ITAT Agra Judgments — February 2025

The Tribunal held that the CIT(E)'s rejection of the registration application was not justified. The Tribunal found that the assessee's activities were charitable, funds were not diverted for non-charitable purposes, and the grounds for rejection were either not supported by evidence or irrelevant for the purpose of granting registration.

The assessee sought to withdraw the appeal stating that they had filed a declaration under the Vivad se Vishwas Scheme, 2024. The Departmental Representative had no objection to the withdrawal.

The Tribunal held that for the exercise of revision jurisdiction under Section 263, the assessment must be simultaneously erroneous and causing prejudice to the Revenue. Since the revisional authority failed to provide specific findings on these aspects, the revision directions were not sustainable.

The Tribunal held that for a revision order under Section 263 to be valid, it must contain categorical findings on the merits of the case, detailing the errors in assessment and the prejudice caused to the revenue. Mere non-response to a show-cause notice is insufficient.

The Tribunal held that the PCIT's section 263 revision directions were not sustainable. This was because the revisional authority failed to provide any categorical finding on merits, discuss the relevant error, or demonstrate prejudice to the revenue, which are essential prerequisites for invoking revisionary powers under section 263. The Tribunal relied on the settled law that an assessment cannot be revised solely due to non-response to a show-cause notice.

The Tribunal held that for a revision under Section 263 to be valid, the PCIT must provide a categorical finding on merits, discussing the specific error in the assessment and the prejudice caused to the revenue. Merely relying on un-responded show-cause notices is insufficient. The Tribunal cited the case of Malabar Industries Ltd. vs. CIT and M. L. Chains Vs. PCIT.

The Tribunal held that the revisional authority must provide categorical findings on merits, discussing both the error in assessment and the prejudice caused to revenue. Merely un-responded show-cause notices are insufficient to invoke revision jurisdiction.

The Tribunal held that the revisionary authority must provide a categorical finding on merits, discussing the error and prejudice to the revenue, as per established law like Malabar Industries Ltd. vs. CIT. Merely because show-cause notices were un-responded does not make an assessment liable for revision.

The Tribunal acknowledged the possibility of communication gaps in virtual hearings and, in the interest of justice, decided to set aside the appeals. The matters were restored back to the CIT(A)/NFAC for a fresh adjudication.

The tribunal noted that the Revenue's argument that non-compliance with show-cause notices should lead to upholding the orders was not sustainable. The tribunal relied on settled law that for revision under Section 263, the assessment must be both erroneous and prejudicial to the revenue.

The Tribunal held that for a revision under Section 263 to be invoked, the assessment must be simultaneously erroneous and prejudicial to the revenue. Merely because a show-cause notice went un-responded does not automatically make an assessment liable for revision. The Tribunal cited case laws to support this.

The Tribunal held that for a revision under Section 263 to be invoked, the assessment must be both erroneous and prejudicial to the interest of the revenue. Simply issuing a show-cause notice that goes un-responded is not sufficient grounds for revision if the authority does not record specific findings on merits.

The Tribunal held that for a revision under Section 263 to be valid, the assessment must be both erroneous and prejudicial to the interest of the revenue. The Tribunal found that in these cases, the revisional authority had not provided any categorical finding on merits after discussing the relevant errors and prejudice. Merely issuing a show-cause notice and not receiving a response was insufficient for revision.

The Tribunal held that for a revision under Section 263 to be valid, the assessment must be both erroneous and prejudicial to the interest of the revenue. Merely issuing a show-cause notice that remained un-responded does not automatically validate a revision if these conditions are not met.

Since the consequential assessment order has been settled under VSVS, the subject appeal has become academic and therefore, it was prayed that the appeal be allowed to be withdrawn.

The Tribunal noted that the assessee had submitted an application under the Direct Tax Vivad Se Vishwas Scheme, 2024, and certain forms were not yet issued by the prescribed authority. The Revenue did not dispute these averments.

The assessee had submitted Form 1 & 2 under the Vivad Se Vishwas Scheme, but Form 4 had not been issued by the prescribed authority. The Revenue did not dispute the assessee's averments.

Since the assessee did not appear and the Revenue did not dispute the averments made by the assessee, the Tribunal proceeded ex-parte. The appeal was considered as withdrawn by the assessee.

The Tribunal condoned the delay of 227 days in filing the appeal before the first appellate authority, considering the period of delay falling within the COVID-19 pandemic lockdown. The appeal was restored to the CIT(A) for fresh adjudication on merits.

The Tribunal held that an inadvertent mistake in filing the Income Tax Return form should not vitiate the claim. The impugned order was set aside, and the appeal was restored to the CIT(A) to verify the claim under the correct section.

The Tribunal held that the reassessment order was bad in law because the Assessing Officer failed to issue a notice under section 143(2) of the Act, which is mandatory even in reassessment proceedings. Several judicial precedents were cited in support of this view.

The Tribunal noted that the assessee did not appear, and considering the principles of natural justice, it was decided to provide another opportunity for hearing before the CIT(A). The impugned order was set aside and restored for de novo adjudication.

The Tribunal acknowledged the principles of natural justice and the possibility of communication gaps in the faceless regime. Therefore, the Tribunal set aside the impugned orders and restored the appeals to the CIT(A) for fresh adjudication.

The CIT(A) rejected the assessee's claim without considering the Wealth Tax Return. The Tribunal held that the Wealth Tax Return, filed before demonetization, explained the source of the deposit, and therefore the addition was arbitrary.

The Tribunal acknowledged the ex-parte nature of the impugned order and the assessee's request for a further hearing. Considering the principles of natural justice, the Tribunal decided to set aside the order and restore the appeal to the CIT(A) for a fresh adjudication.

The Tribunal, relying on the decision of the Hon'ble High Court of Calcutta in Sunil Kumar Agarwal's case, accepted the assessee's prayer for valuation by the Departmental Valuation Officer (DVO). The assessment was restored to the AO for re-framing after obtaining DVO's valuation.

The Tribunal noted the principles of natural justice and potential communication gaps in the faceless regime. It was decided to grant the assessee another opportunity to present its case before the CIT(A).

Considering the principles of natural justice and potential communication issues in the faceless regime, the Tribunal decided to grant the assessee another opportunity to present its case. The impugned order was set aside, and the matter was restored to the CIT(E) for fresh adjudication after providing a reasonable opportunity of hearing.

The Tribunal held that both the lower authorities passed ex-parte orders, and the assessee has now come forward to explain their case with additional evidence. The Tribunal clarified that they have not commented on the merits of the issues.

The tax effect of the Revenue's appeal was found to be less than the minimum threshold prescribed by CBDT Circular No. 9/2024. The Departmental Representative did not dispute this fact, and the circular was made applicable retrospectively.

The Tribunal held that if the AO accepts that the items for which reasons were recorded have not escaped assessment, it implies a lack of "reasons to believe that income has escaped assessment", rendering the notice invalid and without jurisdiction to assess any other income. Since no addition was made on the basis of the reopening's grounds, the reopening fails.