ITAT Bangalore Judgments — April 2019

The Tribunal upheld the CIT(A)'s decision to delete the addition for guarantee commission, finding it covered by a previous co-ordinate bench ruling. Similarly, the addition for interest income was deleted, following precedent that such interest earned on government funds used for public welfare is not taxable income for the nodal agency.

The Tribunal, considering the assessee's illness and the need for justice, restored the issue to the AO for fresh adjudication. The AO was directed to consider the evidence filed and provide adequate opportunity for hearing.

The Tribunal held that the notice initiating penalty proceedings under section 274 r.w.s. 271(1)(c) was invalid because it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars, following the Karnataka High Court's decision in Manjunatha Cotton and Ginning Factory.

The Tribunal held that the CIT(Exemption) should have sought clarifications rather than rejecting the 80G application solely on the basis of missing dates and places, especially since 12AA registration was granted. The matter was restored to the CIT(Exemption) for fresh examination.

The Tribunal held that the delay of 3 days was not intentional or malafide and constituted sufficient cause. Following the principles laid down by the Supreme Court in MST Katiji, the Tribunal condoned the delay and set aside the CIT(A)'s order.

The Tribunal held that the unexplained liabilities of Rs. 5,00,000 for AY 2008-09 and Rs. 57,78,203 for AY 2010-11 were substantiated by the assessee and deleted the additions. The addition of Rs. 46,58,000 for AY 2009-10 on account of cash deposits was also deleted as unsustainable.

The Tribunal held that the penalty imposed was unsustainable because the show cause notice issued under Section 274 of the Act did not specify the exact charge against the assessee, i.e., whether it was for concealment of income or furnishing inaccurate particulars of income, as required by law.