ITAT Rajkot Judgments — October 2026

The Tribunal held that the Assessing Officer was not justified in treating the entire cash deposits of Rs. 68,44,230/- as unexplained money under Section 69A, as the assessee had opted for presumptive taxation under Section 44AD and offered income at the presumptive rate. The failure to maintain regular books of account, by itself, does not establish that the entire deposit represents unexplained money. Therefore, the addition of Rs. 68,44,230/- was deleted. Regarding the addition of Rs. 1,57,118/-, the Tribunal accepted the assessee's explanation that it represented maturity proceeds of an insurance policy, and in the absence of any material from the Revenue to controvert this, the addition was deleted. Similarly, the disallowance of Rs. 59,500/- under Chapter VI-A, which comprised tuition fees and interest on savings bank deposits, was also directed to be deleted as the claim was explained by the assessee. Consequently, all additions and disallowances sustained by the CIT(A) were deleted, and the assessee's appeal was allowed.

The Tribunal held that the assessee was not given a sufficient opportunity of being heard and could not plead their case successfully before the Ld. CIT(A). The Tribunal noted that the Ld. CIT(A) did not discuss the assessee's case on merits based on the material available, which constituted a violation of the principles of natural justice. The Tribunal acknowledged that the assessee had participated in the appellate proceedings and sought adjournment, but this was not allowed. Citing the settled law that principles of natural justice and fair play require sufficient opportunity of being heard, the Tribunal, without delving into the merits, restored the matter back to the file of the assessing officer for de novo adjudication. The AO was directed to pass a speaking order after affording sufficient opportunity of being heard to the assessee, who was also directed to contest their stand forthwith and was at liberty to let in further evidence. The order of the Ld. CIT(A) was set aside and the matter was remitted back to the AO for adjudication afresh on merits. The appeal was allowed for statistical purposes.

The Tribunal condoned the delay of 31 days in filing the appeal, being satisfied with the assessee's explanation. Regarding the substantive issues, the Tribunal noted that the assessee's appeal was dismissed by the Ld. CIT(A) due to non-compliance. Considering the nature of the assessee, the issues involved, and the assessee's request for an opportunity to substantiate its claims with documentary evidence, the Tribunal held that the matter requires fresh adjudication in the interest of justice. Accordingly, the impugned order of the Ld. CIT(A) was set aside, and the matter was restored to the file of the AO for fresh adjudication on merits. The AO was directed to examine the relevant documentary evidence, afford the assessee a reasonable opportunity of being heard, and decide the issues independently without being influenced by any observations made in the order. The assessee was directed to cooperate fully with the AO. The appeal was allowed for statistical purposes.

The Tribunal held that the assessee's claim for Foreign Tax Credit (FTC) should not be denied merely due to the belated filing of Form No. 67, provided the substantive conditions for claiming such credit under the Income-tax Act, 1961, and the applicable Double Taxation Avoidance Agreement (DTAA) are otherwise satisfied. The Tribunal noted that the assessee had disclosed the foreign income and provided documentary evidence of foreign tax payments. Respectfully following the decision of the coordinate Bench of the ITAT, Hyderabad, in Mekala Rakesh Reddy v. DCIT, the Tribunal set aside the orders of the lower authorities. The Assessing Officer was directed to allow the assessee's claim of Rs. 30,12,580/-. No issue was expressly left undecided.

The Tribunal held that the notice issued under Section 148 of the Income-tax Act, 1961, was time-barred. Citing the Supreme Court judgment in Union of India v. Rajeev Bansal and the Gujarat High Court decision in Dhanraj Govindram Kella v. ITO, the Tribunal noted that the notice under Section 148 was issued on July 30, 2022, which was beyond the 'surviving time' available for reassessment proceedings. The Court in Rajeev Bansal clarified that the period from the issuance of old regime notices until the supply of information and the period granted for reply must be excluded, and the remaining time limit for issuing the new regime notice must be adhered to. The Tribunal found that for the Assessment Year 2017-18, the last date for issuing the notice under Section 148, considering the surviving time, was June 18, 2022. Since the notice was issued after this date, it was invalid. Consequently, the reassessment proceedings initiated by the AO were quashed as bad in law. As the reassessment itself was quashed, all other issues concerning the additions, penalty, and interest were rendered academic and infructuous.

The Tribunal held that the reassessment proceedings were not sustainable in law. The primary issue was the validity of the reopening based on the factual premise that the entire Rs. 1,72,90,000 was deposited during the demonetisation period, whereas only Rs. 10,10,000 was deposited during that specific period, and the aggregate amount related to the entire financial year. The Tribunal found merit in the assessee's contention that this discrepancy went to the foundation of the reasons recorded for reopening. Since the reassessment proceedings were initiated on an erroneous factual premise, they could not be sustained. Consequently, the addition of Rs. 1,72,90,000 under Section 68, and the portion thereof sustained by the CIT(A), were directed to be deleted. The assessee's appeal was allowed. The Revenue's appeal, challenging the partial relief granted by the CIT(A), became academic in light of the invalidity of the reassessment proceedings and was therefore dismissed.

The Tribunal allowed the appeal of the assessee. The Tribunal found that the facts of the present case were similar to the decision in Nakul Aggarwal, where the Mumbai Tribunal had allowed the benefit of Section 54F. The Tribunal noted that the assessee had expressed the desire to combine the flats into one unit at the time of booking in August 2016, and the builder's certificate confirmed this intention. Although two agreements were executed due to the builder's plan approval stage, the revised approval plan from MHADA was obtained later. The Tribunal distinguished the case of Rahul Garg, stating that the Delhi Tribunal's decision did not consider whether local authority approval was given for merging two properties into one. The Tribunal concluded that the assessee had the intention to purchase only one flat from the beginning, and the separate agreements were a matter of paper formality. Therefore, the deduction claimed by the assessee under Section 54F should have been allowed by the Assessing Officer. The Tribunal did not decide on the other grounds of appeal raised by the assessee.

The Tribunal first addressed the cross-objection filed by the assessee regarding the applicability of Section 153C instead of Section 148, noting a delay of 290 days. The assessee claimed non-service of the Revenue's appeal memo and delay in receiving Form No. 36. The Tribunal then considered the Revenue's appeal. The primary issue was the deletion of the addition of Rs. 19,05,750/- made by the AO on account of bogus purchases. The Revenue argued that these were sham transactions from paper concerns of the Bhanwarlal Jain group, which provided accommodation entries, and cited the N.K. Industries Ltd. case. The assessee's cross-objection raised a legal ground regarding the AO's proceedings being void due to the applicability of Section 153C and lack of cross-examination. The judgment does not explicitly state the Tribunal's finding on the deletion of addition or the applicability of Section 153C, as the provided text cuts off before the decision is fully articulated. However, the structure indicates these were the core points for adjudication.

The Tribunal held that the CIT(A)'s admission of additional evidence without obtaining a remand report from the Assessing Officer was not sustainable. The Tribunal reasoned that the documents, including the reconciliation of receipts, required proper examination and verification by the AO. The mere availability of information in departmental records does not absolve the necessity of giving the AO an opportunity to verify additional evidence and submit a remand report. To uphold principles of natural justice, the matter was set aside and restored to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to obtain a remand report from the AO after allowing the assessee an opportunity to present the additional evidence, and then decide the issue afresh after providing a reasonable opportunity of hearing to both parties. The appeal was allowed for statistical purposes.

The Tribunal held that the reopening of assessment under section 147 was not sustainable. The Assessing Officer primarily relied on information from the DDIT (Investigation) regarding alleged transactions without demonstrating any independent inquiry to establish the assessee's actual receipt of amounts or the applicability of section 2(22)(e). The Tribunal noted that information regarding group company transactions, without further examination of the assessee's role and statutory conditions, cannot automatically lead to the conclusion of escaped income. Citing *Assistant Commissioner of Income-tax v. Dhariya Construction Co. (supra)*, the Tribunal found that the AO had not demonstrated the requisite independent application of mind to establish a prima facie nexus between the information received and the alleged escapement of taxable income. Consequently, the reassessment proceedings were held to be invalid, and the reassessment order, along with the CIT(A)'s order sustaining it, was quashed. The remaining grounds challenging the additions on merits were rendered academic and left undecided.

The Tribunal held that the Ld. CIT(A) erred in rejecting the assessee's claim for deduction under Section 80P solely on the ground that it was omitted from the return filed in response to notice under Section 148. The Tribunal noted that the assessee had claimed the deduction in its original return and had reiterated its claim through a written submission during the reassessment proceedings, as acknowledged by the AO. Therefore, the claim was not raised for the first time during reassessment. The Tribunal found the assessee's explanation of inadvertent omission to be supported by the circumstances. Consequently, the Tribunal set aside the order of the Ld. CIT(A) and restored the matter to the file of the Ld. AO for fresh adjudication. The AO was directed to examine the claim on merits, considering the original return and the written submission, and not reject it merely due to the omission in the revised return. The eligibility and quantum of deduction were to be verified in accordance with law. This ground was allowed for statistical purposes.

The Tribunal held that the notice under Section 148 of the Income Tax Act, 1961, was barred by limitation. The alleged escaped income of Rs. 12,35,500/- falls below the statutory threshold of Rs. 50 lakhs prescribed under Section 149(1)(b). The notice under Section 148 was issued on 22.03.2023 for AY 2016-17, which is more than five years after the end of the assessment year. For reopening beyond three years, Section 149(1)(b) requires that the income chargeable to tax, represented in the form of an asset, expenditure, or an entry in the books of account, which has escaped assessment, amounts to or is likely to amount to Rs. 50 lakhs or more. This condition was not satisfied in the present case, as the escaped income was only Rs. 12,35,500/-. Therefore, the notice under Section 148 was quashed as being barred by limitation. Consequently, the reassessment proceedings were quashed, rendering all other issues on merits academic and infructuous. The Tribunal relied on decisions from the Calcutta High Court in Ekaksh Commerce Pvt Ltd Vs ITO and the Bombay High Court in Bhavesh Maganlal Dharod v. ITO. The appeal was allowed on this ground.

The Tribunal held that the Assessing Officer (AO) was not justified in rejecting the books of account under Section 145(3) of the Act. The Tribunal reasoned that a fall in the net profit rate, especially when there was a substantial increase in turnover, is not by itself a defect in the books of account, and the AO had not pointed out any false, unvouched, incomplete, or incorrect entries. Regarding the variation in rates, the Tribunal noted that the assessee had provided explanations and details of earlier bookings, and the AO's observations about small advance payments or uncharged interest did not establish receipt of consideration outside the books. The Tribunal also found that the registration date of the agreement was not a reliable indicator of the price fixing date, and the AO lacked evidence of cash receipts. Furthermore, the Tribunal found the quantification of the addition unsustainable, as the AO applied a uniform highest rate without material to support it, and the CIT(A)'s reduction was also arbitrary. Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition.

The Tribunal considered the assessee's submissions and the facts. It was of the considered view that the matter deserved to be decided on merits in the interest of substantial justice. Accordingly, the Tribunal condoned the delay in filing the appeals before the CIT(A). Since the CIT(A) had dismissed the appeals in limine without adjudicating the issues on merits, the Tribunal restored the matters to the file of the CIT(A) for de-novo adjudication. The CIT(A) was directed to adjudicate the grounds raised by the assessee on merits after providing a reasonable opportunity of being heard. The assessee was also directed to furnish all relevant documents and evidence, including bank statements and confirmations, to explain the nature and source of the deposits. The appeals were allowed for statistical purposes.

The Tribunal considered the assessee's submissions and the facts. It was of the considered view that the matter deserved to be decided on merits in the interest of substantial justice. Accordingly, the Tribunal condoned the delay in filing the appeals before the CIT(A). Since the CIT(A) had dismissed the appeals in limine without adjudicating the issues on merits, the Tribunal restored the matters to the file of the CIT(A) for de-novo adjudication. The CIT(A) was directed to adjudicate the grounds raised by the assessee on merits after providing a reasonable opportunity of being heard. The assessee was also directed to furnish all relevant documents and evidence, including bank statements and confirmations, to explain the nature and source of the deposits. The appeals were allowed for statistical purposes.

The Tribunal considered the assessee's submissions and the facts. It was of the considered view that the matter deserved to be decided on merits in the interest of substantial justice. Accordingly, the Tribunal condoned the delay in filing the appeals before the CIT(A). Since the CIT(A) had dismissed the appeals in limine without adjudicating the issues on merits, the Tribunal restored the matters to the file of the CIT(A) for de-novo adjudication. The CIT(A) was directed to adjudicate the grounds raised by the assessee on merits after providing a reasonable opportunity of being heard. The assessee was also directed to furnish all relevant documents and evidence, including bank statements and confirmations, to explain the nature and source of the deposits. The appeals were allowed for statistical purposes.

The Tribunal held that the Assessing Officer was not justified in making the impugned addition merely on the basis of the VAT return. The Tribunal noted that once the assessee produces contemporaneous books, ledgers, balance sheets, income tax returns, and other supporting material, the AO is required to examine that evidence objectively. The AO cannot reject it simply because a collateral record, like the VAT return, does not contain the particulars of plant and machinery. The Tribunal observed that if the plant and machinery was recorded in the books with an opening balance of Rs. 80,18,110/-, its source had already been accounted for or accepted in earlier years. Therefore, the AO could not treat the opening balance as an unexplained investment of the current assessment year without establishing that the investment was actually made during the year under consideration. The absence of machinery in a VAT return does not disprove its existence or establish that the investment is unexplained. The assessee had produced sufficient documentary evidence, and the AO had not pointed out any specific defect or brought any contrary evidence on record. Accordingly, the addition of Rs. 24,01,400/- was deleted. The appeal was allowed.

The Tribunal condoned the delay of 430 days in filing the appeal, finding mitigating circumstances in the assessee's affidavit and exercising discretion in favour of the assessee. Regarding the addition, the Tribunal acknowledged that the assessee is an agriculturist and had submitted evidence of agricultural income. The AO admitted regular withdrawals and deposits of cash from the bank for agricultural purposes out of agricultural income. However, the Tribunal noted that the AO did not conduct sufficient inquiry before rejecting the assessee's submissions and evidence, merely brushing them aside. While finding merit in the assessee's contention that the evidence could not be summarily rejected, the Tribunal also observed that some documents were self-serving and not entirely reliable. To protect the revenue's interest and considering the smallness of the amount, the Tribunal directed an ad-hoc estimated addition. The Tribunal held that the ends of justice would be met by adopting a net profit rate of 10% on the total addition of Rs. 11,65,540/-, amounting to Rs. 1,16,554/-. This estimated addition would account for inconsistencies in the evidence. The AO was directed to make this addition, not under Section 115BBE. The Tribunal clarified that this adjudication would not serve as a precedent due to the small amount involved.

The Tribunal held that the notice issued under section 148 of the Income-tax Act, 1961, was beyond the time allowed, citing the Supreme Court's decision in Union of India v. Rajeev Bansal (2024) and Deepak Steel and Power Ltd. (2025). The revenue conceded that for AY 2015-16, all notices issued on or after April 1, 2021, would have to be dropped as they would not fall for completion during the period prescribed under TOLA. The Tribunal also noted the jurisdictional High Court of Gujarat's decision in Sorathia Mahesh Veljibhai HUF (2025) which followed the Rajeev Bansal judgment. Consequently, the notice under section 148 was quashed as time-barred, rendering the consequent assessment order under section 147 invalid. All other issues on merits were rendered academic and infructuous. The appeal filed by the assessee was allowed.

The Tribunal considered the assessee's submissions and the facts. It was of the considered view that the matter deserved to be decided on merits in the interest of substantial justice. Accordingly, the Tribunal condoned the delay in filing the appeals before the CIT(A). Since the CIT(A) had dismissed the appeals in limine without adjudicating the issues on merits, the Tribunal restored the matters to the file of the CIT(A) for de-novo adjudication. The CIT(A) was directed to adjudicate the grounds raised by the assessee on merits after providing a reasonable opportunity of being heard. The assessee was also directed to furnish all relevant documents and evidence, including bank statements and confirmations, to explain the nature and source of the deposits. The appeals were allowed for statistical purposes.

The Tribunal held that for invoking jurisdiction under section 263, the assessment order must be erroneous and prejudicial to the revenue. The PCIT identified issues regarding the disallowance of capital expenditure of Rs. 4,611.27 lakhs related to land impairment. While the assessee contended it was an actual write-off, not a provision, and cited judicial precedents supporting this distinction for section 115JB(2)(i), the Tribunal noted that the mere nomenclature or debit to the P&L account was insufficient. It was necessary to examine the actual entries, the basis of impairment computation, supporting material, and valuation methodology. The Tribunal found that the assessment order could be considered erroneous and prejudicial to the revenue on the issues identified by the PCIT. Therefore, the assumption of jurisdiction under section 263 was sustainable, and the impugned order of the PCIT was affirmed. The appeal was dismissed.

The Tribunal held that the additional grounds raised by the assessees, pertaining to the validity of the approval under Section 151, go to the root of the matter. It was noted that all facts relating to these legal grounds were on record and no further inquiry was required. The Tribunal admitted these additional grounds, following the ratio laid down by the Supreme Court in National Thermal Power Company Ltd. vs. CIT. Upon examining the approvals under Section 151 for both assessees, the Tribunal found that they were neither digitally nor manually signed. Relying on the binding precedent of the Coordinate Bench of ITAT Rajkot in M/s. Aditya Plastics, the Tribunal held that the reassessment orders, based on defective approval under Section 151, should be quashed. Consequently, both appeals were allowed.

The Tribunal held that the additional grounds raised by the assessees, pertaining to the validity of the approval under Section 151, go to the root of the matter. It was noted that all facts relating to these legal grounds were on record and no further inquiry was required. The Tribunal admitted these additional grounds, following the ratio laid down by the Supreme Court in National Thermal Power Company Ltd. vs. CIT. Upon examining the approvals under Section 151 for both assessees, the Tribunal found that they were neither digitally nor manually signed. Relying on the binding precedent of the Coordinate Bench of ITAT Rajkot in M/s. Aditya Plastics, the Tribunal held that the reassessment orders, based on defective approval under Section 151, should be quashed. Consequently, both appeals were allowed.

The Tribunal held that the PCIT was justified in invoking Section 263 of the Income Tax Act, 1961. It was undisputed that the assessee purchased an immovable property for Rs.7,65,765/-, while the stamp duty value was Rs.38,50,000/-. This difference of Rs.30,84,235/- was substantially in excess of the threshold under Section 56(2)(vii)(b), necessitating examination. The assessment order dated 10.02.2023 did not reveal any inquiry or verification by the AO regarding this transaction or the applicability of Section 56(2)(vii)(b). The AO failed to make the requisite inquiry and verification on an issue with potential tax implications, thus falling within the ambit of Explanation 2(a) to Section 263(1). The Tribunal rejected the assessee's contention that the PCIT merely substituted his opinion, as there was no material to show the AO had consciously examined the issue. The PCIT's direction to the AO to make necessary inquiries and pass a fresh assessment order was within the scope of Section 263 powers. Therefore, the assessment order was deemed erroneous and prejudicial to the revenue, and the PCIT's order was upheld.

The Tribunal held that the issue was squarely covered in favour of the assessee by the ITAT Rajkot Bench's decision in the case of Nikhil Nitinbhai Bhuptani (supra). The Tribunal noted that in the cited case, the assessee had provided evidence such as the donation receipt, PAN of the political party, recognition of the party by the Election Commission of India, its ITR, confirmation by email, and bank statements corroborating the donation through banking channels. The Tribunal in that precedent had observed that once the assessee establishes the fact of payment and acknowledges receipt, the assessee cannot be faulted for the mere fact that the political party failed to account for the donation received. Since the facts of the present case were similar to the precedent and the revenue could not produce any material to controvert the findings, the addition made by the Assessing Officer was deleted. The appeal of the assessee was allowed.

The Tribunal condoned the 30-day delay in filing the appeal, finding mitigating circumstances based on the assessee's affidavit and the explanation of the advocate's mistake. Regarding the substantive issues, the Tribunal held that the denial of exemption under Section 11 by the CPC solely on account of the delayed uploading of Form 10B could not be sustained. The Tribunal relied on the jurisdictional Gujarat High Court's judgment in Laxmanarayan Dev Shrishan Seva Khendra (167 taxmann.com 548) and the ITAT Rajkot Bench's decision in Suryoday Kelavani & Sanskrutik Mandal, which held that the requirement of furnishing the audit report along with the return is procedural and directory, and substantial compliance is sufficient. The benefit of exemption should not be denied for a delay in furnishing the audit report, especially when it is subsequently produced. Consequently, the Tribunal set aside the order of the Ld. CIT(A) and remitted the issue back to the file of the jurisdictional Assessing Officer to verify Form 10B and adjudicate the claim of exemption under Sections 11 and 12 in accordance with law. The issue of condonation of delay in filing Form 10B was implicitly addressed by remanding the matter for verification. The Tribunal did not expressly decide on the specific amounts of deductions claimed under Section 11 and 11(1A) but directed the AO to examine them.

The Tribunal held that the issue was squarely covered in favour of the assessee by the decision of the ITAT Rajkot Bench in the case of Nikhil Nitinbhai Bhuptani (supra). The Tribunal noted that the facts of the present case were similar to the cited case. In the Nikhil Nitinbhai Bhuptani case, the Tribunal had observed that the assessee had provided evidence of donation to a registered political party through banking channels, including receipts, PAN, and recognition from the Election Commission of India. The Tribunal further held that even if the political party failed to account for the donation in its return, the assessee, as a donor, could not be faulted for denying the deduction. Since the revenue was unable to produce any materials to controvert these findings, the Tribunal respectfully followed the binding precedent and deleted the addition made by the Assessing Officer. The appeal of the assessee was allowed.

The Tribunal held that the issue was squarely covered in favour of the assessee by the ITAT Rajkot Bench's decision in the case of Nikhil Nitinbhai Bhuptani (supra). The Tribunal noted that in the cited case, the assessee had provided evidence of donation to a registered political party through banking channels, including receipts and the party's PAN. The Tribunal observed that even if the political party failed to account for the donation in its return, the donor (assessee) should not be faulted for denying the deduction, provided the payment and receipt were established. Since the facts of the present case were similar to the precedent and the revenue could not produce any material to controvert the findings in the Nikhil Nitinbhai Bhuptani case, the Tribunal respectfully followed the binding precedent. Consequently, the addition made by the Assessing Officer was deleted. The appeal of the assessee was allowed with consequential effect.

The Tribunal held that the issue was squarely covered in favour of the assessee by the ITAT Rajkot Bench's decision in the case of Nikhil Nitinbhai Bhuptani (supra). The Tribunal noted that the facts of the present case were similar to the cited precedent. In the Nikhil Nitinbhai Bhuptani case, the Tribunal had observed that the assessee had provided evidence of donation receipts, the political party's PAN, its registration with the Election Commission of India, its ITR, and confirmation via email. Bank statements corroborated the donation made through banking channels. The Tribunal in that case had held that even if the political party failed to account for the donation in its return, the assessee as a donor could not be faulted for denying the deduction. Therefore, respectfully following the binding precedent, the Tribunal deleted the addition made by the Assessing Officer.

The Tribunal held that the issue was squarely covered in favour of the assessee by the decision of the Coordinate Bench in the case of Shree Avadh Nagarik Sahakari Mandali Ltd. (supra). The Tribunal noted that the Assessing Officer had made sufficient inquiry during the assessment proceedings by issuing a notice under section 142(1) and examining the details, documents, and explanations submitted by the assessee. The AO had taken a plausible view, which was sustainable in law. The Tribunal also referred to various other decisions of Coordinate Benches of ITAT and other High Courts that upheld the view that interest received from Co-operative Banks is allowable deduction under section 80P(2)(d) of the Act. The Tribunal found that the judgment of the Hon'ble Supreme Court in the case of Tatgars Society Ltd. (supra) did not apply as it was in the context of Section 80P(2)(a)(i). The Tribunal concluded that the order of the Assessing Officer was not erroneous or prejudicial to the interest of the revenue, and therefore, the revisional jurisdiction invoked by the Principal CIT under section 263 was quashed. Consequently, the addition made by the Assessing Officer was deleted. The appeal filed by the assessee was allowed.

The Tribunal held that the additions made by the Assessing Officer were not sustainable. The primary basis for the additions was an excel sheet found during a search of the RK Group, which was considered 'dump documents' by the Tribunal. The Tribunal noted that this excel sheet was neither signed by the assessee nor by the seller, and there was no corroborative material to substantiate it. The Tribunal relied on the decision of the jurisdictional Gujarat High Court in PCIT vs. Kaushik Nanubhai Majithia (R/Tax Appeal No. 20 of 2024), which held that proceedings initiated based on an excel sheet found from a third party, without signature and corroborative material, are vitiated. The Tribunal also referred to a coordinate bench decision in M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd. which followed the Gujarat High Court's ruling. Since the issue was squarely covered in favour of the assessee, the additions were deleted. As the appeals were allowed on merits, the technical issues raised by the assessee regarding reassessment proceedings were rendered academic and infructuous. The Tribunal deleted the addition and allowed both appeals.

The Tribunal held that the additions made by the Assessing Officer were not sustainable. The primary basis for the additions was an excel sheet found during a search of the RK Group, which was considered 'dump documents' by the Tribunal. The Tribunal noted that this excel sheet was neither signed by the assessee nor by the seller, and there was no corroborative material to substantiate it. The Tribunal relied on the decision of the jurisdictional Gujarat High Court in PCIT vs. Kaushik Nanubhai Majithia (R/Tax Appeal No. 20 of 2024), which held that proceedings initiated based on an excel sheet found from a third party, without signature and corroborative material, are vitiated. The Tribunal also referred to a coordinate bench decision in M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd. which followed the Gujarat High Court's ruling. Since the issue was squarely covered in favour of the assessee, the additions were deleted. As the appeals were allowed on merits, the technical issues raised by the assessee regarding reassessment proceedings were rendered academic and infructuous. The Tribunal deleted the addition and allowed both appeals.

The Tribunal held that the notice issued by the Assessing Officer under section 271(1)(c) read with section 274 of the Income-tax Act, 1961, was defective. The Tribunal noted that section 271(1)(c) contains two distinct charges: concealment of particulars of income and furnishing of inaccurate particulars of income. The assessee is entitled to know the precise charge. In this case, the notice did not strike off the inapplicable portion or specify the applicable limb, making it vague and defective. The Tribunal relied on the decisions of the Hon'ble Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory, the Hon'ble Supreme Court's dismissal of SLP in CIT v. SSA's Emerald Meadows, and the Hon'ble Bombay High Court's Full Bench decision in Mohd. Farhan A. Shaikh v. DCIT, which held that failure to strike off the irrelevant limb can vitiate penalty proceedings. Consequently, the Tribunal found that the penalty imposed by the AO and confirmed by the Ld. CIT(A) was unsustainable. The penalty was deleted. The issue regarding the dismissal of the appeal by the Ld. CIT(A) solely on grounds of delay was rendered infructuous by the deletion of the penalty.

The Tribunal held that the NFAC/CIT(A) was correct in allowing the assessee's appeal on a technical ground. The reassessment proceedings were initiated based on an approval granted under Section 149(1)(b) of the Act. However, Section 149(1)(b) applies only when the escaped income is Rs. 50 lakh or more. In this case, the alleged escaped income was Rs. 2,00,000, which clearly fell under Section 149(1)(a). The Tribunal agreed with the assessee and the CIT(A) that invoking the wrong clause for approval indicated a mechanical approval without due application of mind. This defect goes to the root of the jurisdiction, as a valid sanction under Section 151 is a condition precedent for issuing a notice under Section 148. Therefore, the notice under Section 148 was void ab initio, and the reassessment proceedings lacked jurisdiction. The Tribunal found no infirmity in the CIT(A)'s conclusion and confirmed its findings, dismissing the revenue's appeal.

The Tribunal held that the delay of 135 days in filing the appeal before the CIT(A) deserved to be condoned in the interest of substantial justice. The Tribunal reasoned that the assessee should not be denied an opportunity to have the appeal adjudicated on merits solely due to a communication gap between the assessee and their Authorized Representative. Consequently, the delay was condoned. Since the CIT(A) had dismissed the appeal without adjudicating the grounds on merits, the Tribunal set aside the impugned order and restored the matter to the file of the CIT(A) for adjudication on merits, after providing the assessee a reasonable opportunity of being heard. The Tribunal also imposed a cost of Rs. 500/- on the assessee, to be deposited with the Prime Minister's National Relief Fund, with proof of deposit to be furnished to the CIT(A). The issue of penalty sustainability on merits was not decided by the Tribunal.

The Tribunal held that the issue was squarely covered in favour of the assessee by the decision of the ITAT Rajkot Bench in the case of Nikhil Nitinbhai Bhuptani (supra). The Tribunal noted that the facts under consideration were similar to the cited case, and the revenue had not produced any materials to controvert the findings in Nikhil Nitinbhai Bhuptani. In that precedent case, the Tribunal had observed that the assessee had provided evidence of donation to a registered political party through banking channels, including the party's PAN, its registration certificate from the Election Commission of India, its ITR, and confirmation emails. The Tribunal held that once the assessee established the fact of payment and acknowledged receipt, the assessee as a donor cannot be faulted if the political party failed to account for the donation in its return. Therefore, following the binding precedent, the Tribunal deleted the addition made by the assessing officer.

The Tribunal allowed the appeal of the assessee. The primary issue addressed was the validity of the reopening of assessment under Section 147, which was challenged due to a defective approval under Section 151. The Tribunal noted that the approval under Section 151 was neither digitally nor manually signed. Following the coordinate bench's decision in M/s Aditya Plastic (ITA No. 185/Rjt/2024) and the Allahabad High Court's ruling in Vikas Gupta, the Tribunal held that the reassessment proceedings initiated based on a defective approval under Section 151 are bad in law and without jurisdiction. Consequently, the assessment order framed by the AO was quashed. As the reassessment itself was quashed, all other issues concerning the merits of the additions under Section 69 and the applicability of Section 115BBE were rendered academic and infructuous. The ratio decidendi is that a reassessment initiated without a validly obtained approval under Section 151, which requires a signature (digital or manual), is void ab initio.

The Tribunal held that the delay in filing the appeals before the Ld. CIT(A) deserved to be condoned in the interest of justice. The reasons provided by the assessee, including obtaining legal opinions and pursuing alternative remedies under a bona fide belief, were considered convincing and constituted a reasonable and sufficient cause for the delay. The Tribunal condoned the delay in filing the appeals before the Ld. CIT(A). On merits, the Tribunal noted that the Ld. CIT(A) had not considered the BSNL VRS Scheme, which was approved by the Central Government, and adjudicated the appeals without examining it. This was considered a violation of the principle of natural justice. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and remanded the issues back to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence to prove their cases to the satisfaction of the Ld. CIT(A). The appeals were allowed for statistical purposes.

The Tribunal held that the delay in filing the appeals before the Ld. CIT(A) deserved to be condoned in the interest of justice. The reasons provided by the assessee, including obtaining legal opinions and pursuing alternative remedies under a bona fide belief, were considered convincing and constituted a reasonable and sufficient cause for the delay. The Tribunal condoned the delay in filing the appeals before the Ld. CIT(A). On merits, the Tribunal noted that the Ld. CIT(A) had not considered the BSNL VRS Scheme, which was approved by the Central Government, and adjudicated the appeals without examining it. This was considered a violation of the principle of natural justice. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and remanded the issues back to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence to prove their cases to the satisfaction of the Ld. CIT(A). The appeals were allowed for statistical purposes.

The Tribunal held that the delay in filing the appeals before the Ld. CIT(A) deserved to be condoned in the interest of justice. The reasons provided by the assessee, including obtaining legal opinions and pursuing alternative remedies under a bona fide belief, were considered convincing and constituted a reasonable and sufficient cause for the delay. The Tribunal condoned the delay in filing the appeals before the Ld. CIT(A). On merits, the Tribunal noted that the Ld. CIT(A) had not considered the BSNL VRS Scheme, which was approved by the Central Government, and adjudicated the appeals without examining it. This was considered a violation of the principle of natural justice. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and remanded the issues back to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence to prove their cases to the satisfaction of the Ld. CIT(A). The appeals were allowed for statistical purposes.

The Tribunal held that the delay in filing the appeals before the Ld. CIT(A) deserved to be condoned in the interest of justice. The reasons provided by the assessee, including obtaining legal opinions and pursuing alternative remedies under a bona fide belief, were considered convincing and constituted a reasonable and sufficient cause for the delay. The Tribunal condoned the delay in filing the appeals before the Ld. CIT(A). On merits, the Tribunal noted that the Ld. CIT(A) had not considered the BSNL VRS Scheme, which was approved by the Central Government, and adjudicated the appeals without examining it. This was considered a violation of the principle of natural justice. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and remanded the issues back to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence to prove their cases to the satisfaction of the Ld. CIT(A). The appeals were allowed for statistical purposes.

The Tribunal held that the delay in filing the appeals before the Ld. CIT(A) deserved to be condoned in the interest of justice. The reasons provided by the assessee, including obtaining legal opinions and pursuing alternative remedies under a bona fide belief, were considered convincing and constituted a reasonable and sufficient cause for the delay. The Tribunal condoned the delay in filing the appeals before the Ld. CIT(A). On merits, the Tribunal noted that the Ld. CIT(A) had not considered the BSNL VRS Scheme, which was approved by the Central Government, and adjudicated the appeals without examining it. This was considered a violation of the principle of natural justice. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and remanded the issues back to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence to prove their cases to the satisfaction of the Ld. CIT(A). The appeals were allowed for statistical purposes.

The Tribunal held that the delay in filing the appeals before the Ld. CIT(A) deserved to be condoned in the interest of justice. The reasons provided by the assessee, including obtaining legal opinions and pursuing alternative remedies under a bona fide belief, were considered convincing and constituted a reasonable and sufficient cause for the delay. The Tribunal condoned the delay in filing the appeals before the Ld. CIT(A). On merits, the Tribunal noted that the Ld. CIT(A) had not considered the BSNL VRS Scheme, which was approved by the Central Government, and adjudicated the appeals without examining it. This was considered a violation of the principle of natural justice. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and remanded the issues back to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence to prove their cases to the satisfaction of the Ld. CIT(A). The appeals were allowed for statistical purposes.

The Tribunal held that the delay in filing the appeals before the Ld. CIT(A) deserved to be condoned in the interest of justice. The reasons provided by the assessee, including obtaining legal opinions and pursuing alternative remedies under a bona fide belief, were considered convincing and constituted a reasonable and sufficient cause for the delay. The Tribunal condoned the delay in filing the appeals before the Ld. CIT(A). On merits, the Tribunal noted that the Ld. CIT(A) had not considered the BSNL VRS Scheme, which was approved by the Central Government, and adjudicated the appeals without examining it. This was considered a violation of the principle of natural justice. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and remanded the issues back to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence to prove their cases to the satisfaction of the Ld. CIT(A). The appeals were allowed for statistical purposes.

The Tribunal allowed the assessee's appeal. The Tribunal noted that during AY 2017-18, expenses amounting to Rs. 38,27,130/- were incurred, on which TDS of Rs. 93,719/- was deducted but not paid by the due date under Section 139(1). Consequently, 30% of the amount paid or credited on which TDS was not paid was disallowed in AY 2017-18. The Tribunal observed that this TDS was paid on 21.03.2018 and 22.03.2018, which falls within FY 2017-18. As per the proviso to Section 40(a)(ia), 30% of such disallowed expenses are allowed as a deduction in the year in which the TDS is deposited. Therefore, the disallowance of Rs. 10,48,139/- made in AY 2017-18 should be allowed as a deduction in AY 2018-19. The Tribunal relied on the decision in Termo Penpol Ltd. v. ACIT (59 taxmann.com 90) (Cochin Trib.) which held that deduction should be allowed in the year tax is actually paid. The Tribunal directed the AO to allow the claim.

The Tribunal allowed the assessee's appeal and deleted the addition of Rs. 7,00,000/-. The Tribunal noted that the issue was squarely covered by the decision of a Coordinate Bench in the case of M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd. (supra), which was also supported by the jurisdictional High Court of Gujarat in PCIT vs. Kaushik Nanubhai Majithia. The reasoning was that additions should not be made based solely on an excel sheet found from a third party's premises, especially when it is unsigned by the assessee or the seller, and when no opportunity for cross-examination of the third party was provided. The Tribunal emphasized that such additions, made without providing an opportunity for cross-examination, violate the principles of natural justice. The seized documents lacked a nexus with the assessee, and there was no corroborative evidence to substantiate the AO's findings. The Tribunal respectfully followed the binding decision of the Coordinate Bench and the High Court, finding no reason to interfere. The issue regarding the initiation of action under section 148 was implicitly decided in favour of the assessee by allowing the appeal on the substantive addition.

The Tribunal noted that the issue was similar to a previous decision in Nitaben Kirtikumar Parekh v. ITO, ITA No. 506/Rjt/2026, where a similar addition was partly allowed by restricting it to 10% of the disclosed income. Following this precedent and considering the similarity of facts, the Tribunal decided to restrict the addition to 10% of Rs. 3,98,000/-, amounting to Rs. 39,800/-. The Tribunal further directed that this restricted addition should be taxed under the normal provisions of the Act, not under Section 115BBE. The grounds raised by the assessee were partly allowed.

The Tribunal acknowledged that some documents and evidences filed by the assessee before the AO were self-serving and could not be relied upon entirely. However, considering the smallness of the disputed amount and finding some merit in the assessee's contention for relief, the Tribunal decided against granting complete relief. To protect the interest of the revenue and address inconsistencies in the documents, the Tribunal directed an ad hoc estimated addition. The Tribunal held that a net profit rate of 10% on the disputed amount of Rs. 30,100, amounting to Rs. 3,010, should be adopted. This amount was to be added to the assessee's income at the normal rate of income tax, not under Section 115BBE. The Tribunal explicitly stated that this adjudication would not serve as a precedent for any other assessment year.

The Tribunal noted that the issue is squarely covered by a previous decision of the ITAT Rajkot Bench in the case of Bhimji Bhikhabhai Tukadiya. The Tribunal observed that the ex-gratia amount received by BSNL employees under the VRS Scheme, 2019, which was approved by the Central Government, is considered retrenchment compensation and is eligible for exemption under section 10(10B) of the Act. The Tribunal found that the CIT(A) had not properly considered the BSNL Scheme and had dismissed the appeals without examining it, violating the principles of natural justice. Therefore, the Tribunal condoned the significant delays in filing the appeals before the CIT(A) (1860 days and 1553 days respectively) and restored the appeals to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to consider the BSNL Scheme and the case laws cited by the assessees. The appeals were allowed for statistical purposes.

The Tribunal noted that the issue is squarely covered by a previous decision of the ITAT Rajkot Bench in the case of Bhimji Bhikhabhai Tukadiya. The Tribunal observed that the ex-gratia amount received by BSNL employees under the VRS Scheme, 2019, which was approved by the Central Government, is considered retrenchment compensation and is eligible for exemption under section 10(10B) of the Act. The Tribunal found that the CIT(A) had not properly considered the BSNL Scheme and had dismissed the appeals without examining it, violating the principles of natural justice. Therefore, the Tribunal condoned the significant delays in filing the appeals before the CIT(A) (1860 days and 1553 days respectively) and restored the appeals to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to consider the BSNL Scheme and the case laws cited by the assessees. The appeals were allowed for statistical purposes.