as per the Act and is therefore exempt under Section 56(2)(x). The Tribunal also observed that Section 69A of the Act is not applicable to immovable property, but rather to 'money, bullion, jewellery or other valuable article'. The Tribunal found that the assessee had sufficiently discharged the onus of proving the genuineness, source, and creditworthiness of the gift.

The Tribunal noted that the assessee is an agriculturist and provided evidence of land holdings and agricultural activities. While the entire cash deposited could not be treated as income, a profit element embedded in the sale of agricultural production could be added on a presumptive basis. Therefore, the Tribunal directed the AO to make an addition of 10% of the total amount deposited.

The Tribunal found that the reasons recorded by the Assessing Officer for reopening the assessment were factually incorrect and demonstrated a non-application of mind. Specifically, the AO wrongly categorized the assessee as a 'broker' instead of a 'trader' and incorrectly stated that the assessee incurred a loss of Rs. 18,08,568/-, whereas the assessee had earned a profit of the same amount. Consequently, the jurisdictional requirement of having 'reason to believe' for escapement of income was not met, leading to the quashing of the reassessment proceedings.

The Tribunal noted that the assessee provided documentary evidence for agricultural activities and land holdings. While the AO had brushed aside the evidence, the Tribunal found that the assessee's agricultural income and cash deposits were substantial. The Tribunal estimated the net profit at 10% of the disputed amount and directed the AO to tax this amount at the normal rate of income tax, considering it arose from agricultural activities.

The Tribunal noted that the CIT(A)'s order was an ex-parte and non-speaking order, and the issue was not decided as per the mandate of Section 250(6) of the Act. Therefore, one more opportunity was granted to the assessee.

The Tribunal held that the assessee is an agriculturist and derived income solely from agricultural activities. The Assessing Officer should not have made an addition of Rs. 5,00,000/- when a substantial part of the proposed addition was accepted as agricultural income, and no other source of income was established.

The Tribunal held that the Assessing Officer had conducted sufficient inquiry during the assessment stage, which included issuing notices and obtaining documents, confirmations, and explanations. The PCIT's view that the inquiry was inadequate did not make the Assessing Officer's order erroneous. The Tribunal relied on judicial precedents stating that 'lack of inquiry' is distinct from 'inadequate inquiry' and the former is a ground for revision under Section 263, not the latter. The Tribunal also noted that the loans were repaid in subsequent years.

The Tribunal noted that the CIT(A) passed an ex parte and non-speaking order without granting the assessee sufficient opportunity of being heard. Citing principles of natural justice, the Tribunal held that the assessee should be granted a fair opportunity to contest their case.

The Tribunal acknowledged that the assessee had indeed made a data entry error in the ITR, and the actual agricultural income was Rs. 6,39,780. However, considering that some of the provided documents were not entirely reliable and to protect the revenue's interest, the Tribunal directed an ad-hoc addition of 5% of the agricultural income.

The Tribunal found that while the assessee had provided some evidence for the cost of improvement, there were inherent weaknesses. Therefore, a 10% disallowance of the indexed cost of improvement was deemed sufficient to protect the revenue's interest, rather than a full disallowance.

The Tribunal observed that the assessee was not afforded a proper opportunity to explain its case and submit supporting documents for registration under section 12A(1)(ac)(iii). Consequently, the Tribunal remitted the matter back to the Commissioner of Income Tax (Exemption) with directions to grant the assessee a fair and due opportunity to present its case and submit all necessary documents.

The Tribunal condoned the delay in filing the appeal, acknowledging the genuine circumstances presented by the Assessee, particularly the advanced age of its trustees and their unfamiliarity with online communication methods. The Tribunal directed the Assessee to deposit a cost of Rs. 8,000/- to be deposited with the Prime Minister's Relief Fund.

The Tribunal noted that the CIT(A) had issued multiple notices for hearing, but its order was silent on the service of these notices to the assessee. Upholding the principles of natural justice, the Tribunal set aside the CIT(A)'s order and remitted the matter back for fresh adjudication, ensuring the assessee is given due opportunity to present their case.

The Tribunal noted that the delay in filing the appeal was due to the tax consultant's pregnancy, which prevented timely compliance with notices. The Tribunal condoned the delay, considering it a genuine reason and a matter of natural justice. The appeal was set aside and remanded to the assessing officer for fresh adjudication.

The Tribunal observed the appellant's non-compliance with notices from both the AO and CIT(A). Granting an opportunity in the interest of justice, the Tribunal set aside the lower authority's order and remitted the matter back to the AO for fresh adjudication on merit, after depositing a cost of Rs. 2000/- to the Prime Minister Relief Fund.

The Tribunal acknowledged the assessee's repeated non-compliance with notices from both the AO and CIT(A). However, in the interest of justice, it granted the assessee one final opportunity to present its case before the AO. The Tribunal set aside the lower authority's order, remitting the matter back to the AO for fresh adjudication on merits, with a direction for the assessee to deposit Rs. 10,000/- to the Prime Minister Relief Fund as a cost.

The CIT(A) partly deleted the addition by estimating net profit on the undisclosed on-money, but the Tribunal found that the CIT(A) failed to properly address and rebut the detailed findings and corroborative evidence presented by the Assessing Officer. Therefore, the Tribunal remanded the appeals back to the CIT(A) for re-adjudication, with directions to thoroughly examine the AO's findings and reconcile the 'on-money' received from partners and customers in accordance with the law.

The Income Tax Appellate Tribunal (ITAT) observed that the CIT(A) failed to adequately address or rebut the detailed findings and corroborative evidence presented by the Assessing Officer. The ITAT concluded that the CIT(A)'s order was not in accordance with mandatory provisions. Therefore, all appeals from both the assessee and the revenue were allowed for statistical purposes, remanding the matter back to the CIT(A) for fresh adjudication after a thorough examination of the AO's findings and reconciliation of 'on-money' receipts from partners and customers.

The ITAT found that the CIT(A) sustained an estimated addition without thoroughly addressing the detailed findings and corroborative evidence presented by the Assessing Officer in the assessment order. The CIT(A) also failed to properly examine the reconciliation of 'on-money' receipts. Consequently, all appeals by both the assessee and the revenue were remitted back to the CIT(A) for fresh adjudication, with directions to consider the AO's findings and obtain a remand report.

The Tribunal held that the CIT(A)'s reduction of the addition from 100% to 15% was not sustainable as it was based on extrapolated figures provided suo-moto by the assessee and not examined by the AO or the CIT(A) himself. The CIT(A) failed to follow the prescribed procedure, including not giving the AO an opportunity to examine the new figures. The Tribunal set aside the CIT(A)'s order and remitted the matter back for fresh adjudication.

The Income Tax Appellate Tribunal (ITAT) found that the CIT(A) erred by not properly addressing or refuting the AO's detailed findings, corroborative evidence, and statements regarding the 'on-money' transactions. The ITAT concluded that the CIT(A) merely accepted the assessee's submissions without a reasoned analysis of the AO's evidence. Therefore, the ITAT decided to remand all appeals back to the CIT(A) for fresh adjudication after properly considering the AO's findings and obtaining a remand report.

The Tribunal noted that the assessee was given sufficient opportunities but failed to submit necessary documents and evidence, showing non-compliance and negligence in pursuing the case. The Tribunal imposed a cost of Rs. 500/- and remitted the matter back to the AO for fresh adjudication, granting an opportunity to the assessee to present their case.

The Tribunal found that the Ld. CIT(A) erred in accepting the assessee's extrapolated figures and arbitrarily reducing the estimated profit without proper examination by the Assessing Officer or providing adequate justification. It highlighted that the CIT(A)'s method was not based on either accrual or cash accounting systems and ignored the actual 'on-money' figures. Consequently, the Tribunal set aside the CIT(A)'s orders and remanded the matters back for fresh adjudication, directing the CIT(A) to allow the Assessing Officer to examine the submissions and the assessee to provide further evidence.

The Tribunal noted that the assessee's claim of being a trader or commission agent was not properly ascertained by the AO. The AO also did not thoroughly examine the assessee's complete books of account. However, the reopening of assessment was found to be legally valid.

The Tribunal noted that the AO did not properly examine the assessee's status as a trader or commission agent and did not thoroughly scrutinize the books of account. However, the reopening of assessment was deemed valid. The Tribunal found that the assessee deserved an opportunity to provide explanations and supporting documents to the lower authorities.

The Tribunal noted that the assessee had provided various documents to explain the cash deposits, including agricultural income, sale of land, and cash book entries. However, some deficiencies were found in the supporting documents. Therefore, instead of deleting the entire addition, the Tribunal directed a 10% disallowance (Rs. 3,85,700) to account for inconsistencies.

The Tribunal acknowledged the "sufficient cause" for the delay in filing the appeal, citing the assessee's circumstances and relevant legal precedents. The Tribunal condoned the delay and, in the interest of natural justice and fair play, decided to give the assessee another opportunity to present their case.

The Tribunal noted that the CIT(A)'s order was ex-parte and non-speaking, and that the issue was not decided as per the mandate of section 250(6) of the Act. Therefore, the Tribunal decided to give the assessee one more opportunity to present their case.

The Tribunal acknowledged that the assessee was not given sufficient opportunity to be heard and found the CIT(A)'s order to be ex-parte and non-speaking. Upholding natural justice, the tribunal set aside the CIT(A)'s order and remitted the matter back to the Assessing Officer for a de novo assessment, with a direction to grant adequate opportunity to the assessee. A cost of Rs. 5,000/- was imposed on the assessee for their non-compliance, payable within 3 weeks to the Prime Minister Relief Fund.

The ITAT condoned the delay, acknowledging sufficient cause due to the previous CA's mistake. Both the quantum and penalty appeals were remitted back to the Assessing Officer for de novo assessment and fresh adjudication, as the earlier orders were ex-parte and denied the assessee a fair hearing. The Assessing Officer is at liberty to initiate fresh penalty proceedings if required after the de novo assessment.

The Tribunal condoned the significant delay in filing the appeals, citing that the delay was not due to negligence but due to circumstances beyond the assessee's control, including reliance on a tax consultant who failed to communicate crucial information. The Tribunal emphasized that substantial justice should prevail over procedural technicalities.

The Tribunal, considering the assessee's semi-literate status and the circumstances beyond his control that led to the delay, condoned the delay of 3092 days in filing the appeals. The Tribunal noted that the delay was not due to negligence but due to the fault of the tax professional engaged by the assessee.

The Tribunal held that the assessee's cash book, which was not disputed by the AO, showed sufficient cash balance before demonetization. The AO's presumption of cash on hand was incorrect. While the assessee's claim for full relief was not accepted due to non-compliance in submitting documents, a partial addition of 10% of Rs. 29,60,000 was considered justified to meet the ends of justice.

The Tribunal noted that the issue was covered by the Hon'ble Karnataka High Court's judgment in the case of M/s Taxport, which held that after the omission of Section 92BA(i) w.e.f. 01.04.2017, no adjustment could be made on the basis of the omitted provision. Since the TPO's order and assessment order were passed after 01.04.2017, the adjustment made was unsustainable in law. The Tribunal also considered the assessee's adoption of the CUP method and the negligible difference between market price and contract price, which was within the permissible variation band.

The Tribunal noted the assessee's consistent non-compliance and lack of cooperation throughout the proceedings. However, considering the interest of justice and to provide an opportunity for a fair hearing, the Tribunal decided to grant the assessee another chance to present their case.

The Tribunal noted that the substantive addition for the gold from Jiya Gems Pvt Ltd had already been made in the hands of the actual owner, Jiya Gems Pvt Ltd, who had accepted ownership. Therefore, the Tribunal held that a protective addition cannot be sustained in the assessee's hands if the substantive addition for the same gold has been made to the real owner.

The Tribunal found that the reasons for reopening the assessment were erroneous as the transactions were duly recorded in the assessee's books of account. While the source of cash deposit was explained, to safeguard revenue, the Tribunal directed the AO to make an addition of 10% on the cash deposit amount.

The Tribunal found that the AO had, in fact, conducted an inquiry by issuing a notice under section 142(1) and receiving relevant details from the assessee. Crucially, the Tribunal noted that while the aggregate cash payment for salaries was Rs. 5,85,000/-, each individual payment to an employee did not exceed the prescribed limit of Rs. 20,000/- under section 40A(3). Therefore, the PCIT wrongly invoked revisional powers under section 263, and the PCIT's order was quashed.