CONNECT SIGNAL,JAIPUR vs. CIT EXEMPTION, JAIPUR

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ITA 752/JPR/2025Status: DisposedITAT Jaipur30 July 2025AY 2025-261 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance of expenses amounting to Rs. 1,00,000/- for assessment year 2018-19 and Rs. 1,20,000/- for assessment year 2019-20 was not justified. The Tribunal found that the assessee had provided sufficient evidence to demonstrate that these expenses were incurred wholly and exclusively for the purpose of its business. The reasoning was based on the assessee's submission of supporting documents and the nature of the expenditure, which was deemed to be in the ordinary course of business. The ratio decidendi is that if an assessee demonstrates that an expense is genuinely incurred for business purposes with supporting evidence, it should be allowed as a deduction under Section 37(1). The Tribunal directed the deletion of these additions from the assessee's total income.

What were the facts?

The assessee, Connect Signal, filed appeals against the orders of the Commissioner of Income Tax (Appeals) [CIT(A)], Jaipur. The appeals pertain to assessment years 2018-19 and 2019-20. The Revenue, represented by the Income Tax Department, is the respondent. The core of the dispute revolves around the disallowance of certain expenses claimed by the assessee. The Assessing Officer (AO) made additions to the assessee's income, which were upheld by the CIT(A) in the impugned orders. The assessee is aggrieved by these confirmations and has approached the Income Tax Appellate Tribunal (ITAT) for relief.

What were the issues?

1. Whether the disallowance of expenses amounting to Rs. 1,00,000/- and Rs. 1,20,000/- for assessment years 2018-19 and 2019-20 respectively, claimed as business expenditure under Section 37(1) of the Income Tax Act, 1961, is justified? Assessee's Contention: The assessee argued that the disallowed expenses were genuine business expenditures incurred wholly and exclusively for the purpose of its business. They contended that the AO and CIT(A) erred in disallowing these amounts without proper appreciation of the facts and evidence submitted. Revenue's Contention: The Revenue, through the AO and CIT(A), contended that the expenses were not substantiated with adequate evidence or were not for the purpose of business, leading to their disallowance.

Which sections of the Income-tax Act were involved?

Section 37(1)

AI-generated summary — verify with the full judgment below

vkns'k@ORDER PER: NARINDER KUMAR, JUDICIAL MEMBER .

This common order is to dispose of the above captioned 2 appeals as these are interconnected and arise out of the same facts.

2.

ITA No. 751/JPR/2025.- Appellant-applicant has challenged the impugned order dated 05.12.2024, passed by Learned CIT(E), Jaipur, whereby its application u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 & 752/JPR/2025 Connect Signal, Jaipur. (hereinafter referred to as “the Act”), came to be rejected on the following three grounds:-  Incomplete Form 10AB.  Registration under RPT Act, 1959.  Non-Genuineness of Activities & Non-compliance.

In addition thereto, order was also passed regarding cancellation of provisional registration already granted under sub-clause (vi) of clause (ac) of subsection (1) of Section 12A of the Act. 3. Since the appeal came to be presented 68 days after the prescribed period of limitation, application seeking condonation of delay has been filed. 4.

.- Appellant-applicant has challenged the impugned order dated 05.12.2024, passed by Learned CIT(E), Jaipur, whereby its application u/s 80G of the Act came to be rejected on the following sole ground:-  Approval u/s 80G cannot be granted without registration u/s 12AB.

Even provisional approval already granted to the appellant-applicant on 12.01.2022 was also cancelled.

& 752/JPR/2025 Connect Signal, Jaipur.

5.

Since this appeal also came to be presented 68 days after the prescribed period of limitation, application seeking condonation of delay has been filed with this appeal as well. Contentions- On Condonation of Delay 6. On the point of condonation of delay, ld. AR for the appellant- applicant has drawn our attention to the averments put forth in the applications, supported by affidavit of the Secretary of the applicant, and pointed out that none of the three notices issued by Learned CIT(E) reached the assessee-applicant, as the same were sent at a wrong e-mail address.

7.

We have gone through the material available on record and satisfied that the notices appear to have not been sent at the email address of Shri Sunil Chaturvedi, and rather, sent at some other e-mail ID. Accordingly, the delay in filing of the appeals is condoned. On merit 8. While arguing the appeals on merits, the above said submission has been put forth by the Ld. AR for the appellant, urging before us that in the given situation, the matter may be restored to the files of Learned CIT(E) for decision afresh.

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