This weekly round-up analytically summarizes the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan.in during the previous week 18th August 2024 to 24th August 2024.
The Income Tax Appellate Tribunal ( ITAT ) of Ahmedabad recently in a case held that the Income Tax calculation mistake made by the Assessing Officer ( AO ) under section 115BBE of the Income Tax Act 1961 ( ITA ) can only be rectified through section 154 of ITA, and thus the Principal Commissioner of Income Tax ( PCIT ) invoking section 263 for the said rectification was invalid.
The two member bench comprising Ms. Suchitra Kamble and Mr Narendra Prasad Sinha, after hearing the arguments, observed that the PCIT had failed to provide clear and specific findings that the AO’s order was erroneous and prejudicial to the Revenue.
It was determined that any error in the AO’s order could have been corrected under Section 154 (rectification of mistakes) rather than invoking Section 263.
In light of this key observation,the bench concluded that the PCIT’s invocation of Section 263 was unjustifiable and invalid. Accordingly, the assessee’s appeal was allowed.
The Nagpur Bench of the Income Tax Appellate Tribunal ( ITAT ) recently laid down a decision affirming the need for conclusive incriminating evidence to abate an Assessment filed by an Assessee.
The Nagpur Bench of ITAT comprising V. Durga Rao, Judicial Member and K.M. Roy, Accountant Member once again referred to the decisions given by the Supreme Court stating that if addition has been made by the AO in the absence of any incriminating material, then the assessment can only be reopened as per the mechanism laid down under Section 147 of the Income Tax Act. The lack of substantive corroborative evidence paired with the fact that no incriminating evidence had been discovered by the Department at any stage demerits the claim of the Department, irrespective of unabated assessment.
The ITAT in closing allowed the appeal and deleted the additions made by the AO.
In a recent case, the Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax [CIT(A)] which allowed the exemption on sale consideration invested in purchase of property with prior permission of charity.
A two member bench of Narendra Kumar Billaiya, Accountant Member and Sandeep Singh Karhail,Judicial Member observed that since the entire sale consideration has been invested in the purchase of property, with the prior permission of the Charity Commissioner, we do not find any reason to interfere with the findings of the CIT(A).
The Tribunal allowed the losses/disallowances by the appellate authorities in favor of the assessee and against the revenue and it cannot be said that the assessee has artificially created the deficit when the same is emanating from the records of the assessee. The ITAT dismissed the appeal.
The Jaipur Bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter for fresh adjudication due to a short gap between the 3 notices issued by the CIT(A), leading to a lack of representation. The tribunal directed the CIT(A) to give one more opportunity for the assessee to represent the case.
The two-member bench comprising Rathod Kamlesh Jayantbhai, Accountant Member & Narinder Kumar, Judicial Member observed the dates of the notices issued for taking up the appeals by the CIT(A).
It was further directed that the assessee deposit costs of Rs. 2000/- in each appeal to Prime Minister’s Relief Fund. The tribunal observed there was a short gap between the three notices issued by the CIT(A).
Thus, the tribunal considers granting one more opportunity to enable the assessee to represent his appeals before the CIT(A).
L.K.S. Bullion (Import and Export) Pvt.Ltd. vs The Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 920
In a recent case, the Income Tax Appellate Tribunal (ITAT) of Ahmedabad upheld the reopening of assessment under section 148 of the Income Tax Act 1961 (ITA) as the tribunal observed that the Assessing Officer (AO) had sufficient reason to believe that the assessee’s income that was chargeable to tax escaped assessment.
The bench comprising Ms Suchitra Kamble and Mr Makarand V Mahadeokar observed that the AO had a valid reason to believe that income chargeable to tax had escaped assessment.
The bench noted that the information received from the DDIT (Inv.) about the transactions between the assessee company and M/S Vishnu Trading Co. provided a substantial basis for the AO’s belief, and his decision to reopen the assessment was justified.
It was further noted that the AO’s action was not merely based on borrowed satisfaction but on specific information that required further investigation to ascertain the correctness of the transactions. Accordingly, the reopening of the assessment under Section 148 of the ITA was upheld.
In light of this observation , the appeal of the assessee on this ground was dismissed.
The Jaipur Bench of the Income Tax Appellate Tribunal ( ITAT ) restored the case back to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication. The decision follows CIT(A)’s dismissal of the assessee’s income tax appeal on the grounds of being time-barred, without considering the offline appeal filed by the assessee which was well within the time limit.
The two-member bench comprising S. Seethalakshmi (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member) observed that the appeal filed by the assessee was dismissed on the ground of inordinate delay. However, there was no mention of delay in the notices issued by the CIT(A).
The Tribunal further observed that the appeal was filed in physical form well within the time limit which was not considered by the CIT(A). Thus, the matter was restored to the file of the CIT(A) to provide one more opportunity for hearing and to decide the matter on its merits.
The appeal of the assessee was allowed for statistical purposes
Recently in a case, The Income Tax Appellate Tribunal (ITAT) of Ahmedabad remanded a matter back to the Assessing Officer for re adjudication noting that Assessing Officer did not sufficiently verify the assessee’s explanation regarding the source of the cash deposits labeled as unexplained during the assessment.
After examining the facts of the case, The ITAT, comprising Ms Suchitra Kamble (Judicial Member) and Mr Narendra Prasad Sinha (Accountant Member), ruled that Section 68 was applicable even in the absence of formal books of accounts since the bank statement served as a record of the transaction.
However, the Tribunal found that the Assessing Officer did not sufficiently verify the assessee’s explanation regarding the source of the cash deposits.
In light of this observation, the Tribunal remanded the case back to the AO for a detailed verification of the sources of the ₹34,30,000 cash deposit, considering the assessee’s claims of income from house property, other sources, and agricultural activities.
It was said that the assessee be given opportunity of hearing by following principles of natural justice.
Thus, the appeal was partially allowed, specifically for statistical purposes, to ensure a thorough re-examination.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) dismissed the stay application by the Life Trust,upholding the Principal Commissioner of Income Tax (PCIT)’s cancellation order of 30th September 2023. The Trust failed to prove a prima facie case, balance of convenience, or irreparable loss, leading to the denial of the stay.
The two-member bench comprising Kul Bharat (Judicial Member) and Brajesh Kumar Singh (Accountant Member) found that the assessee failed to prove a prima facie case, irreparable loss, or balance of convenience. The trust’s actions against national interests justified the cancellation order of 30.09.2023.
In a recent ruling, the Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) decreed that filing of Belated Income Tax Returns does not disentitle Assessees from claiming exemptions of Long-Term Capital Gains ( LTCG ) under Section 54 of the Income Tax Act, 1961.
The Ahmedabad Bench of the ITAT comprising T.R. Senthil Kumar, Judicial Member and Narendra Prasad Sinha, Accountant Member were entrusted to assess the technicalities of Section 54 of the Income Tax Act, 1961 that were availed by the Assessee while attempting to claim exemptions.
The Bench observed that the Assessee is eligible to claim deduction under Section 54 of the Income Tax Act, 1961 stating that it is not mandatory that the funds used to construct the new residential flat had to necessarily be derived from the funds received through sale of the previously held Capital Asset (i.e., the old residential house). Regarding the time window available to an Assessee to claim exemptions under Section 54, the Bench clarified that the Income Tax Act, 1961 only refers to ‘date of completion of construction of a residential house’ in order to ascertain the eligibility to avail exemptions.
Reference was made to the case of Manilal Dasbhai Makwana vs. ITO (2018)passed by the same Tribunal wherein it was held that “when an assessee furnishes return subsequent to due date of filing return under s.139(1) but within the extended time limit under s.139(4), the benefit of investment made up to the date of furnishing of return of income prior to filing return under s.139(4) cannot be denied on such beneficial construction. Thus, on first principles, we hold that the capital gains utilized towards purchase of new asset before furnishing of return of income before either under s.139(1) or under s.139(4) of the Act will be deemed to be sufficient compliance of Section 54(2) of the Act.”
In conclusion, the Coram while allowing the Appeal directed the AO to grant deductions claimed by the Assessee and to delete the additions made by him
In a recent ruling, the Income Tax Appellate Authority ( ITAT ) bench at Ranchi remanded an income tax matter because CIT(A) did not specify the reason for the dismissal of the appeal.
The assessee approached ITAT for relief. The ITAT bench observed that the assessee may be given de novo consideration in accordance with the principles of natural justice.
The bench comprising Partha Sarathi Chaudhury and Prabhash Shankar, thus remanded the income tax order due to the non-mentioning of the reason for dismissal of the appeal by CIT(A).
Recently, The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) quashed an order passed under section 153C of the Income Tax ACT 1961 (ITA) against assessee for the assessment year (A.Y) 2008-09 noting that the Assessing Officer ( AO ) lacked jurisdiction to initiate the said assessment proceeding.
Thus, the tribunal observed that the proceeding initiated under section 153C of the ITA in this case was not in accordance with the law as laid down by the Supreme Court.
Consequently, the tribunal held that the AO had no jurisdiction to initiate proceedings under Section 153C of the Act for the A.Y. 2008-09, as it was beyond the permissible period of six years from the date of recording of satisfaction of the AO.
Therefore, the assessment order passed under section 153C of ITA for the A.Y. 2008-09 was quashed and in essence, the CIT (A)’s order was upheld. In result, the appeal preferred by the Revenue was dismissed.
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the decision of the Commissioner of Income Tax (Appeals) [CIT(A)], dismissing an appeal that was delayed by 2086 days. The tribunal noted that the assessee failed to provide any affidavit or evidence to substantiate the reasons for the delay, leading to the dismissal of the appeal.
The two-member bench comprising G.D. Padmahshali (Accountant Member) and Vinay Bhamore (Judicial Member) observed the revenue arguments. Without going into the grounds of appeal and merits of the case, the tribunal decided the matter on the note that the appeal filed by the assessee before the CIT(A) with a delay of 2086 days from the expiry of the statutory period prescribed under section 249(2) of the Income Tax Act.
The Tribunal relied on the principles in the Supreme Court case of Esha Bhattacharjee Vs Managing Committee of Raghunathpur Academy and Ors where the issue of sufficiency of reasons in given facts & circumstances was detailed. Even after the COVID-19 relaxation of 2 years was excluded, the balance delay in instituting the appeal before CIT(A) continues to be inordinate, substantial & excessive.
The tribunal further noted that there was no affidavit explaining the cause of the delay and the assessee was found to be casual, non-serious, and non-vigilant in preferring/instituting the appeal before CIT(A) against the assessment order. Thus, the order passed by the CIT(A) dismissing the appeal in-limine was upheld. The appeal was dismissed.
The Income Tax Appellate Tribunal ( ITAT ) bench of Nagpur, referring to the Calcutta High Court decision ruled that deduction under Section 80IA of Income Tax Act, 1961 not allowable for the belatedly filed Income Tax Returns ( ITR ).
The bench added that the assessee’s representative did not present any High Court or Supreme Court judgments supporting his arguments. Conversely, the Departmental Representative strengthened his case by citing relevant judicial precedents, which are binding and must be followed in accordance with judicial hierarchy.
The CIT(A)’s conclusion, which had supported the claim based on the argument that the original return was valid and could be revised, was overturned by the ITAT, affirming the need for obedience to statutory deadlines for claiming deductions. Consequently, the appeal filed by the Revenue was upheld. Rachit Thakar and Kailash C. Kanojiya appeared for the assessee and department respectively.
The Nagpur Bench of the Income Tax Appellate Tribunal (ITAT) upheld the order of the Commissioner of Income Tax (Appeals) emphasizing that once the assessee’s income computation is admitted before CIT(A), it cannot be easily contested at the tribunal.
The two-member bench comprising Durga Rao (Judicial Member) and K.M. Roy (Accountant Member) found that the assessee never cared to file any income tax return and did not produce an account book. The tribunal noted that the CIT(A) took 3.5 years for adjudication and appropriate rebuttals were made by the Assessing Officer.
The tribunal noted that there was no lack of opportunity and found no merit in the assessee’s request. The tribunal emphasized that once the assessee had acknowledged the income computation before the CIT(A), they could not reverse their position and argue against it before the tribunal. Thus, the tribunal upheld the CIT(A) order and dismissed the assessee’s appeal.
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) directed the Commissioner of Income Tax (Appeals) to conduct fresh adjudication in the matter where the assessee failed to produce evidence of cash sales to substantiate the genuineness of cash deposits made during the demonetization period.
The two-member bench comprising Ramit Kochar (Accountant Member) and Siddhartha Nautiyal (Judicial Member) heard both side’s arguments and observed that the CIT(A) ex-parted that assessee’s appeal due to non-appearance. The tribunal secondly observed that the assessee had submitted all the required documents and the assessing officer accepted the source of the cash deposits.
The tribunal further stated that there are certain differences/discrepancies between the assessment and the assessee’s records placed for consideration. Thus, the tribunal restored the matter to the file of CIT(A) and directed it to verify the documents and adjudicate the case based on its merits.
The appeal of the assessee allowed for statistical purposes.
The Raipur bench of the Income Tax Appellate Tribunal ( ITAT ) has restored the case to the Assessing Officer ( AO ) for proper verification of the unexplained cash additions totaling Rs. 18.5 lakhs, which stem from the opening balance and unsecured loans.
The bench determined that the issue should be remanded to the AO for further verification of the facts and contentions raised by the assessee, based on corroborative evidence. The tribunal, comprising Ravish Sood (Judicial Member) and Arun Khodpia, (Accountant Member) directed the AO to conduct necessary inquiries and provide the assessee with a reasonable opportunity to present evidence and produce the trade and loan creditors. The AO is instructed to adjudicate the matter afresh, following the law’s mandate, if the assessee fails to substantiate his claims
In the case of Tarun Mohan Jani vs ACIT, the Income Tax Appellate Tribunal ( ITAT ) Mumbai ruled in favor of the appellant, granting him relief from an addition of ₹3, 92,000 made under Section 56(2) (x) of the Income Tax Act, 1961. The dispute arose over the purchase of an industrial warehouse in Mumbai, where the transaction value was lower than the stamp duty valuation. The ITAT concluded that when the difference between the market value determined by the Valuation Officer and the actual transaction value is within this 10% margin, no addition should be made to the assessee’s income. The Tribunal directed the deletion of the addition, allowing the appeal in favor of Tarun Mohan Jani.
The single member bench of the tribunal comprising Prashanth Maharishi (Accountant member) directed the Assessing Officer to delete the addition of Rs. 3, 92,000/- made in the hands of the assessee. Accordingly, the appeal filed by the assessee was allowed.
The two member bench of the Income Tax appellate Tribunal (ITAT), Raipur, has ruled that Expenditures incurred for earning income chargeable under “Income from Other Sources” should be eligible for deduction under Section 57, while those incurred for earning income chargeable under “Income from Business and Profession” should be deductible under Section 36(1)(iii) of the Income Tax Act, 1961.
The bench, comprising Ravish Sood (Judicial Member) and Arun Khodpia, (Accountant Member) considered the rival submissions and reviewed the material on record. They observed that the assessee had furnished details regarding the loans taken and their utilization in business activities. It was noted that the assessee had shown income from partnership firms, interest income allowable under Section 40(b)(iv), and interest received from private limited companies.
The bench concluded that the interest and other expenditures claimed under Section 57 should be bifurcated. Expenditures incurred for earning income chargeable under “Income from Other Sources” should be eligible for deduction under Section 57, while those incurred for earning income chargeable under “Income from Business and Profession” should be deductible under Section 36(1)(iii). Consequently, the assessee’s appeal was partly allowed.
The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the Commissioner Of Income Tax(Appeals)[ CIT(A)] order, observing that the reopening of assessment was based on incorrect facts and directed the Assessing Officer ( AO ) to delete the addition made under section 68 read with section 115BBE of the Income tax Act,1961.
The two-member bench comprising Sandeep Singh Karhail (Judicial member) and Narendra Kumar Billaiya( Accountant Member) found the addition under section 68 read with section 115BBE unjustified and set aside the CIT(A)’s order and directed the AO to remove the addition.
The Delhi High Court directed for the deletion of the penalty imposed by the Assessment Unit ( AO ) and set aside the order of the Commissioner of Income Tax (Appeals), even after the petitioner has completed the Scrutiny Assessment by producing the necessary evidence regarding the same.
The Division Bench consisting of Shri Ravish Sood,Judicial Member and Arun Khodpia, Accountant Member observed that even though the assessee has failed in responding certain notices of the AO, however, in responses the assessee has made necessary replies and completed the assessment in accordance with Section 143(3) of the Act.
So following the analogy, the bench decides that the penalty imposed u/s 272A(1)(d) of the Act is not justifiable in the present case, as the AO himself should have condoned the absence of assessee on earlier occasions, as necessary informations and evidences were furnished by the assessee to assist the completion of the assessment.
The Bench thus directed the Commissioner of Income Tax (Appellate) to set aside the order and Assessment Officer to delete the penalty in favor of the assessee.
Appeal of the assessee was allowed in terms of the aforesaid observations
The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) in a recent decision reaffirmed the need for ensuring clarity and avoiding all sorts of procedural ambiguity while issuing Notices and Assessment Orders under the provisions of the Income Tax Act, 1961.
The Mumbai Bench of ITAT comprising B.R. Baskaran, Accountant Member and Anikesh Banerjee, Judicial Member stressed on the lack of the limb of the provision under which the penalty was initiated. Referring to the case of Mohammed Farhan A Shaikh vs DCIT (2021) that every penal provision must be construed strictly and in the case of any ambiguity while interpreting the provision of the Act, then a more liberal approach in favor of the Assessee should be adopted by the Court in the event that the Assessee has discharged all of their duties with regards to the Assessment Proceedings.
The Bench proceeded to allow the Assessee’s Appeal in respect of the binding judicial precedents set by Higher Courts.
In a recent case, the Cochin Bench of Income Tax Appellate Tribunal (ITAT) held that the consolidated penalty under section 271D and 271E of Income Tax Act (ITA) cannot be levied without specifying individual cash transactions.
The Tribunal further noted that there was a significant delay in issuing the penalty orders beyond the statutory period as well.
Accordingly, the matter was remitted back to the AO for fresh adjudication as there was a lack of evidence to justify the penalty.
Recently in a case, the Income Tax Appellate Tribunal (ITAT) of Mumbai held that hardship and rehabilitation allowances received from housing developers as compensation for the hardship endured due to dispossession cannot be taxed as revenue receipt.
After examining the facts of the case, the single bench of Mr Prashant Maharishi reiterated the Bombay High Court’s ruling in the case of Sarfaraz S. Furniturewalla.
The tribunal observed that it was an undisputed fact that the assessee did in fact, received the hardship allowance from the developer and hence, the amount of hardship allowance received by the assessee of Rs. 25,21,508/- was not held as the income of the assessee.
Therefore, respectfully following the decision of the Bombay High Court, the Tribunal directed the AO to delete the addition of Rs. 25,21,508/- made in the hands of the assessee.
In the result, the appeal filed by the assessee was allowed.
In a recent ruling, the Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) directed CIT(A) to consider the case of the assessee by condoning the delay as the reason for delay has been satisfactorily explained.
The bench, comprising of Manish Borad (Accountant Member) and Pradip Kumar Choubey, (Judicial Member), held that as reasonable cause for the delay in filing has been satisfactorily explained by the assessee, and thus remanded the matter back to CIT(A) to consider condonation of delay.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) in a recent ruling deleted the addition that was made by the Assessing Officer (AO) under Section 41(1) of the Income Tax Act, 1961, in respect to the impugned amount of Rs. 1,94,18,130/-.
The bench observed that no seized material was found during the course of the search action at the place of U.K. Bava to prove that the said liability ceased to exist, and it has been shown in the books of accounts and there was no write-off of said debts by the assessee or by the creditors.
The bench, comprising of Chandra Poojari (Accountant Member) and Keshav Dubey (Judicial Member), deleted the addition made by AO under Section 41(1) of the Income Tax Act with respect to the impugned amount of Rs. 1,94,18,130/-.
The Delhi Bench Of Income Tax Appellate Tribunal ( ITAT ) ruled that non-filing of Form No. 10B with Income Tax Return ( ITR ) is a procedural omission and cannot be a hindrance in claiming exemption under Section 11 of Income Tax Act, 1961.
The two-member bench of Sudhir Pareek (Judicial Member) and S Rifaur Rahman (Accountant Member) allowed the appeal, condoning the delay in filing the Audit Report in Form 10B, and restored the matter to the CIT(A) to grant the exemption under Section 11 and pass an order according to the law.
The Raipur bench of Income Tax Appellate Tribunal (ITAT) directed for the deletion of the additional amount charged by the Assessing Officer (AO). An addition of Rs.2.10 crore was made by the AO, but the lack of evidence to prove the unexplained investment under 69 of the Income Tax Act,1961.
The Division Bench consisting of Ravish Sood, Judicial Member and Arun Khodpia, Accountant Member observed that by considering the rival contentions, the document seized by the department titled as “Sauda-Ikrarnama” was drafted for acquisition of plant and machinery along with General Land, Adivasi land, JCB, Loader, Bus, Hyva, Stores items, Plots etc. It is an admitted fact that the said document was updated, unsigned and unwitnessed, printed on a plan paper, having certain handwritten corrections (copy placed at PB 36-38, also reproduced in the assessment order).
While the hearing in the aforesaid case was in progress, AR of the assessee have furnished, an application dated 14.04.2023 on 12.06.2023, seeking to raise a legal contention / ground, so as to challenge the validity of approval granted u/s 153D in the present case.Since we have approved the decision of CIT(A), wherein the entire addition made by the AO has been deleted in terms of our observations hereinabove, therefore, we refrain to deal with the aforesaid legal ground raised by the assessee challenging the validity of approval granted u/s 153D of the Act in the aforesaid application u/r 27, the same thus, is left as open.
In the combined result, ITA No. 108/RPR/2020, ITA Nos. 06 & 07/RPR/2021 of the department are rendered as dismissed.
The assessee, Mukesh Kumar Agrawal, (06/RPR/2021) appeal is partly allowed in terms of the observation and findings depicted hereinabove.
The assessee, Rajesh Kumar Agrawal (07/RPR/2021) appeal is partly allowed in terms of the observation and findings depicted hereinabove.
The Respondent, Deputy Commissioner of Income Tax (DCIT) (Central-2), Raipur represented by S. L. Anuragi, CIT-DR.
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) confirmed the Commissioner of Income Tax (Appeals) [CIT(A)]’s decision to limit the addition to Rs. 1,45,10,000, acknowledging that although shell companies linked to the Praveenkumar Jain Group were involved in money laundering, the remaining amounts were either not received or refunded.
The two-member bench comprising Siddhartha NautiyaI (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) upheld the CIT(A) order, confirming that the balance amount of Rs. 9 crore was either not received by the assessee or was promptly repaid and dismissed the department’s appeal.
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner Of Income Tax (Appeals)[CIT(A)]’s decision to refer Long Term Capital Gain ( LTCG ) valuation to the Departmental Valuation Officer( DVO ), citing title defects and disputes over stamp duty valuation as reasons for the referral under Section 50C(2) of Income Tax Act,1961.
The two-member bench comprising Siddhartha Nautiyal (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) dismissed the Departmental appeal contending that the CIT(A) had correctly required the matter to be referred to the DVO and found no grounds to interfere with the CIT(A)’s order .
The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) dismissed the appeal as the assessee sought to withdraw it after receiving the required registration under section 12A of the Income Tax Act,1961.
The two-member bench comprising Suchitra Kamble(Judicial Member) and Makarand V. Mahadeokar(Accountant Member) permitted the withdrawal of the appeal as requested in the withdrawal application.
The two-member bench of the Income Tax Appellate Tribunal ( ITAT ) in Mumbai set aside the order, ruling that the Principal Commissioner of Income Tax ( PCIT ) failed to assume jurisdiction under Section 263 because the assessment order was issued in the name of a non-existent entity, and consequently, the ITAT restored the Assessing Officer’s ( AO ) order dated March 31, 2022, framed under Section 143(3) of the Income Tax Act, 1961.
Considering these facts and judicial precedents, the tribunal, comprising Judicial Member Sandeep Singh Karhail and Accountant Member Narendra Kumar Billaiyya, set aside the PCIT’s order dated March 26, 2024, and restored the AO’s order dated March 31, 2022, framed under Section 143(3) of the Income Tax Act. Consequently, the assessee’s appeal was allowed.
The Ranchi Bench of Income Tax Appellate Tribunal (ITAT) remanded the matter to the Commissioner of Income Tax (Appeals) emphasizing that it has no power to dismiss an income tax appeal solely based on non-prosecution without addressing the merits of the case.
The two-member bench comprising Partha Sarathi Chaudhury (Judicial Member) and Prabhash Shankar (Accountant Member) observed that the CIT(A) was not aware of the written submission made by the assessee through the e-filing portal due to some technical glitches.
The tribunal noted there was a lack of communication and emphasized that CIT(A) has no power to dismiss the appeal of the assessee on account of non-prosecution without deciding on the merits of the case.
Given the technical glitches and the miscommunication, the tribunal decided to remand the case back to the CIT(A) for a fresh decision after taking into account the submissions made by the assessee.
The appeal was allowed for statistical purposes.
In a recent case, the Ahmedabad bench of Income Tax Appellate Tribunal ( ITAT ) set aside an ex parte order observing that the assessee did not receive hearing notices sent by the Revenue, as they were being sent to an ex-employee.
The bench of Mr Siddhartha Nautiyal and Mr Makarand V Mahadeokar, after considering the circumstances, including the company’s failure to receive notices and the strong merits of the case as evidenced by past ITAT rulings, decided in favor of the assessee.
The tribunal set aside the CIT(A)’s order, restoring the matter back to CIT(A) for de-novo consideration, ensuring that the company is given a proper opportunity to present its case.
The tribunal also directed the company to diligently comply with all future notices from CIT(A).
This decision was pronounced on August 7, 2024, and the appeal was allowed for statistical
purposes.
In a recent case, the Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) held that a gift received from a Non-Resident Indian ( NRI ) relative is not chargeable to income tax if genuineness is proved.
On examining the submissions of the assessee, the single bench of Mr Prashant Maharishi observed that the assessee had in fact, satisfactorily proved the genuineness of the gift received, as well as the relationship with the donor.
As gifts received from an NRI relative are not chargeable to tax, the tribunal directed the addition of 20,00,000/- made towards the income of the assessee to be deleted.
In result, the appeal was allowed.
The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) recently held in a case that interest income from fixed deposits can be set off against property maintenance expenses.
The bench of Mr Senthil Kumar and Mr Narendra Prasad Sinha, upon reviewing the facts, observed that the income earned from various sources, including the interest on fixed deposits, was in fact applied towards the maintenance of the residential property.
The Tribunal also noted that the interest income contributed to reducing the maintenance burden on the assessee-society’s members. In light of these observations, the tribunal allowed the assessee to set off the interest income against its maintenance expenses.
The assessee was also granted the standard deduction of ₹50,000 under Section 80P(2)(c)(ii) of the ITA, noting that since the assessee being a housing co-operative society showed net surplus of Rs.4,64,486/- in its Profit and Loss account after netting out all the maintenance expenses, it is eligible for the said deduction.
In result , the addition made by the AO on account of interest income was deleted and the deduction was also allowed.
The Allahabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that service tax leviable on preferential location charges charged by builder. The Tribunal held that if no charge is levied for a preferential location or development, no service tax would be attracted in the first place.
The two member bench of P.K. Choudhary (Judicial Member) and Sanjiv Srivastava (Technical Member) have observed that the service is rendered in the context of a location, which does not make it a tax on land within the meaning of Entry 49 of List II. The tax continues to be a tax on the rendering of a service by the builder to the buyer. There is no vagueness or uncertainty.
While dismissing the appeal, the Tribunal held that if no charge is levied for a preferential location or development, no service tax would be attracted in the first place. Builders, however, follow the practice of levying charges under diverse circumstances, including the preferred development of the property intended to be sold or a preferred location that is made available to the buyer. If no separate charge is levied, the liability to pay service tax does not arise, and it is only when a particular service is separately charged that the liability to pay service tax arises.
The Ahmedabad Bench of Income Tax Appellate Tribunal( ITAT ) remanded the matter to the Jurisdictional Assessing Officer( JAO ) for reconsideration, taking into account the delay condonation orders for Forms 10B and 9A issued by the Commissioner of Income Tax (Exemption)[CIT(E)]. The tribunal directed the JAO to review these orders and allow the assessee an opportunity to present the necessary documents and details.
The two-member bench comprising Senthil Kumar (Judicial Member) and Narendra Prasad Sinha (Accountant Member) remanded the matter to the JAO to review the CIT(E)’s orders.
The tribunal directed a fresh assessment, ensuring the assessee was given a chance to be heard and instructed the assessee to provide all required details and documents. The appeal was allowed on these terms.
The Income Tax Appellate Tribunal ( ITAT ) Raipur Bench rejects the appeal of the assessee to restore the matter back to the file of Commissioner of Income Tax (Appeals) (CIT(A)) as the assessee was negligent throughout the assessment proceedings that lasted for more than 08 Years, even after the assessee was given proper opportunity. The assessee remained non-attentive and negligent even after adequate opportunities have been afforded.
The ITAT Bench consisting of Ravish Sood, Judicial Member and Arun Khodpia, Accounting Member observed that it is an undisputed fact that the communications were dropped in the ITBA portal which was downloaded and copies were served. But the communication was done on the old email, but was aware of the order. So the assessee from the aforesaid facts was careless throughout all the tax proceedings.
While there is said to be violation of Natural Justice, there is also a well-known dictum of law “VIGILANTIBUS, NO DORMENTIBUS, JURA SUBVENIUNT” which means law will help only those who are vigilant. Law will not assist those who are careless of his/her right. In order to claim one’s right, he/she must be watchful of his/her right. Only those persons, who are watchful and careful of using his/her rights, are entitled to the benefits of law. Law confers rights on persons who are vigilant of their rights.
After the consideration facts and circumstances the tribunal expressed the opinion that the request of the assessee to restore the matter back to the file of CIT(A) cannot be acceded to, especially in a case wherein the assessee has chosen not to represent its matter for more than 08 years, even after the opportunity by the tribunal, the assessee remain non-attentive, thus, have not furnished required information and explanation before the lower authorities when adequate opportunities have been afforded.
In view of aforesaid observations, in absence of any explanation regarding the merits of issue, rejecting the prayer of the assessee to restore the matter to the file of CIT(A), the appeal of the assessee was dismissed.
The assessee was represented by Shri Prafulla Pendse, CA. The revenue was represented by Shri Satya Prakash Sharma, CA.
The Income Tax Appellate Tribunal (ITAT) Raipur Bench upheld the decision of Commissioner of Income Tax (Appeals) (CIT(A)) which deleted an Addition of 2.19 crore for the Assessment Year (AY) 2008-09, as no incriminating material was found during the Search and Seizure for Unabated AY.
The ITAT bench comprising of Ravish Sood, Judicial Member and Arun Khodpia, Accountant Member observed that there are issues regarding the trustworthiness of the Kolkata based company and the assessee has received Rs.2.19 crores and 2.25 crores, under the garb of share capital. According to AO the trustworthiness, identity and genuineness of the transaction could not be established by the assessee, therefore the additions were made under Section 68 of the Income Tax Act.
Herein, the court agreed with the observation of CIT(A) that the aforesaid loose papers are receipt of form for allotment and issue of equity share to investor companies and such documents cannot be termed as incriminating documents, this view was supported by the Commissioner of Income-tax v. Goldstone Cements Ltd. reported in [2023].
In view of the decision in the case of Goldstone Cements Ltd. it can be safely concluded that the documents furnished before ROC would not constitute the incriminating material.
In the present case, as the year concerned was an unabated assessment years and also documents surfaced during the search and seizure action are not in the nature of incriminating material, therefore respectfully following the principle laid down by the court in the case of Abhishar Buildwell (supra), the court considers the opinion of CIT(A) i.e to delete the addition of an amount 2.19 crore for the AY 2008-09, had rightly and judiciously and approve the same.
So the grounds of appeal raised by the department were dismissed.
In the Combined result, both the aforesaid appeals of the Department were rendered as dismissed, and the cross objection of the assessee stood partly allowed, in terms of aforesaid observations.
The assessee was represented by Shri Sunil Kumar Agrawal a/w Shri Vimal Kumar Agrawal & Smt. Laxmi Sharma, CA’s.
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