Orissa High Court Judgments — 2022

The High Court held that the revenue had not made out a case for interference with the Tribunal's order. The Court found that the circulars issued by the CBDT, particularly regarding the treatment of listed shares held for more than twelve months, were beneficial to the assessee and could be considered retrospectively applicable.

The High Court held that the estimated net profit for the sub-contractor could not be higher than 4% of the turnover. The court found the department's counsel unable to contest this proposition based on prior ITAT rulings.

The Tribunal confirmed the disallowance, holding that the deduction was not allowable even if the contribution was made before the due date of filing the return. The High Court disagreed, following Supreme Court and Delhi High Court precedents.

The High Court held that the CIT(A) and ITAT were not justified in upholding the penalty as there was no short deduction of TDS. The employees had already paid their taxes directly. Therefore, the penalty and the orders of the lower authorities were set aside.

The Tribunal held that rejection of books of accounts solely on the ground of non-issuance of sales memos, especially for sales to tribal populations, was not justified. The High Court agreed that the rejection was based on surmises and conjectures without supporting material.

The Tribunal erred in affirming the conclusions of the AO and CIT(A) based on materials collected subsequent to the assessment period. Each assessment year is separate, and reliance on post-assessment period material is impermissible.

The High Court found the ITAT's disallowance of 5% to be based on surmises and conjectures, lacking a clear rationale. It modified the ITAT's order by restricting the income tax liability to 50% of the demand arising from the ITAT's disallowance.