ITAT Rajkot Judgments — October 2026

The Tribunal acknowledged that some documents and evidence presented by the assessee were self-serving and not entirely reliable. However, considering the smallness of the disputed amount and to protect the revenue's interest, the Tribunal found merit in the assessee's contention for some relief. The Tribunal decided that an ad hoc, estimated addition was appropriate. It held that a net profit rate of 10% on Rs. 1,00,000/-, amounting to Rs. 10,000/-, would adequately address the inconsistencies in the documents. The AO was directed to make an addition of Rs. 10,000/- at the normal rate of income tax, not under Section 115BBE. The Tribunal explicitly stated that this adjudication, made considering the small amount, should not be treated as a precedent for any other assessment year. The issue regarding the initiation of action under Section 148 was not expressly decided but implicitly accepted by proceeding with the appeal on merits.

The Tribunal allowed the appeal of the assessee and deleted the addition of Rs. 15,00,000/-. The Tribunal noted that the issue was squarely covered in favour of the assessee by the decision of a Coordinate Bench in the case of M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd. (ITA Nos. 941/RJT/2024). The reasoning was that additions should not be made based on an excel sheet found from a third party's premises, which was neither signed by the purchaser nor the seller, and where the assessee's name was not reflected. The Tribunal emphasized that an opportunity for cross-examination of the third party was mandatory to verify the veracity of such documents. Reliance was placed on the judgments of the Hon'ble Supreme Court in Krishnachand Chelaram Vs. CIT and Andaman Timber Industries Vs. Commissioner of Central Excise, and the Hon'ble Gujarat High Court in PCIT vs. Kaushik Nanubhai Majithia (R/Tax Appeal No. 20 of 2024). The Tribunal found no change in facts and law and no material from the Revenue to controvert the coordinate bench's findings. Therefore, the addition was deleted on the grounds of violation of natural justice and lack of corroborative evidence.

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.

The Tribunal noted that the issue was similar to the one decided in Nitaben Kirtikumar Parekh v. ITO, ITA No. 506/Rjt/2026, where the Tribunal had partly allowed the appeal by restricting the addition to 10% of the disclosed income. The Ld. AR for the assessee also submitted that the issue was covered by the said decision. Respectfully following the precedent and considering the similarity of facts, the Tribunal decided to restrict the addition to 10% of Rs. 4,08,400/-. The addition was therefore restricted to Rs. 40,840/-. The Tribunal further directed that this restricted addition shall be taxed under the normal provisions of the Act. The grounds raised by the assessee were partly allowed.

The Tribunal held that the assessee had not been given a sufficient opportunity of being heard and could not plead his case successfully before the CIT(A). The Tribunal noted that the CIT(A) himself admitted that the assessee could not file the details and documents on merit. Citing the settled law that principles of natural justice and fair play require that the affected party is granted a sufficient opportunity of being heard to contest their case, the Tribunal decided not to delve into the merits of the case. In the interest of justice, the Tribunal set aside the order of the CIT(A) and remitted the matter back to the file of the CIT(A) for de novo adjudication. The CIT(A) was directed to pass a speaking order after affording a sufficient opportunity of being heard to the assessee. The assessee was also directed to contest his stand forthwith. For statistical purposes, the appeal of the assessee was treated as allowed.

The Tribunal held that the assessment was carried out under section 144 read with section 144B of the Act, and the impugned order passed by the Ld. CIT(A) was an ex-parte and non-speaking order. The Tribunal noted that the assessee had not been granted a sufficient opportunity of being heard and could not effectively plead its case before the Ld. CIT(A). Citing the settled law that principles of natural justice and fair play mandate granting sufficient opportunity to the affected party to contest their case, the Tribunal decided not to delve into the merits of the grounds raised. In the interest of justice, the matter was restored back to the file of the Assessing Officer for de novo adjudication. The AO was directed to pass a speaking order after affording a sufficient opportunity of being heard to the assessee, who was also directed to contest its stand forthwith. The assessee was granted liberty to adduce relevant evidence before the AO, and the AO was directed to allow adequate opportunity for submissions and then pass a fair and judicious speaking order. The appeal was allowed for statistical purposes.

The Tribunal held that while the identity of the loan creditors (parents) and the fact that transactions were routed through banking channels were accepted by the AO, the documents and evidence submitted by the assessee were self-serving. Therefore, full relief could not be granted. Considering the smallness of the amount and to protect the interest of revenue, an ad-hoc estimated addition was deemed appropriate. The Tribunal directed the AO to make an addition of Rs. 1,00,000/- (10% of Rs. 10,00,000/-) at the normal rate of income tax, not under section 115BBE. This decision was made considering the specific facts and the amount involved and was explicitly stated not to be treated as a precedent. The Tribunal found merit in the assessee's contention for some relief but not entire relief.

The Tribunal held that due to the non-availability of required documents and evidences, both from the assessee and the revenue, the legal issues and additional grounds raised by the assessee require further factual verification. The Tribunal noted that the documents submitted before the Bench were inconsistent and did not match the reasons recorded by the AO, nor did they align with the reasons recorded in the Gujarat High Court judgment in the case of Paras Chandreshbhai Koticha. The Tribunal found merit in the revenue's submission that the assessees allegedly filed documents late, the AO did not have adequate time, and further factual verification was needed for legal and additional grounds. Additionally, the Tribunal observed that the assessees did not get a proper opportunity before the AO, as assessment orders were framed under Section 144 in two cases, referencing the Supreme Court decision in Tin Box Company v. CIT regarding denial of adequate opportunity. Therefore, to protect the assessee's right to natural justice and for proper adjudication, the Tribunal set aside the order of the CIT(A) and remitted the appeals back to the file of the AO for fresh adjudication. The assessee would be at liberty to adduce relevant evidence, and the AO must provide an adequate opportunity of being heard before passing a speaking order.

The Tribunal considered the submissions of both parties. The assessee's Authorized Representative (AR) indicated that the assessee did not wish to proceed with the appeal. The Senior Departmental Representative (Sr. DR) for the revenue did not object to the withdrawal. Consequently, the Tribunal, after hearing both sides and considering the assessee's prayer, dismissed the appeal as withdrawn. The operative direction was to dismiss the appeal. No specific issue was left undecided; the decision was based on the assessee's request for withdrawal.

The Tribunal held that due to the non-availability of required documents and evidences, both from the assessee and the revenue, the legal issues and additional grounds raised by the assessee require further factual verification. The Tribunal noted that the documents submitted before the Bench were inconsistent and did not match the reasons recorded by the AO, nor did they align with the reasons recorded in the Gujarat High Court judgment in the case of Paras Chandreshbhai Koticha. The Tribunal found merit in the revenue's submission that the assessees allegedly filed documents late, the AO did not have adequate time, and further factual verification was needed for legal and additional grounds. Additionally, the Tribunal observed that the assessees did not get a proper opportunity before the AO, as assessment orders were framed under Section 144 in two cases, referencing the Supreme Court decision in Tin Box Company v. CIT regarding denial of adequate opportunity. Therefore, to protect the assessee's right to natural justice and for proper adjudication, the Tribunal set aside the order of the CIT(A) and remitted the appeals back to the file of the AO for fresh adjudication. The assessee would be at liberty to adduce relevant evidence, and the AO must provide an adequate opportunity of being heard before passing a speaking order.

The Tribunal condoned the delay of 580 days in filing the appeal, adopting a liberal and pragmatic approach, citing Supreme Court and Gujarat High Court precedents that emphasize deciding appeals on merits rather than technicalities, especially when the delay is not attributable to mala fide or gross negligence. Regarding the merits, the Tribunal noted that the Valuation Report dated 15.11.2021 was submitted as additional evidence and had not been examined by the CIT(A). Since the valuation report involved factual aspects requiring examination and verification by the Assessing Officer, including the basis and methodology, the Tribunal deemed it appropriate to restore the matter to the file of the CIT(A). This was done to afford a reasonable opportunity to the Revenue to examine and rebut the additional evidence. Consequently, the order of the CIT(A) was set aside, and the matter was remitted back for adjudication afresh on merits. For statistical purposes, the appeal of the assessee was treated as allowed.

The Tribunal held that due to the non-availability of required documents and evidences, both from the assessee and the revenue, the legal issues and additional grounds raised by the assessee require further factual verification. The Tribunal noted that the documents submitted before the Bench were inconsistent and did not match the reasons recorded by the AO, nor did they align with the reasons recorded in the Gujarat High Court judgment in the case of Paras Chandreshbhai Koticha. The Tribunal found merit in the revenue's submission that the assessees allegedly filed documents late, the AO did not have adequate time, and further factual verification was needed for legal and additional grounds. Additionally, the Tribunal observed that the assessees did not get a proper opportunity before the AO, as assessment orders were framed under Section 144 in two cases, referencing the Supreme Court decision in Tin Box Company v. CIT regarding denial of adequate opportunity. Therefore, to protect the assessee's right to natural justice and for proper adjudication, the Tribunal set aside the order of the CIT(A) and remitted the appeals back to the file of the AO for fresh adjudication. The assessee would be at liberty to adduce relevant evidence, and the AO must provide an adequate opportunity of being heard before passing a speaking order.

The Tribunal noted that the Ld. CIT(A) had dismissed the appeals without considering the BSNL Scheme of retirement, which was approved by the Central Government. The Tribunal found this to be a factual error and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal accepted the assessees' prayer for an opportunity to plead their cases before the Ld. CIT(A). The orders of the Ld. CIT(A) were set aside, and the issues were remanded to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence. For statistical purposes, all appeals were allowed.

The Tribunal noted that the Ld. CIT(A) had dismissed the appeals without considering the BSNL Scheme of retirement, which was approved by the Central Government. The Tribunal found this to be a factual error and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal accepted the assessees' prayer for an opportunity to plead their cases before the Ld. CIT(A). The orders of the Ld. CIT(A) were set aside, and the issues were remanded to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence. For statistical purposes, all appeals were allowed.

The Tribunal noted that the Ld. CIT(A) had dismissed the appeals without considering the BSNL Scheme of retirement, which was approved by the Central Government. The Tribunal found this to be a factual error and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal accepted the assessees' prayer for an opportunity to plead their cases before the Ld. CIT(A). The orders of the Ld. CIT(A) were set aside, and the issues were remanded to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence. For statistical purposes, all appeals were allowed.

The Tribunal noted that the Ld. CIT(A) had dismissed the appeals without considering the BSNL Scheme of retirement, which was approved by the Central Government. The Tribunal found this to be a factual error and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal accepted the assessees' prayer for an opportunity to plead their cases before the Ld. CIT(A). The orders of the Ld. CIT(A) were set aside, and the issues were remanded to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence. For statistical purposes, all appeals were allowed.

The Tribunal noted that the Ld. CIT(A) had dismissed the appeals without considering the BSNL Scheme of retirement, which was approved by the Central Government. The Tribunal found this to be a factual error and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal accepted the assessees' prayer for an opportunity to plead their cases before the Ld. CIT(A). The orders of the Ld. CIT(A) were set aside, and the issues were remanded to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence. For statistical purposes, all appeals were allowed.

The Tribunal noted that the Ld. CIT(A) had dismissed the appeals without considering the BSNL Scheme of retirement, which was approved by the Central Government. The Tribunal found this to be a factual error and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal accepted the assessees' prayer for an opportunity to plead their cases before the Ld. CIT(A). The orders of the Ld. CIT(A) were set aside, and the issues were remanded to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence. For statistical purposes, all appeals were allowed.

The Tribunal noted that the Ld. CIT(A) had dismissed the appeals without considering the BSNL Scheme of retirement, which was approved by the Central Government. The Tribunal found this to be a factual error and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal accepted the assessees' prayer for an opportunity to plead their cases before the Ld. CIT(A). The orders of the Ld. CIT(A) were set aside, and the issues were remanded to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence. For statistical purposes, all appeals were allowed.

The Tribunal noted that the Ld. CIT(A) had dismissed the appeals without considering the BSNL Scheme of retirement, which was approved by the Central Government. The Tribunal found this to be a factual error and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal accepted the assessees' prayer for an opportunity to plead their cases before the Ld. CIT(A). The orders of the Ld. CIT(A) were set aside, and the issues were remanded to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence. For statistical purposes, all appeals were allowed.

The Tribunal noted that the assessees' appeals related to retrenchment compensation/retirement schemes of BSNL employees. It observed that the CIT(A) had dismissed the appeals without considering the BSNL Scheme approved by the Central Government. The Tribunal found this to be factually incorrect and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal granted the assessees another opportunity to plead their cases before the CIT(A). The orders of the CIT(A) were set aside, and the issues were remanded to the CIT(A) for fresh consideration. The assessees were given liberty to produce sufficient evidence to the satisfaction of the CIT(A). For statistical purposes, all appeals were allowed.

The Tribunal noted that the assessees' appeals related to retrenchment compensation/retirement schemes of BSNL employees. It observed that the CIT(A) had dismissed the appeals without considering the BSNL Scheme approved by the Central Government. The Tribunal found this to be factually incorrect and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal granted the assessees another opportunity to plead their cases before the CIT(A). The orders of the CIT(A) were set aside, and the issues were remanded to the CIT(A) for fresh consideration. The assessees were given liberty to produce sufficient evidence to the satisfaction of the CIT(A). For statistical purposes, all appeals were allowed.

The Tribunal noted that the assessees' appeals related to retrenchment compensation/retirement schemes of BSNL employees. It observed that the CIT(A) had dismissed the appeals without considering the BSNL Scheme approved by the Central Government. The Tribunal found this to be factually incorrect and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal granted the assessees another opportunity to plead their cases before the CIT(A). The orders of the CIT(A) were set aside, and the issues were remanded to the CIT(A) for fresh consideration. The assessees were given liberty to produce sufficient evidence to the satisfaction of the CIT(A). For statistical purposes, all appeals were allowed.

The Tribunal noted that the assessees' appeals related to retrenchment compensation/retirement schemes of BSNL employees. It observed that the CIT(A) had dismissed the appeals without considering the BSNL Scheme approved by the Central Government. The Tribunal found this to be factually incorrect and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal granted the assessees another opportunity to plead their cases before the CIT(A). The orders of the CIT(A) were set aside, and the issues were remanded to the CIT(A) for fresh consideration. The assessees were given liberty to produce sufficient evidence to the satisfaction of the CIT(A). For statistical purposes, all appeals were allowed.

The Tribunal held that the order passed by the Ld. CIT(A) was an ex-parte and non-speaking order, constituting a violation of the principles of natural justice. The Tribunal noted that the assessee was not given a sufficient opportunity of being heard and could not plead his case successfully. The Ld. CIT(A) had dismissed the appeal on account of a 60-day delay, but the assessee had explained a sufficient cause for this delay, which the Tribunal condoned. The Tribunal also observed that the assessee had sought adjournments to file details and documents, but these were not allowed. Therefore, in the interest of justice, the Tribunal set aside the order of the Ld. CIT(A) and remitted the matter back to the file of the assessing officer for de novo adjudication. The assessing officer was directed to pass a speaking order after affording a sufficient opportunity of being heard to the assessee, who was also directed to contest his stand forthwith and was at liberty to submit further evidence. The appeal was allowed for statistical purposes.

The Tribunal noted that the assessees' appeals related to retrenchment compensation/retirement schemes of BSNL employees. It observed that the CIT(A) had dismissed the appeals without considering the BSNL Scheme approved by the Central Government. The Tribunal found this to be factually incorrect and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal granted the assessees another opportunity to plead their cases before the CIT(A). The orders of the CIT(A) were set aside, and the issues were remanded to the CIT(A) for fresh consideration. The assessees were given liberty to produce sufficient evidence to the satisfaction of the CIT(A). For statistical purposes, all appeals were allowed.

The Tribunal noted that the assessees' appeals related to retrenchment compensation/retirement schemes of BSNL employees. It observed that the CIT(A) had dismissed the appeals without considering the BSNL Scheme approved by the Central Government. The Tribunal found this to be factually incorrect and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal granted the assessees another opportunity to plead their cases before the CIT(A). The orders of the CIT(A) were set aside, and the issues were remanded to the CIT(A) for fresh consideration. The assessees were given liberty to produce sufficient evidence to the satisfaction of the CIT(A). For statistical purposes, all appeals were allowed.

The Tribunal noted that the assessees' appeals related to retrenchment compensation/retirement schemes of BSNL employees. It observed that the CIT(A) had dismissed the appeals without considering the BSNL Scheme approved by the Central Government. The Tribunal found this to be factually incorrect and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal granted the assessees another opportunity to plead their cases before the CIT(A). The orders of the CIT(A) were set aside, and the issues were remanded to the CIT(A) for fresh consideration. The assessees were given liberty to produce sufficient evidence to the satisfaction of the CIT(A). For statistical purposes, all appeals were allowed.

The Tribunal noted that the assessees' appeals related to retrenchment compensation/retirement schemes of BSNL employees. It observed that the CIT(A) had dismissed the appeals without considering the BSNL Scheme approved by the Central Government. The Tribunal found this to be factually incorrect and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal granted the assessees another opportunity to plead their cases before the CIT(A). The orders of the CIT(A) were set aside, and the issues were remanded to the CIT(A) for fresh consideration. The assessees were given liberty to produce sufficient evidence to the satisfaction of the CIT(A). For statistical purposes, all appeals were allowed.

The Tribunal noted that the assessees' appeals related to retrenchment compensation/retirement schemes of BSNL employees. It observed that the CIT(A) had dismissed the appeals without considering the BSNL Scheme approved by the Central Government. The Tribunal found this to be factually incorrect and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal granted the assessees another opportunity to plead their cases before the CIT(A). The orders of the CIT(A) were set aside, and the issues were remanded to the CIT(A) for fresh consideration. The assessees were given liberty to produce sufficient evidence to the satisfaction of the CIT(A). For statistical purposes, all appeals were allowed.

The Tribunal noted that the assessees' appeals related to retrenchment compensation/retirement schemes of BSNL employees. It observed that the CIT(A) had dismissed the appeals without considering the BSNL Scheme approved by the Central Government. The Tribunal found this to be factually incorrect and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal granted the assessees another opportunity to plead their cases before the CIT(A). The orders of the CIT(A) were set aside, and the issues were remanded to the CIT(A) for fresh consideration. The assessees were given liberty to produce sufficient evidence to the satisfaction of the CIT(A). For statistical purposes, all appeals were allowed.

The Tribunal noted that the Ld. CIT(A) had dismissed the appeals without considering the BSNL Scheme of retirement, which was approved by the Central Government. The Tribunal found this to be a factual error and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal accepted the assessees' prayer for an opportunity to plead their cases before the Ld. CIT(A). The orders of the Ld. CIT(A) were set aside, and the issues were remanded to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence. For statistical purposes, all appeals were allowed.

The Tribunal held that the order passed by the Ld. CIT(A) was an ex-parte and non-speaking order, and that the assessee had not been given a sufficient opportunity of being heard, constituting a violation of the principle of natural justice. The Tribunal noted that the Ld. CIT(A) had dismissed the appeal on account of a 60-day delay, but the assessee had explained a sufficient cause for this delay, which the Tribunal condoned. The Tribunal observed that the assessee had sought adjournments before the Ld. CIT(A) to file details and documents, but these were not allowed. Therefore, in the interest of justice, the Tribunal restored the matter back to the file of the AO for de novo adjudication. The AO was directed to pass a speaking order after affording a sufficient opportunity of being heard to the assessee, who was also directed to contest their stand forthwith and was at liberty to submit further evidence. The order of the Ld. CIT(A) was set aside and the matter was remitted back to the AO for adjudication on merits.

The Tribunal noted that the Ld. CIT(A) had dismissed the appeals without considering the BSNL Scheme of retirement, which was approved by the Central Government. The Tribunal found this to be a factual error and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal accepted the assessees' prayer for an opportunity to plead their cases before the Ld. CIT(A). The orders of the Ld. CIT(A) were set aside, and the issues were remanded to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence. For statistical purposes, all appeals were allowed.