ITAT Agra Judgments — March 2019

The Tribunal held that the reasons recorded by the AO for initiating reassessment proceedings were invalid as they demonstrated a total non-application of mind and were based on borrowed satisfaction. Consequently, the assumption of jurisdiction by the AO was not valid.

The Tribunal held that the disallowance of TDS written off was justified due to lack of evidence. However, the disallowances for director and staff salaries were remitted to the AO for fresh examination with additional evidence. The addition on account of shortage of physical cash was deleted, citing lack of specific provisions in the IT Act for such additions and the principle that survey statements have no evidentiary value.

The Tribunal held that the addition of Rs. 3,00,00,000/- as unexplained cash credit was not justified as the assessee had discharged its onus by proving the identity, genuineness, and creditworthiness of the creditor. The Tribunal also found that the AO failed to issue summons for examination of the creditor despite the assessee's request.

The Tribunal held that the bank deposits should be considered as turnover from business, and allowed the appeal. It directed the Assessing Officer to apply a net profit rate of 5% on the deposits, resulting in no addition over the returned income.

The Tribunal held that the reasons recorded by the Assessing Officer for reopening the assessment were not valid reasons in the eyes of the law. Consequently, the assessment orders passed pursuant to these reasons were quashed.

The Tribunal held that the CIT(A)'s order, based on an inspector's report and AO's objections without giving the assessee an opportunity to rebut them, violated principles of natural justice. The matter was restored to the AO for fresh examination.

The Tribunal held that the reasons recorded by the AO for reopening the assessment were not valid in the eyes of law. Consequently, the assessment orders were quashed.

The Tribunal held that the reasons recorded by the AO for reassessment were bald and lacked application of mind, failing to establish a 'reason to believe' that income had escaped assessment. The reasons were considered 'reasons to suspect' only.

The ITAT quashed the notice under section 148 and the consequent assessment order. The tribunal held that the reasons recorded by the AO lacked application of mind and did not demonstrate a 'reason to believe' that income had escaped assessment, but rather a 'reason to suspect'.

The Tribunal held that a valid service of a valid notice under section 148 of the Income Tax Act, 1961, is a condition precedent to the validity of any assessment or reassessment under section 147. The Tribunal noted that the assessee had raised objections regarding non-service of the section 148 notice, and an affidavit was filed to this effect. The Tribunal found that the assessee's address and jurisdiction had changed, and this information was available with the Income Tax department. The notice under section 148 was issued to the old address, and the Tribunal concluded that this constituted 'no service in the eye of law'. Relying on various High Court and Supreme Court judgments, the Tribunal held that if no notice under section 148 is issued, or if the notice issued is invalid, or its service is invalid, the Assessing Officer cannot proceed with reassessment proceedings. Consequently, the assessment order dated 21.12.2016 was declared illegal and void-ab-initio. The Tribunal did not adjudicate on the other grounds related to the legality of the assessment on merit as the assessment order itself was quashed.