ITAT Bangalore Judgments — January 2025

The Tribunal held that the High Court's decision regarding the quashed notices was binding. It also held that the cash seized belonged to the assessee and was rightly treated as advance tax. For the disallowance of PF & ESI contributions, it was held that since the amounts were deposited beyond the due date, the deduction was not allowable, following a Supreme Court judgment.

The Tribunal held that the issue is whether Form 10-IE filed belatedly can be considered during processing under Section 143(1). Although the form was available, the CPC did not consider it due to the delay in filing. The CIT(A) dismissed the appeals due to limitation.

The Tribunal held that the cash seized from the assessee's premises belonged to the assessee and had been accepted by the revenue as advance tax, thus allowing the appeal for ITA No.196/Bang/2022. For ITA No.105/Bang/2022, the Tribunal dismissed the appeal on merits regarding the disallowance of employees' contribution to PF & ESI paid after the due date, citing a Supreme Court judgment. The appeal for ITA No.736/Bang/2022 was dismissed as infructuous.

The Tribunal held that the cash found during the search belonged to the assessee and was correctly offered as advance tax, allowing the appeal related to this issue. For the PF & ESI contribution issue, the Tribunal dismissed the appeal on merits, citing a Supreme Court judgment and the non-applicability of section 143(1D) for the relevant assessment year.

The Tribunal noted the assessee's request for withdrawal due to opting for settlement under the VSV Scheme. Considering the request and the quantification of tax, the Tribunal dismissed the appeal as withdrawn.

The Tribunal held that the issue of capital gains and business income from the JDA had already attained finality in a previous round of litigation. Therefore, the Revenue's appeal on this issue was not maintainable. The Tribunal also noted that the issue of disallowance under Section 14A was remanded to the CIT(A) for fresh adjudication.

The Tribunal held that the CIT(Exemptions) erred in referring to Section 80G(2) instead of Section 80G(5) for considering the grant of registration. The Tribunal found that the assessee fulfilled all conditions prescribed under Section 80G(5) and the activities were genuine and charitable in nature.

The Tribunal held that the seized documents (diaries and loose sheets) were 'dumb documents' without sufficient corroborative evidence to establish their veracity, the nature of transactions, or their connection to the assessee's income. It emphasized that the burden of proof rested with the department to establish real income, not merely rely on presumptions or speculative interpretations. Consequently, all substantive and protective additions made by the AO on account of these entries and unexplained jewellery were deleted, as the department failed to meet the evidentiary requirements.

The Tribunal dismissed the appeal as withdrawn, noting that the tax payment had been quantified under the Vivad Se Vishwas Scheme. The assessee was given the liberty to file a fresh appeal if the issue remains unresolved under the scheme.

The Tribunal held that the AO's invocation of Rule 8D was not justified as no dissatisfaction with the assessee's suo motu disallowance was recorded, violating Section 14A(2). Regarding TDS, the Tribunal found the CIT(A) order to be non-speaking and lacking reasoning, remitting the issue for fresh adjudication. The appeals were partly allowed.

The Tribunal noted that the addition of the entire sale consideration as unexplained money under Section 69A was not correct, even though the assessee had not responded to notices. The Tribunal set aside the orders of the AO and CIT(A) and remitted the matter back to the AO for fresh assessment.

The Tribunal held that the AO's invocation of Rule 8D was invalid as there was no recorded dissatisfaction with the assessee's suo-motu disallowance, citing the Bombay High Court's ruling. The Tribunal also found that the CIT(A)'s order was non-speaking and lacked reasoning, remitting the matter for fresh adjudication.

The Tribunal noted that the assessee claimed to have filed a belated return and that notices were not seen by them. Considering the facts and in the interest of justice, the Tribunal remitted the issue back to the AO for denovo consideration.

The Tribunal noted a significant delay in filing the appeal and observed that the reasons provided by the assessee, related to obtaining approval from higher authorities and routine procedural delays, did not constitute sufficient cause for condoning the delay. Relying on Supreme Court judgments, the Tribunal held that negligence and lack of due diligence by government officials are not grounds for condoning delay.

The Tribunal held that the CIT(Appeals) did not provide a proper opportunity for hearing and observed that not all credits could be treated as unexplained without cogent material. The Tribunal restored the matter to the CIT(Appeals) for fresh adjudication.

The Tribunal noted that the assessee had filed under the DTVSV scheme and obtained Form-2. Since the matter was being resolved under this scheme, the Tribunal found no purpose in keeping the appeal pending and accordingly dismissed it.

The Tribunal, considering the assessee's request and the settlement under the VSV Scheme, dismissed the appeal as withdrawn, granting liberty to revive it if the issue is not resolved.

The Tribunal held that the issue is whether Form 10-IE filed belatedly could be considered during processing. It found that the form was available to the CPC before the intimation was sent, and the dismissal by CIT(A) on limitation grounds prevented the assessee from being heard on merits.

The Tribunal condoned the delay in filing the appeal. For the mismatch in turnover, the issue was remitted back to the AO for reconciliation. For commission expenses, the matter was also remitted to the AO for fresh consideration due to contradictory claims and lack of documentary evidence.

The Tribunal observed that the assessee could not represent the case before the AO due to lack of awareness of online notices and procedures, leading to an ex-parte assessment. The CIT(A) dismissed the appeal due to delay without condoning it. In the interest of justice, the Tribunal remitted the entire issue to the AO for de-novo consideration.

The Tribunal held that the compensation paid to clear title disputes constituted a valid cost of improvement, citing a jurisdictional High Court judgment which recognized such payments as expenditure necessary to obtain a clear title. However, as the additional evidence was not presented to the AO during assessment, the Tribunal remitted the issue back to the AO to verify the documents and grant the allowances in accordance with law.

The Tribunal allowed the condonation of delay, stating that the delay was unintentional and bona fide, and that denying condonation would defeat the purpose of the VSV Scheme. The Tribunal held that the CIT(A) failed to adequately consider the judicial precedents cited by the assessee and directed a fresh adjudication.

The Tribunal held that the assessment orders were passed without adhering to the principles of natural justice as the assessee did not receive the notices. The Tribunal set aside the orders of the AO and CIT(A) and remitted the issue back to the AO for fresh adjudication.

The Tribunal held that the documents submitted indicated the assessee had commenced activities, and the previous authority's decision was based on incomplete verification. Therefore, both matters were restored to the CIT(Exemptions) for fresh examination.

The Tribunal held that the documents submitted showed the assessee had commenced activities, and the matter should be restored to the CIT(Exemptions) for fresh examination of both applications. The CIT(E) was directed to afford sufficient opportunities to the assessee.

The Tribunal condoned the delay, finding it to be genuine and beyond the assessee's control. The Tribunal held that the rejection of the application by the PCIT(E) was not justified due to insufficient reasons and lack of concrete evidence, and that the delay in filing should not be a sole ground for rejection.

The Tribunal held that the presence of nominal members does not disentitle a cooperative society from claiming deduction under Section 80P(2)(a)(i), provided it is not functioning as a commercial bank. For income from statutory deposits, the issue was restored to the AO to verify if such deposits were compulsory. The disallowance of provisions was allowed to be considered for deduction under Section 80P(2)(a)(i).

The Tribunal held that as per Section 71(2) of the Act, the assessee has the option to set off business losses against capital gains. The CPC's adjustment violated principles of natural justice as it was made without affording an opportunity to be heard. The Tribunal set aside the CPC's adjustment and directed to accept the assessee's original computation.

The Tribunal condoned the delay in filing the appeal, stating that the reasons provided were genuine and beyond the assessee's control. It held that the classification of income should be based on the substance of the activity rather than procedural compliance, and the AO was directed to re-examine the nature of the activity and the applicability of Section 44AD.

The Tribunal held that the assessee had provided valid reasons for the delay in filing the appeal, attributing it to her participation in assembly elections and the oversight by her professionals. The CIT(A) erred in dismissing the appeal on technical grounds without considering the merits.

The Tribunal held that the presence of nominal members does not disqualify the assessee from deduction under Section 80P(2)(a)(i), relying on Supreme Court judgments. The issue of interest income from bank deposits was remitted to the AO for determination of its attributability to business.

The Tribunal held that a delay in the verification of the return, which is a procedural formality, should not lead to the denial of a legitimate deduction, especially when the return was filed within the prescribed time. The delay was considered a technical default, not a willful non-compliance.

The Tribunal held that the disallowance under Section 40A(3) was made based on material gathered during assessment proceedings, not during the search, making the assumption of jurisdiction under Section 153A questionable. The Tribunal also noted issues with the extrapolation of disallowance and the violation of natural justice.

The Tribunal held that the requirement to file Form 67 is directory and not mandatory. The disallowance of FTC solely on account of a procedural lapse, especially when Form 67 was filed before the completion of assessment and DTAA provisions override domestic law, would defeat the purpose of avoiding double taxation. The CPC's action also violated principles of natural justice.

The Tribunal held that the assessee is eligible for deduction under Section 80P(2)(a)(i) even if associate/nominal members exceeded the limit, as long as the society is registered under the Karnataka Co-operative Societies Act and business is conducted with its members. The Tribunal also upheld the deletion of addition under Section 68, stating that the cash deposits of SBNs were explained as member deposits and properly recorded, not constituting unexplained cash credit.

The Tribunal condoned the delay in filing the appeal, citing genuine and practical mistakes beyond the assessee's control, applying principles of natural justice. The Tribunal found that the PCIT(E) did not provide sufficient reasons for rejecting the application for registration and also that the rejection of the 80G application was based on a technicality that was addressed by subsequent CBDT circulars extending timelines.

The Tribunal held that the assessee had sufficient cash in hand from previous years' agricultural and other income to justify the deposits. The onus was on the Revenue to prove otherwise, which they failed to do.

The Tribunal held that the lower authorities failed to consider the provisions of Section 40(a)(ia) and Section 201(1) proviso, as well as the Form 26A submitted by the assessee. The disallowance made under Section 154 was deemed inappropriate as it required detailed reasoning and verification of facts. The Tribunal set aside the orders and remitted the issue back to the AO.