This yearly digest analyzes all the ITAT stories published in the year 2023 at taxscan.in
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has recently held that Capital gain exemptions under Section 54F of the Income Tax Act, 1961 are beneficial provisions, therefore it should be interpreted liberally. Assessing Officer denied the claim of deduction under Section 54F of the Income Tax Act on the ground that the assessee has not fulfilled the procedural requirement laid down by the law of depositing sale proceeds into the capital gain account scheme with a nationalized bank before the due date of furnishing of return.
Assessee Arya Kshatriya Samaj is a Trust registered under Bombay Public Trust Act, 1951 and the assessee was also duly registered under the provisions of section 12A of the Income Tax Act. The tribunal observed that the provisions of Income Tax Act had not conferred any discretion on the assessing authority or the appellate authority to condone the delay in filing the return of income.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has quashed the revision order holding that the interest awarded under land acquisition act would not be Taxable. The Land Acquisition Collector deducted the tax at source from the interest which was deposited to the account of Central Govt. In the return filed by the assessee the interest was shown as taxable income since the issue regarding taxability of interest of compensation was not settled. The said return was processed under Section 143(1) of the Income Tax Act.
The Jaipur Bench of Income Tax Appellate Tribunal (ITAT) has deleted penalty under Section under Section 271 of the Income Tax Act 1961 holding that once penalty is levied for non-maintenance of books of accounts no further default could be made for not getting the same audited under Section 44AB of the Act. The Division Bench of S. Seethalakshmi, (Judicial Member) and Rathod Kamlesh Jayant bhai, (Accountant Member) allowed the appeal and deleted the penalty observing that, āonce the penalty is levied for non-maintenance of book of accounts, there cannot be further default for not getting the same audited as required u/s 44AB of the Act and therefore, the penalty levied u/s 271B is not justified.ā
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that no disallowance shall be made under Section 40(a)(ia) of the Income Tax Act, 1961 in compliance with the Section 194C (6) of the Income Tax Act. The assessee had filed the TDS return giving the details of payment made transporters on which TDS has not been made. Apart from the same as per provision of Section 194C (6), no tax needed to be deducted at the time of making payments to the transporters, if the transporter furnished his PAN to the person making the payment.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that no Tax Deducted at Source (TDS) shall be applicable on the payment made to oilstone UAE in the absence of Fees for Technical Services (FTS) provision in Indo-UAE DTAA. The Division Bench of Waseem Ahmed, (Accountant Member) and Siddhartha Nautiyal, (Judicial Member) dismissed the appeal filed by the department holding that the payment for designing of towers made to Oilstone UAE was in the nature of FTS and not royalty. āSince the payment do not qualify as FTS under the India UAE Tax Treaty in absence of FTS clause in the said treaty, we are of the considered view, that there was no requirement for the assessee to withhold taxes on such payments made to Oilstone UAE,ā the Bench further observed.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has directed for de novo adjudication finding the statement recorder under Section 133A of the Income Tax Act 1961 without considering the documents and evidence produced. Aggrieved by the assessment order the assessee has preferred an appeal out of the addition made in respect of excess stock found during the survey operation, sustained addition and further sustained addition on account of excess cash found. Aggrieved by the deletion of the addition the Department has filed appeal against sustaining addition the assessee has filed and the grounds mentioned above.
The Ahmedabad Income Tax Appellate Tribunal (ITAT) has recently held that deduction on sale commission is not allowable if genuine expenditure cannot be ascertained. S. N. Soparkar, counsel for the assessee submitted that the assessee has been paying commission for the past many years and which has never been in scrutiny assessment. That is the earlier years the Department accepted the payment of commission to various agents.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has recently while granting relief to Lenovo India held that Comparable Uncontrolled Price (CUP) is the most appropriate method for determining international transactions for the computation of Price Length Index(PLI). The tribunal, while considering the case, observed that CUP is the most appropriate method for determining the ALP of the assessee for the importing of goods for manufacturing.
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) recently observed that the payment has been made voluntarily by them out of appreciation for the employee and thus falls outside the rigours of Section 17(3)(iii) of the Income Tax Act. The Coram comprising R.S. Syal (Vice President) and Partha Sarathi Chaudhury (Judicial Member) observed that the Department could not produce any documents or evidence on record to show that the payment received from the employer was coupled with some legal obligation on the part of the employer to pay the employee.
The Hyderabad bench of the Income Tax Appellate Tribunal (ITAT) has recently held that no penalty should be levied under Section 271B of the Income Tax Act, 1961 if there is reasonable cause for not getting the accounts audited. K.P.R.R. Murthy, counsel for the revenue submitted that the assessee is duty-bound to obtain the Audit Report before the specified date. In the instant case, the assessee obtained its audit report with a delay of 123 days therefore, the CIT(A) was fully justified in sustaining the penalty levied by the Assessing Officer under Section 271B of the Income Tax Act, 1961.
In a recent case, the Delhi Income Tax Appellate Tribunal (ITAT) held that cash paid to sundry creditor on supply of buffalo meat could not be disallowed under Section 40A(3) of the Income Tax Act, 1961 and set aside the assessment order passed by the lower authority. K. Sampath, counsel for the assessee submitted that disallowance is being made on the ground that the payments are being made in cash and higher than Rs.20,000/-. The two member bench of tribunal, observed that disallowance under Section 40A(3) in this case has not been made on the basis of anything found from the assesseeās books. Rather this case has been made out that the suppliers did not maintain books of account and the same could not be traced.
The Jodhpur Bench of the Income Tax Appellate Tribunal (ITAT), refused to quash and stay the operation of order under Section 263 of the Income Tax Act, 1961 by Commissioner of Income Tax (Exemption) (CIT(E)) on revision of erroneous order prejudicial to interests of revenue. The Coram comprising Kul Bharat, Judicial Member and Maneesh Borad, Accountant Member observed that āIn our considered view, any issue which was considered by the AO in the assessment order, such order would be open for revision under Section 263 of the Income Tax Act, if such order is erroneous and prejudicial to the interest of justice. There is no infirmity in the order of CIT(E) in revising the assessment under section 263 of the Act.ā
Income Tax Appellate Tribunal (ITAT) of Hyderabad bench held that Levy of penalty of 100% of the tax sought to be evaded would meet the ends of justice and set aside the order passed by the assessing officer. The CIT(A) upheld the action of the Assessing Officer on the ground that the assessee could not prove that the stock did not pertain to him and that the assessee could not produce any material evidence in this regard. The Tribunal of K. Narasimha Chary, (Judicial Member) and R.K. Panda, (Accountant Member) observed that ālevy of penalty of 100% of the tax sought to be evaded will meet the ends of justiceā.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that Tax Deducted at Source (TDS) available in the year in which Income had been reported should not be deferred to some other assessment year as per Section 199(3) of the Income Tax Act 1961 read with rule 37BA (3). The Division Bench of Anil Chaturvedi, (Accountant Member) and C.M. Garg, (Judicial Member) was unable to see any conclusion or findings by the authorities below to show whether tax credit for TDS reflected in Form No.26AS for relevant assessment years had been claimed or otherwise in that assessment year. Thus, verification and examination of the factual position were required to rule out the possibility of a double claim by the assessee.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the penalty on finding that the issue of defective notice was without striking off the irrelevant limb. The Bench referred to the decision of Bombay High Court (full bench at Goa) in the case of Mohd. Farhan A. Shaikh vs. ACIT quashed the impugned order and deleted the penalty holding that, āIssue of non-strike off of the irrelevant part in the notice issued under Section 271(l)(c) of the Act, held that assessee must be informed of the grounds of the penalty proceedings only through statutory notice and an omnibus notice suffers from the vice of vagueness.ā
The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, has recently, in an appeal filed before it, quashed an order passed u/s 143(3) by the AO, as the same was passed without issuing the mandatory notice u/s 143(2). Finally, the Chandigarh ITAT held that āRespectfully following the proposition of the law laid down in these orders stated above, we hold that the assessment order is bad in law for the reason that the assessing authority passed the order u/s 143(3) of the Act without issuing mandatory notice u/s 143(2) of the Act. Accordingly, the assessment order is, hereby, quashed. In the result, the appeal is allowed.ā
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has recently while upholding the decision of lower authority held that no Tax Deduction at Source (TDS) is required to be deducted on payments made to Haryana Urban Development Authority (HUDA) For External Development Charges (EDC). The tribunal relied upon the decision of the BPTP Ltd. vs. PCIT and observed that EDC are in the nature of statutory fees.
The Pune bench of Satbeer Singh Godara, (Judicial Member) and Dipak P. Ripote, (Accountant Member) of the Income Tax Appellate Tribunal (ITAT) held that Trust formed for Bramhakshatriya Community was not eligible for Income Tax exemption. Thereafter, the tribunal concluded through the observation reached that āFaced with the situation and in light of the fact that the CIT(E)ās order is also a non-speaking one to this extent we deem it appropriate to restore the assesseeās substantive grievance back to the very authority for appropriate adjudication as per law preferably within three effective opportunities of hearing.ā
The Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, has recently, in an appeal filed before it, on account of non- submission of TDS statement due to reasonable cause, upheld the deletion of income tax penalty. Shri S.M. Joshi, the JCIT-DR, observed as follows: āWe have heard the DR who has relied upon the order of the AO. It is noticed that ld. DR except relying upon the order of the AO has not advanced any arguments to contradict the findings of the ld. CIT(A).ā
The Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, has recently, in an appeal filed before it, held that the failure of the CIT(A) to provide document verification opportunity to the AO, violates the provisions of Rule 46A (3) of the Income Tax Rules. Thus, allowing the Revenueās appeal, the ITAT held āConsidering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one opportunity to the assessee to substantiate her case by filing the requisite details and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the Revenue are accordingly allowed for statistical purposes. In the result, the appeal filed by the Revenue is allowed.ā
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has recently, in an appeal filed before it, while deleting the penalty levied u/s 271 (1) (c), held that the claim of the assessee cannot be said to be āconcealment of particulars of incomeā in the absence of supporting evidence. āIn our considered view, the claim of the assessee at the most can be regarded as āinaccurate claimā which cannot be equated with the furnishing āinaccurate particulars of incomeā. It is for the reason that nothing has been brought on record by the authorities below suggesting that the assessee has furnished the particulars of income with dishonest intent.ā
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has recently, in an appeal filed before it, held that authorities should not pass orders in a casual manner, disregarding the principles of natural justice. Thus, allowing the assesseeās appeal, the ITAT held that āIt is clear therefore that both the authorities below have passed orders in a very casual manner, totally ignoring the pleadings of the assessee and in complete disregard to the principles of natural justice. The orders are highly unjustified and are not sustainable in law. In view of the above, I set aside the order passed by the CIT(A) being a cryptic and non-speaking order. Accordingly, the grounds raised by the assessee are allowed. In the result, the appeal of the assessee is allowed.ā
The Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, has recently, in an appeal filed before it, held that TDS under section 194IA is applicable, only when consideration for transfer of immovable property is more than Rs.50 lac. It was the submission of Shri Hemant Chhajed, C.A, the Counsel for the assessee that there was a transaction of purchase of immovable property on 3-09-2014 for a consideration of 1.20 crores and that the same was carried out by four persons. Thus, the ITAT finally held: āIn the result, the appeal of the assessee is allowed.ā
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, with regard to a search conducted within 6 preceding years of the relevant AY, upheld the Income Tax Proceedings under section 153C. Thus, allowing the Revenueās appeal, the Delhi ITAT held that āSince, the ld CIT(A) has not decided the issues involved in the appeal on merit, we deem it fit to direct the ld CIT(A) to decide the appeal on merit. Accordingly, by upholding the validity of proceedings u/s 153C of the Act on the legal issue, we direct the ld CIT(A) to decide the appeal filed by the assessee on merit after hearing the assessee. In the result, an appeal filed by the Revenue in ITA No. 2829/Del/2019 is allowed for statistical purposes.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has recently, in an appeal filed before it held that when assessment order itself turns to be null and void, the same cannot be a subject matter of revision under Section 263 of the Income Tax Act. Thus, allowing the assesseeās appeal, the ITAT held: āIn view of the above observations, we are of the considered view that since the assessment order passed by ITO Ward 3(3)(2), Ahmedabad itself was null and void, the same could not be the subject matter of revision under section 263 of the Act. In the result, we are allowing the appeal of the assessee on the ground of jurisdiction itself. We are accordingly not separately adjudicating into the merits of the case. In the result, appeal of the assessee is allowed.ā
The Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, has recently, in an appeal filed before it, held that no interest under Section 234A is leviable, when an Assessee has filed the return within the time allowed by notice under Section 153A of the Income Tax Act. Thus, allowing the assesseeās appeal, the Jodhpur ITAT held that āNo interest is leviable under Section 234A of the Act. We, therefore, set aside the findings of the ld. CIT(A) findings of the ld. CIT(A) allows the grounds raised by the assessee. In the result, the appeal of the assessee is allowed.ā
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, while dismissing the appeals filed before it, held that the jurisdiction of the bench shall be determined by the location of the assessing officer. āIn view of the aforesaid, we hold that the present appeals are not maintainable due to lack of jurisdiction, hence, are dismissed. Accordingly, we do soā, the Coram comprising G.S Pannu, the President and Saktijit Ray, the Judicial Member held.
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