ITAT Bangalore Judgments — May 2024

The Tribunal noted that Section 80P(2)(d) allows deduction for interest received from a co-operative society. However, it is crucial to determine if the payer bank is indeed a co-operative bank or a bank governed by the Banking Regulation Act, 1949, as per Supreme Court judgments. The issue of cost of funds for earning interest income was remitted back to the AO.

The Tribunal condoned the delay of 10 days in filing the appeal, citing sufficient cause and no malafide intention. However, on merits, the Tribunal noted that a subsequent assessment order dated 28.02.2024 (after the impugned order) computed income as per the assessee's declaration and that the assessee had opted for taxation under section 115BAA for the preceding year. Since the grievance was resolved by the subsequent order, the appeal was dismissed as academic.

The Tribunal condoned the delay in filing the appeal before the CIT(A), considering the explanation of the assessee as a reasonable cause and applying a liberal interpretation of 'sufficient cause'. On merits, the Tribunal noted that the issue regarding deductions u/s 80P(2)(a)(i) and (d) requires detailed verification.

The Tribunal held that the cash deposits made by members were genuine and the assessee had provided sufficient evidence regarding the identity and genuineness of the transactions. The AO erred in treating these deposits as unexplained investment under section 69A or as income under section 68 without proper verification. The assessee was eligible for deduction under section 80P(2)(a)(i).

The Tribunal held that the assessee was involved in a charitable activity and not solely for profit, and that the conditions of Section 249(4)(b) regarding admitted tax payment were not applicable. The Tribunal noted that the assessment was completed ex-parte and decided to examine the matter afresh.

The Tribunal restored the matter to the AO to determine if SCDCC Bank is a co-operative society. If it is, the interest income is eligible for deduction under Section 80P(2)(d). If not, the AO is to consider the deduction of cost of funds under Section 57.

The Tribunal found that both revenue authorities did not deal with the case appropriately and did not consider the assessee's requests. Therefore, the case was remitted back to the AO for fresh consideration.

The Tribunal held that Section 40(a)(i)/(ia) deals with disallowance of revenue expenditure, not capital expenditure. Since the assessee capitalized the software cost, the AO's disallowance of depreciation under this section was incorrect.

The Tribunal held that Section 40(a)(i)/(ia) is not applicable to capital expenditure like depreciation. It also allowed higher depreciation on server/network equipment based on its own prior decisions.

The Tribunal found that the disallowance based solely on the presence of nominal members was not in accordance with the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. The court held that loans to nominal members can qualify for deduction under Section 80P(2)(a)(i).

The Tribunal noted that Rule 128 of the I.T. Rules, which mandates timely filing of Form 67, was inserted effective 01.04.2017. For the assessment year 2015-16, there was no such requirement. Therefore, the CIT(Appeals) erred in disallowing the credit based on this rule.

The Tribunal held that Section 40(a)(i)/(ia) is not applicable to capital expenditure like depreciation. It also allowed higher depreciation on server/network equipment based on its own prior decisions.

The Tribunal held that Section 40(a)(i)/(ia) is not applicable to capital expenditure like depreciation. It also allowed higher depreciation on server/network equipment based on its own prior decisions.

The Tribunal held that Section 40(a)(i)/(ia) of the Income-tax Act applies to revenue expenditure and not capital expenditure. Since the assessee had capitalized the cost of software, the disallowance of depreciation under this section was incorrect.

The Tribunal held that Section 40(a)(i)/(ia) is not applicable to capital expenditure like depreciation. It also allowed higher depreciation on server/network equipment based on its own prior decisions.

The Tribunal held that the NFAC overlooked the adjournment letter and written submissions filed by the assessee, rendering the ex-parte order against the principles of natural justice. The Tribunal also noted that the due date for filing the return and audit report for AY 2018-19 was extended by the CBDT.

The Tribunal condoned the delay in filing the appeal, acknowledging it as a genuine mistake. The Tribunal noted that the Ld. Commissioner also failed to decide the issue properly due to lack of relevant documents/replies from the assessee.

The Tribunal held that Section 40(a)(i)/(ia) is not applicable to capital expenditure like depreciation. It also allowed higher depreciation on server/network equipment based on its own prior decisions.

The Tribunal noted the assessee's submission that non-response was not deliberate but due to bonafide reasons and hardship. Considering the interest of justice and equity, the Tribunal decided to provide one more opportunity to the assessee.

The tribunal held that the assessee should be given one more opportunity to represent their case. The issues were restored to the files of the CIT(A).

The Tribunal condoned the delay in filing the appeal after considering the reasons provided by the assessee. It was noted that the CIT(Appeals) had passed an ex-parte order without considering the assessee's adjournment petition and without going into the merits of the case. Therefore, the appeal was remitted back to the CIT(Appeals).

The Tribunal held that the assessee acted bona fide by paying additional taxes suo-moto before assessment proceedings began. The additions/disallowances were not due to concealment or inaccurate particulars at the time of filing the original return, and the assessee's explanation was not found to be false.

The Tribunal held that while Form 67 is required to be submitted before filing returns, this requirement is directory and not mandatory. The Tribunal further noted that Rule 128(9) does not provide for disallowance of FTC in case of delayed filing of Form 67. Moreover, DTAA provisions override the Act and Rules.

The Tribunal held that the issue of deduction on interest income from credit facilities provided to members and non-members requires fresh verification by the AO to determine the quantum of income attributable to each category. Regarding interest on investments, the Tribunal noted the assessee's submissions but found the applicability of a circular unclear, remanding the issue for further examination.

The Tribunal condoned the delay in filing the appeals before the CIT(A), holding that the delay was not willful or wanton but due to circumstances beyond the assessee's control, and that the principle of substantial justice should be preferred over technicalities. The Tribunal quashed the CIT(A)'s orders and remitted the matters back for fresh adjudication on merits.

The Tribunal condoned the delay in filing the appeals before the CIT(A), holding that the delay was not willful or wanton but due to circumstances beyond the assessee's control, and that the principle of substantial justice should be preferred over technicalities. The Tribunal quashed the CIT(A)'s orders and remitted the matters back for fresh adjudication on merits.

The Tribunal condoned the delay in filing the appeals before the CIT(A), holding that the delay was not willful or wanton but due to circumstances beyond the assessee's control, and that the principle of substantial justice should be preferred over technicalities. The Tribunal quashed the CIT(A)'s orders and remitted the matters back for fresh adjudication on merits.

The Tribunal condoned the delay in filing the appeals before the CIT(A), holding that the delay was not willful or wanton but due to circumstances beyond the assessee's control, and that the principle of substantial justice should be preferred over technicalities. The Tribunal quashed the CIT(A)'s orders and remitted the matters back for fresh adjudication on merits.

The Tribunal condoned the delay in filing the appeals before the CIT(A), holding that the delay was not willful or wanton but due to circumstances beyond the assessee's control, and that the principle of substantial justice should be preferred over technicalities. The Tribunal quashed the CIT(A)'s orders and remitted the matters back for fresh adjudication on merits.

The Tribunal noted that the CIT(A) dismissed the appeals due to the inordinate delay without adjudicating on merits. The Tribunal found that the assessee's explanation for the delay, including a bonafide belief in their representative's action, constituted a reasonable cause.

The Tribunal condoned the delay in filing the appeals before the CIT(A), holding that the delay was not willful or wanton but due to circumstances beyond the assessee's control, and that the principle of substantial justice should be preferred over technicalities. The Tribunal quashed the CIT(A)'s orders and remitted the matters back for fresh adjudication on merits.

The Tribunal held that the assessee failed to establish a 'sufficient cause' for the belated filing of the appeal, as the explanation provided was vague and lacked specific details. Therefore, the appeal was dismissed in limine.

The Tribunal condoned the delay in filing the appeals before the CIT(A), holding that the delay was not willful or wanton but due to circumstances beyond the assessee's control, and that the principle of substantial justice should be preferred over technicalities. The Tribunal quashed the CIT(A)'s orders and remitted the matters back for fresh adjudication on merits.

The Tribunal held that the ratio of the Supreme Court in the case of Citizen Co-operative Society Ltd. is not applicable to the present assessee, as the assessee is a co-operative society registered under the Karnataka Co-operative Societies Act and not a mutually aided co-operative society functioning like a bank with RBI approval. The Tribunal also referred to the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. regarding the applicability of mutuality principles.

The Tribunal condoned the delay in filing the appeals before the CIT(A), holding that the delay was not willful or wanton but due to circumstances beyond the assessee's control, and that the principle of substantial justice should be preferred over technicalities. The Tribunal quashed the CIT(A)'s orders and remitted the matters back for fresh adjudication on merits.

The Tribunal condoned the inordinate delay in filing the appeals, prioritizing substantial justice over technicalities. It held that the assessee's belief that appeals were filed by their representative constituted a sufficient cause for the delay.

The Tribunal held that if the investments were made compulsorily as per the Karnataka Co-operative Societies Act and Rules, the interest income would be considered business income eligible for deduction under Section 80P(2)(a)(i). If considered 'income from other sources', deductions under Section 57 would be allowable.

The Tribunal held that the addition made under section 68 was not proper as the assessee had provided details of depositors and transactions were found to be with members. The Tribunal also held that the assessee is not eligible for deduction under section 80P(2) because it failed to file a return of income, which is a prerequisite for claiming such deductions.

The Tribunal held that the AO failed to specify which limb of Section 270A was attracted and how the ingredients of sub-section (9) were satisfied. The Tribunal quashed the penalty order and directed the AO to consider the assessee's application for immunity from penalty under Section 270AA.

The Tribunal held that the rejection by the CIT(E) was not justified in light of CBDT Circular No. 07/2024, which extended the due date for filing applications. The Tribunal noted that the assessee had initially filed the application within the correct time frame but it was rejected for selecting the wrong section code, and a revised application was filed later.

The tribunal observed that the assessee, not well-versed in online proceedings, failed to notice the notices and respond. Consequently, the issue of granting deduction under Section 54F was remitted back to the NFAC for reconsideration.

The Tribunal held that the NFAC ought to have verified the additional details filed by the assessee by calling for a remand report from the AO, which was not done. Therefore, the issue needs to be reconsidered.

The Tribunal held that the AO failed to specify which limb of Section 270A was attracted and how the ingredients of sub-section (9) were satisfied. The Tribunal quashed the penalty order and directed the AO to consider the assessee's application for immunity from penalty under Section 270AA.

The Tribunal held that the eligibility for deduction under Section 80P(2)(d) on interest from co-operative banks requires clarification regarding the nature of the payer bank. It also directed the Assessing Officer to determine the cost of funds for earning interest income, allowing for a deduction of expenses.

The Tribunal noted that grounds 3 & 4 concerning disallowances of Rs. 25,00,000/- and Rs. 27,72,490/- were not decided by the CIT(A). The Tribunal also considered the assessee's submission that loans were given for constructing a nursing college. In the interest of justice, the Tribunal remitted the issue of loans and exemption under Section 11 to the CIT(A) for fresh consideration.

The Tribunal acknowledged the delay and the assessee's personal circumstances. It noted that the Ld.CIT(A) had issued limited opportunities for hearing. Applying principles of natural justice, the Tribunal decided to condone the delay and remand the appeals.

The Tribunal held that the CIT(A) did not provide adequate opportunity to the assessee to present their case. The assessee's reasons for delay and non-appearance were considered plausible, warranting a fresh opportunity.

The Tribunal held that the eligibility for deduction under Section 80P(2)(d) on interest from co-operative banks requires clarification regarding the nature of the payer bank. It also directed the Assessing Officer to determine the cost of funds for earning interest income, allowing for a deduction of expenses.

The Tribunal held that the disallowance for employer's contribution paid within the extended due date for filing the return is not warranted. However, the disallowance for employees' contribution to PF/ESI, as per the audit report, is upheld.

The Tribunal acknowledged the delay and the assessee's personal circumstances. It noted that the Ld.CIT(A) had issued limited opportunities for hearing. Applying principles of natural justice, the Tribunal decided to condone the delay and remand the appeals.