ITAT Ahmedabad Judgments — April 2025

The Tribunal held that Section 13(1)(b) applies at the stage of granting exemption under Section 11, not at the time of granting registration under Section 12AB. Citing judicial precedents, the Tribunal found that a trust with mixed objects (some for a specific community, some for the general public) is eligible for registration. The CIT(E) was directed to grant final registration.

The Tribunal heard the appeal filed by the assessee. The specific decision of the Tribunal is not detailed in the provided snippet.

The Tribunal held that the assessee failed to file returns and respond to notices at all stages, including before the Tribunal, despite multiple opportunities and adjournments. No material was produced to support the grounds of appeal, indicating a lack of interest in pursuing the case.

The Tribunal condoned the delay in both appeals. For ITA No: 194/Ahd/2021, the Tribunal noted that the Co-ordinate Bench in the assessee's own case for AY 2011-12 had condoned a delay of 1607 days on identical facts, and this order had become final. The Tribunal reiterated the principles from Mst. Katiji (167 ITR 471), emphasizing that substantial justice should be preferred over technical considerations and that 'sufficient cause' should be construed liberally. The Tribunal found the assessee's reasons of ill health and financial stress to be beyond their control. For ITA No: 190/Ahd/2024, the Tribunal acknowledged the additional delay due to withdrawing and refiling an appeal, but found the explanation provided in the affidavit, including insolvency, medical issues, and the appointment of new consultants, to be sufficient. The Tribunal reasoned that since the lower authorities' orders were ex-parte, condoning the delay and restoring the issue to the Assessing Officer for de-novo assessment would advance substantial justice. Both appeals were allowed for statistical purposes, with a direction for the assessee to cooperate in the de-novo assessment.

The Tribunal held that the approval for reopening the assessment was obtained from the wrong authority as per Section 151 of the Income Tax Act, 1961. Consequently, the entire reassessment proceedings were deemed void and illegal.

The Tribunal noted that the appeal was decided ex-parte and the assessee had provided reasons for the delay and non-appearance. The Tribunal set aside the order of the Ld.CIT(A) and restored the matter for a fresh decision.

The Tribunal held that the interest income received from a co-operative bank is eligible for deduction under Section 80P(2)(d) of the Income Tax Act, considering co-operative banks as co-operative societies. It also upheld the exemption of transfer fees received from members based on the principles of mutuality.

The Tribunal held that the Assessing Officer and CIT(A) ignored the evidence filed by the assessee regarding cash in hand for business exigencies. The Tribunal noted that the assessee's business required significant cash for purchases and sales, and the addition made under Section 69A was not sustainable.

The tribunal, considering the assessee's submission and the relevant CBDT Circulars, dismissed both appeals as withdrawn. The assessee was granted liberty to seek recall of this order and restoration of the appeals if Form No. 2 is not issued within the prescribed time limit or if the application under the VSV Scheme is rejected for any reason. The Departmental Representative did not object to the dismissal.

The tribunal noted the assessee's submission about opting for the Vivad Se Vishwas Scheme and the issuance of Form No. 2. The Departmental Representative raised no objection, and considering the submissions, the appeal was dismissed as withdrawn.

The Tribunal held that the issue of disallowance of prior period expenses should be decided de novo. Relying on the decision of the Gujarat High Court in CIT vs. Adani Enterprises Ltd., the Tribunal directed the AO to allow the prior period expenditure in consonance with the High Court's view.

The Tribunal held that the Pr.CIT's order was unjustified and a violation of natural justice as it ignored the assessee's explanations without proper deliberation. The Pr.CIT failed to deal with the assessee's contentions and the DR could not point out any infirmity in the explanation.

The Tribunal held that the CIT(A) erred by admitting additional evidence in appeal without allowing the AO an opportunity to examine or rebut it, which is contrary to Rule 46A(3) of the IT Rules. Therefore, the matter was set aside.

The Tribunal noted that while the assessee did not provide sufficient evidence before the lower authorities, the additional evidence submitted before the Tribunal appears to support the assessee's contentions. Therefore, the matter was remanded back to the AO for proper adjudication.

The Tribunal held that the assessee's failure to respond to notices was due to unavoidable circumstances and granted one more opportunity. The impugned orders were set aside, and the matters were restored to the CIT(Exemption) for fresh decisions.

The Tribunal permitted the assessee to withdraw its appeals. The reasoning was based on the assessee's written submission dated 02/04/2025, wherein the assessee explicitly sought permission to withdraw the appeals. The Revenue did not object to this request. Consequently, all four appeals filed by the assessee were dismissed as withdrawn. No other issues were decided, and the validity of the assessment order itself, or the grounds for challenging it, were not adjudicated upon by the Tribunal in these proceedings.

The Tribunal permitted the assessee to withdraw its appeals. The reasoning was based on the assessee's written submission dated 02/04/2025, wherein the assessee explicitly sought permission to withdraw the appeals. The Revenue did not object to this request. Consequently, all four appeals filed by the assessee were dismissed as withdrawn. No other issues were decided, and the validity of the assessment order itself, or the grounds for challenging it, were not adjudicated upon by the Tribunal in these proceedings.

The Tribunal permitted the assessee to withdraw its appeals. The reasoning was based on the assessee's written submission dated 02/04/2025, wherein the assessee explicitly sought permission to withdraw the appeals. The Revenue did not object to this request. Consequently, all four appeals filed by the assessee were dismissed as withdrawn. No other issues were decided, and the validity of the assessment order itself, or the grounds for challenging it, were not adjudicated upon by the Tribunal in these proceedings.

The Tribunal permitted the assessee to withdraw its appeals. The reasoning was based on the assessee's written submission dated 02/04/2025, wherein the assessee explicitly sought permission to withdraw the appeals. The Revenue did not object to this request. Consequently, all four appeals filed by the assessee were dismissed as withdrawn. No other issues were decided, and the validity of the assessment order itself, or the grounds for challenging it, were not adjudicated upon by the Tribunal in these proceedings.

The Tribunal held that the provisions of Section 194IA of the Act were not attracted. Regarding the second issue, the Tribunal relied on the decisions in Bhikhabhai H. Patel (supra) and Vinod Soni (supra), which held that the threshold of Rs.50 lakhs under Section 194IA(2) should be examined with reference to each transferee and each transferor individually. Since the payments to each seller were below Rs.50 lakhs (Rs.21,83,680/- and Rs.31,83,680/-), the assessee was not obliged to deduct tax. The Tribunal noted that the CIT(A) failed to consider the legal issue and applicable precedents. Consequently, the demand raised under Section 201(1) and 201(1A) was deleted. Other grounds, including those related to Section 2(14)(iii), were rendered redundant and not adjudicated.

The Tribunal set aside the impugned orders of both the AO and CIT(A) and restored the matter to the file of the Assessing Officer for de novo assessment. The Tribunal noted that both lower authorities had passed ex-parte orders due to consistent non-compliance by the assessee. However, considering the nature of the addition (cash deposits claimed to be school fee collections) and the assurance of cooperation, the Tribunal granted one final opportunity in the interest of substantial justice. The assessee is directed to fully cooperate and file all relevant documents. A cost of Rs.10,000/- is to be deposited by the assessee. The issue of deletion of the addition was not decided on merits but was remanded for fresh consideration.

The tribunal, considering the assessee's submission and the relevant CBDT Circulars, dismissed both appeals as withdrawn. The assessee was granted liberty to seek recall of this order and restoration of the appeals if Form No. 2 is not issued within the prescribed time limit or if the application under the VSV Scheme is rejected for any reason. The Departmental Representative did not object to the dismissal.

The Tribunal held that the assessee's failure to respond to notices was due to unavoidable circumstances and granted one more opportunity. The impugned orders were set aside, and the matters were restored to the CIT(Exemption) for fresh decisions.

The Tribunal held that the CIT's order under Section 263 was justified. The Supreme Court's decision in the assessee's own case and AUDA's case was applicable only to the specific assessment years before the court, and for other years, the interpretation of Section 2(15) by the Supreme Court needed to be examined based on the facts of each year.

The Tribunal held that the CIT(A) dismissed the appeal solely on the ground of delay without deciding on the merits. The assessee was not aware of online proceedings, leading to ex-parte assessment. The evidence filed by the assessee was not considered.

The Tribunal held that the CIT(A) was justified in deleting the addition of Rs. 8,00,00,000/- made under section 68 of the Act. The Tribunal found that the assessee, a partnership firm, had furnished all requisite documentary evidence, including PAN, ITR, audited financial statements, bank statements, confirmations, and ledger accounts, to substantiate the identity, genuineness, and creditworthiness of the partner, Goodfarms Calfcare LLP. The capital was received through banking channels and duly recorded in the books. The AO's decision to make the addition solely on the basis of the partner's non-response to a section 133(6) notice, without pointing out any defect in the evidence provided by the assessee, was considered insufficient. The Tribunal agreed with the CIT(A) that the assessee had discharged its initial onus, and in the absence of adverse material from the AO, the burden shifted to the Revenue, which was not discharged. The Tribunal also noted that the source of funds was traceable to the partner's holding company, Orbitol Investment Pvt. Ltd., a fact not refuted by the Revenue. The Tribunal distinguished the Revenue's cited precedent, Kailash Chand Agarwal v. ITO, on facts, as in the present case, all three components (identity, genuineness, creditworthiness) were duly established. The ratio is that a partnership firm cannot be subjected to addition under section 68 for capital introduced by a partner if the partner's identity, creditworthiness, and genuineness of the transaction are duly established through documentary evidence, and the Revenue fails to bring any adverse material on record.

The Tribunal held that the PCIT was justified in invoking revisionary powers under section 263. The primary ground for revision was the AO's allowance of deduction under section 35(2AB) without verifying the mandatory Form 3CL, which is a condition precedent for allowing the deduction. The PCIT correctly observed that the AO allowed the deduction mechanically without satisfying the statutory mandate. Furthermore, the AO allowed the deduction at 200% in contravention of the amended law, which restricted the weighted deduction to 150% of eligible expenditure from AY 2018-19 onwards. The Tribunal rejected the assessee's reliance on the 'two possible views' principle, stating this was a case of non-application of mind by the AO and failure to conduct requisite inquiry. The twin conditions for invoking section 263 – that the assessment order is erroneous and prejudicial to the revenue – were found to be satisfied. Accordingly, the PCIT's order setting aside the assessment order for de novo assessment was upheld.

The Tribunal held that the addition of Rs. 2,65,00,000/- made by the Assessing Officer (AO) under Section 69A of the Act was not sustainable. The assessment was framed ex parte, and although the assessee denied the transaction and requested cross-examination, the AO did not provide any independent corroborative material or allow cross-examination. For invoking Section 69A, the Revenue must establish the assessee's ownership or possession of unexplained money. In this case, there was no material to prove the existence of any actual transaction with the third party, Shri Pravin S. Shah, nor any evidence of money found in the assessee's possession or routed through its books. The entire addition was based on generalized third-party information lacking evidentiary value without corroboration. The Tribunal also held that Rule 46A of the IT Rules was not applicable as the assessee's submission was part of the assessment record, not fresh evidence before the CIT(A). The CIT(A) rightly appreciated the facts and legal position. The CIT(A)'s reliance on CBDT Circular No. 20 dated 07.07.1964, emphasizing the need for established ownership and unsatisfactory explanation after due inquiry, was also found appropriate. The AO failed to discharge the burden of proof. The Tribunal found no infirmity in the CIT(A)'s order deleting the addition.

The Tribunal condoned the delay in filing the appeals before the CIT(A), finding reasonable cause. It held that the quantum and penalty issues require reconsideration and set aside the CIT(A)'s orders. The matters were restored to the AO for fresh adjudication after affording the assessee an adequate opportunity of being heard.

The Tribunal condoned the delay in filing the appeals before the CIT(A), finding reasonable cause. It held that the quantum and penalty issues require reconsideration and set aside the CIT(A)'s orders. The matters were restored to the AO for fresh adjudication after affording the assessee an adequate opportunity of being heard.