ITAT Bangalore Judgments — August 2024

The Tribunal acknowledged the assessee's genuine difficulties and the mental agony caused by the circumstances, finding a reasonable cause for her non-appearance. It granted one more opportunity for the assessee to appear before the AO and present her case.

The Tribunal condoned the delay of 39 days, citing the circumstances and the principles laid down by the Supreme Court in Collector, Land Acquisition vs. MST Katiji & Ors, prioritizing substantial justice over technicalities. The Tribunal also noted that the ADDL/JCIT(A) had not adjudicated the issue on merits and had confirmed the AO's order based on non-response to email notices, despite the assessee having indicated they preferred physical notices. Therefore, the case was remitted back to the ADDL/JCIT(A) for fresh adjudication.

The Tribunal acknowledged the assessee's genuine difficulties and the mental agony caused by the circumstances, finding a reasonable cause for her non-appearance. It granted one more opportunity for the assessee to appear before the AO and present her case.

The Tribunal acknowledged the assessee's genuine difficulties and the mental agony caused by the circumstances, finding a reasonable cause for her non-appearance. It granted one more opportunity for the assessee to appear before the AO and present her case.

The Tribunal noted the assessee's representative's plea of unforeseen personal challenges and a change in consultant. Considering these circumstances, the Tribunal decided to remit the issue back to the CIT(A) to provide the assessee with a fair opportunity for hearing and submission of documents. The CIT(A) was also given liberty to pass an order in accordance with law if the assessee failed to cooperate in the second round.

The Tribunal held that the issue of repayment of loan as application of income needs to be examined afresh by the AO. If the cost of assets acquired from loan funds was already allowed as application of income, then repayment of the loan should not be allowed. Conversely, if the cost was not allowed, then repayment could be.

The Tribunal condoned the delay in filing the appeal for AY 2017-18, finding sufficient cause. For AY 2017-18, the issue of pigmy commission disallowance was remitted to the AO for verification. For AY 2020-21, the issue of interest income was restored to the AO to allow the cost of funds.

The Tribunal noted that the crucial issue was whether the cost of the assets on which depreciation was claimed had previously been allowed as an application of funds. This factual aspect needed examination by the Assessing Officer (AO).

The Tribunal held that the disallowance under section 35(2AB) should be restricted to the extent of DSIR approval, and the remaining expenses are allowable as business expenses. It also held that disallowance under section 14A is not permissible in the absence of exempt income. The disallowance for non-deduction of TDS was deleted as TDS was deducted where applicable.

The Tribunal condoned the delay in filing the appeal for AY 2017-18, finding sufficient cause. For AY 2017-18, the issue of pigmy commission disallowance was remitted to the AO for verification. For AY 2020-21, the issue of interest income was restored to the AO to allow the cost of funds.

The Tribunal noted that the crucial issue was whether the cost of the assets on which depreciation was claimed had previously been allowed as an application of funds. This factual aspect needed examination by the Assessing Officer (AO).

The Tribunal allowed the appeal regarding payments made to headquarters for services received, stating that the genuineness of expenses is key, not necessarily the immediate benefit. Other grounds were allowed for statistical purposes or remanded.

The Tribunal held that the amendment to Section 115BBE, enhancing the tax rate from 30% to 60% effective from 1.4.2017, is applicable for AY 2017-18. The Tribunal noted that this amendment enhanced the rate rather than creating a new liability, and thus applies from the commencement of the assessment year.

The Tribunal, relying on the Supreme Court's judgment in Collector, Land Acquisition Vs. MST Katiji, held that substantial justice should be preferred over technical considerations. The Tribunal condoned the 34-day delay, considering the reasons provided by the assessee as sufficient.

The Tribunal held that the intimation passed under section 143(1)(a) was bad in law because a notice under section 143(2) had already been issued, making the processing under section 143(1) unnecessary. The merits of the additions made in the 143(1) intimation were considered academic.

The Tribunal held that interest earned by the assessee society from deposits made with co-operative banks as per the Karnataka State Cooperative Rules 1960 is eligible for deduction under Section 80P(2)(a)(i) as it constitutes business income. The disallowance of Rs. 33,52,411 by the AO for provisions made for interest expenses was considered tax neutral, and the CIT(A)'s directions for calculating tax under MAT were found to be without infirmity.

The Tribunal held that the CIT(A) was correct in deleting the addition as the assessee had provided details and evidence showing the income was already declared in their financial statements and ITR-6. The Revenue failed to produce contra-evidence to challenge the CIT(A)'s order.

The Tribunal admitted additional evidence showing government grants were provided to cover the guarantee commission. It found these documents relevant and decided to remand the issue back to the Assessing Officer for fresh consideration.

The Tribunal noted that the AO did not specify under which limb of Section 270A the penalty was being imposed, nor did they provide sufficient reasons for invoking Section 270A(9). Citing relevant High Court judgments, the Tribunal held that the penalty order was arbitrary and that the assessee's actions did not constitute misreporting of income warranting penalty under Section 270A.

The Tribunal held that the CIT(A) erred by condoning the delay initially and then dismissing the appeal on limitation grounds in the final order. The Tribunal also found the assessee's explanation for the delay to be reasonable.

The CIT(A) dismissed the assessee's claim, stating that the original cause of action arose at the stage of proceedings under Section 143(1), not Section 154, and therefore the appeal against the Section 154 order was not maintainable. The Tribunal disagreed, opining that the CIT(A) should have considered the assessee's claims on merits.

The Tribunal observed that for some creditors, confirmations were available but lacked PAN. It noted that the names and addresses of creditors were available, and authorities could have verified them further. The Tribunal also noted that for a subsequent assessment year, similar opening balances of creditors were not disputed. Therefore, the Tribunal deleted the addition of Rs. 90,79,528 and Rs. 29,60,099.

The Tribunal rejected the grounds related to the limitation period for issuing the notice and the moratorium under the Insolvency & Bankruptcy Code. However, it remitted the issue of additions on merits back to the AO for de novo consideration.

The Tribunal held that the law applicable for the assessment year in question should be considered, not the residential status at the time of issuing the notice. Since the assessee was a resident for AY 2016-17, they were not an 'eligible assessee' under Section 144C(15)(b) for the proceedings. Therefore, the entire proceedings initiated under the non-resident status were not sustainable.

The Tribunal found that notices were sent to an incorrect email ID, and the assessee's email ID was available in the profile. The assessee also explained that the assessment order came to their knowledge late due to unfamiliarity with e-filing. Therefore, there was sufficient reason for the assessee's non-appearance.

The Tribunal held that since the CIT(A)'s order was ex-parte, an opportunity should be given to the assessee. The issue of addition under Section 69A r.w.s. 115BBE was restored to the AO for examination of the genuineness of cash deposits, with a clarification that the addition should not be reiterated solely on the ground that the assessee is not a specified person to accept demonetized currency.

The Tribunal condoned the 28-day delay in filing the appeals, considering the explanation to be reasonable and not willful, especially in light of the COVID-19 pandemic's impact. The appeals were remitted back to the CIT(A) for adjudication on merits, subject to the assessee paying a cost of Rs. 5,000/- per year.

The Tribunal admitted additional evidence showing government grants were provided to cover the guarantee commission. It found these documents relevant and decided to remand the issue back to the Assessing Officer for fresh consideration.

The Tribunal condoned the 28-day delay in filing the appeals, considering the explanation to be reasonable and not willful, especially in light of the COVID-19 pandemic's impact. The appeals were remitted back to the CIT(A) for adjudication on merits, subject to the assessee paying a cost of Rs. 5,000/- per year.

The Tribunal held that the Assessing Officer (AO) was not justified in making additions without any incriminating material found during the search. The assessee had filed his return under section 139(1) before the search, and no assessment was pending. The time limit for issuing a notice under section 143(2) had also expired.

The Tribunal held that notices were sent to the assessee's email despite his explicit instruction not to do so, leading to a lack of knowledge about hearing dates. Therefore, the principles of natural justice were violated.

The Tribunal held that in cases where substantial justice and technical considerations are pitted against each other, substantial justice should be preferred. Condoning the delay would prevent unjust enrichment to the state and uphold the principle that government cannot retain tax not authorized by law. The Tribunal relied on the Supreme Court's judgment in Collector, Land Acquisition v. Mst. Katiji and Ors.

The Tribunal noted that the land acquisition was done by BMRCL through KIADB for a metro rail project as per the KIAD Act and the award was fixed by mutual consent. The Tribunal referred to the judgment in Bangalore Metro Rail Corporation Ltd. v. M/s. Sri Balaji Corporate Services and Others and other High Court judgments, holding that compensation received under mutual agreement is not liable for income tax.

Regarding the TDS issue, the Tribunal held that Section 194J has a threshold limit of Rs. 30,000, and the audit fee of Rs. 14,100 was below this limit, thus no disallowance was warranted. Concerning the demonetization period cash deposit, the Tribunal noted that while SBNs were demonetized, they could still be exchanged until the appointed date, provided a source was established.

The Tribunal noted that the assessee failed to comply with notices from the AO and CIT(A), resulting in ex-parte decisions. However, considering the assessee's undertaking to cooperate and the reason for non-appearance, the Tribunal decided to provide one more opportunity.

The Tribunal noted that the reasons for the delay in filing the appeal before the FAA were submitted for the first time before the ITAT. Therefore, the Tribunal decided to remit the issue of delay to the FAA for fresh consideration. The FAA is directed to dispose of the appeal within six months after providing the assessee with a reasonable opportunity to be heard.

The Tribunal condoned the delay, acknowledging the bona fide reasons presented by the assessee's counsel. The Tribunal observed that the CIT(A) failed to establish the service of hearing notices, and the assessee's demise contributed to the non-compliance.

The FAA dismissed the appeal due to the delay without considering the merits. The Tribunal noted that the assessee had reasonable cause for the delay and condoned it. The Tribunal decided to send the matter back to the AO for fresh consideration.

The Tribunal modified the direction of the PCIT for a de-novo assessment. The AO was directed to frame the assessment without being influenced by the PCIT's direction and to consider the assessee's contentions based on documentary evidence.

The Tribunal held that entities registered under the Karnataka Souharda Sahakari Act 1997 are at par with those registered under the Karnataka Cooperative Societies Act 1959, and thus eligible for deduction u/s 80P. Regarding demonetized currency deposits, the Tribunal held they cannot be treated as unexplained money solely due to being accepted post-demonetization.

The Tribunal condoned the delay in filing the appeal and, considering the interest of justice, remitted the issue back to the CIT(Appeals) for fresh consideration. The assessee was directed to cooperate and provide necessary documents.

The Tribunal noted that the assessee's explanation for the delay, though potentially influenced by wrong advice from a tax consultant and cash shortage due to seizure, was not entirely unreliable. The Tribunal found sufficient cause for the delay.

The Tribunal held that the assessee's non-appearance was not due to their fault, as notices were sent to an email address they had explicitly requested not to be used. Therefore, the case was remanded to the CIT-A for a fresh adjudication.

The Tribunal held that the assessee's non-appearance was not due to their default, as notices were sent contrary to their explicit instruction. Therefore, the assessee was granted one more opportunity to represent their case before the CIT-A.

The Tribunal, through this corrigendum, has corrected Para 8 of the original order. The corrected statement now clearly mentions that the appeal by the revenue is allowed for statistical purposes.

The Tribunal noted that although the assessee was aware of the proceedings, the notices were sent to an email ID where communication was explicitly prohibited. Given the circumstances and the request of the AR, the Tribunal decided to provide one more opportunity to the assessee.

The Tribunal held that since the reassessment proceedings under Section 147 were the first assessment proceedings for the assessee, they were de-novo. Therefore, the assessee was entitled to make fresh claims, including the refund of excess TDS credit.

The Tribunal held that since the reassessment proceedings under Section 147 were the first assessment proceedings for the assessee, they were de-novo. Therefore, the assessee was entitled to make fresh claims, including the refund of excess TDS credit.

The Tribunal, relying on the Supreme Court's decision in Collector Land Acquisition Vs. Mst. Katiji & Ors., found sufficient and reasonable cause for the delay. The Tribunal condoned the delay in filing the appeals for both assessment years.

The Tribunal held that since the reassessment proceedings under Section 147 were the first assessment proceedings for the assessee, they were de-novo. Therefore, the assessee was entitled to make fresh claims, including the refund of excess TDS credit.