ITAT Bangalore Judgments — January 2025

The Tribunal noted that the assessees wished to withdraw the impugned appeals in light of the DTVSV settlement and Form 2 issuance. Consequently, all three appeals were treated as withdrawn and dismissed.

The Tribunal noted that the assessees wished to withdraw the impugned appeals in light of the DTVSV settlement and Form 2 issuance. Consequently, all three appeals were treated as withdrawn and dismissed.

The Tribunal addressed the grounds as follows: Regarding Ground 1 (Limitation): The judgment does not explicitly record a finding on this ground. The operative part of the order focuses on other grounds. Regarding Ground 2 (Transfer Pricing Adjustments - EDS Segment): The Tribunal directed the TPO to conduct a fresh TP study after including M/s. Satyam Venture Engineering Service Pvt. Ltd. as a comparable. The Tribunal noted that if this comparable alone is included, the assessee would achieve the desired Arm's Length Price (ALP), making the inclusion of other comparables academic. The Tribunal also directed the TPO to recompute the profit margins of Mahindra & Genesis by including bad debts as operating expenses, as per the DRP's directions which the TPO failed to follow. This was in line with the decision in Hitachi Energy Technology. The Tribunal noted that the DRP's directions are binding on the AO/TPO under Section 144C(10). Regarding Ground 3 (Interest on Delayed Receivables): The Tribunal held that LIBOR + 200 basis points is legally justifiable for interest on delayed receivables, accepting the assessee's concession. The assessee agreed not to press the issue of whether this constituted an international transaction. This ground was partly allowed. Regarding Ground 4 (Audit Fees - Section 40(a)(i)): The Tribunal held that although the issue did not strictly arise from the present proceedings, the proceedings under Section 143(1) merge with the assessment order under Section 143(3). Therefore, in the interest of justice and to avoid multiplicity of proceedings, the AO was directed to expeditiously dispose of the assessee's application under Section 154.

The Tribunal held that interest income earned from deposits with co-operative banks and financial institutions, where such deposits were not mandated by statute for maintaining fluid resources, does not fall under 'profits and gains of business' for deduction under Section 80P. However, it directed the AO to verify if interest was earned from investments with other co-operative societies, in which case deduction under Section 80P(2)(d) might be allowable. If the income is treated as 'income from other sources', relief under Section 57 is to be considered.

The Tribunal held that interest income earned from deposits with co-operative banks and financial institutions, where such deposits were not mandated by statute for maintaining fluid resources, does not fall under 'profits and gains of business' for deduction under Section 80P. However, it directed the AO to verify if interest was earned from investments with other co-operative societies, in which case deduction under Section 80P(2)(d) might be allowable. If the income is treated as 'income from other sources', relief under Section 57 is to be considered.

The Tribunal dismissed the Revenue's appeal, affirming that adjustments under Section 143(1) cannot be made without discussing merits or providing notice, and confirmed that the ICDS adjustment and denial of Section 80JJAA deduction were not justifiable. It allowed the assessee's cross-objection, holding that the intimation issued under Section 143(1) by the CPC, without prior notice for adjustments, violated principles of natural justice and was illegal and bad in law.

The Tribunal noted that the assessees wished to withdraw the impugned appeals in light of the DTVSV settlement and Form 2 issuance. Consequently, all three appeals were treated as withdrawn and dismissed.

The Tribunal held that the filing of Form 67 is directory in nature and the assessee should have been allowed foreign tax credit as it was filed during the pendency of the appeal. The Tribunal also directed the AO to allow the carry forward of losses after verification.

The Tribunal condoned the delay of 266 days, noting a reasonable cause for the delay due to the insolvency proceedings. It was also held that the CIT(A) had passed an ex-parte order without dealing with the merits of the case, and therefore, the matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the provision for interest expenses is eligible for deduction as the assessee followed the accounting method prescribed under the Karnataka Co-operative Societies Rules. The Tribunal also deleted the addition made in respect of the excess provision of interest. For other provisions (bad debts, pension fund, registration), the matter was remitted to the AO for consideration of CBDT Circular No. 37/2016.

Considering this as the second round of litigation and the significant time elapsed since the assessment year, the Tribunal restricted the total disallowances to 5% of the total expenses claimed (Rs. 6,70,15,079/-). This resulted in a restricted disallowance of Rs. 33,50,754/-, without delving further into the specific merits of each disallowance, in the interest of justice.

The Tribunal held that the reassessment proceedings were initiated after the expiry of 4 years from the end of the assessment year, making it barred by time as per the first proviso to Section 147 of the Act. It was also found that the assessee had made full and true disclosures, and the reopening was based on a mere change of opinion by the AO.

The Tribunal held that only the profit element of suppressed sales should be added, applying the GP ratio. Regarding cash deposits, it was held that these represented business turnover, and only the profit element should be taxed. Additions based solely on bank stock statements without corroborative evidence were dismissed.

The Tribunal held that only the profit element of suppressed sales should be added, applying the GP ratio. Regarding cash deposits, it was held that these represented business turnover, and only the profit element should be taxed. Additions based solely on bank stock statements without corroborative evidence were dismissed.

The Tribunal held that the AO failed to establish the conditions for levying penalty under Section 270A, specifically by not specifying the exact clauses of misreporting and not properly communicating the charges to the assessee. The Tribunal also noted that the income was accepted based on estimation, and the assessee's explanation was bonafide.

The Tribunal found that the assessee, despite having filed an appeal before the CIT(A)/NFAC, failed to pursue it for five years. However, considering the assessee's submission of being a homemaker and computer-un-savvy, the Tribunal granted one more opportunity.

The Tribunal condoned the delay due to the reasonable cause presented. Observing that the assessee had expired before the CIT(A) passed its order, the Tribunal remitted the matter back to the CIT(A) for fresh adjudication, with a direction to provide a proper opportunity to the legal heir.

The Tribunal held that nominal members are indeed members of the society as per the Karnataka Co-operative Societies Act and the society's byelaws. Following the Supreme Court's judgment, the interest earned from loans given to nominal members qualifies for deduction under section 80P(2)(a)(i). The issue regarding disallowances for gratuity and legal fees was remitted to the AO for fresh consideration in light of CBDT Circular No. 37/2016.

The Tribunal ruled that an assessee is entitled to TDS credit if the corresponding income has been offered for taxation. It remanded the matter to the jurisdictional Assessing Officer (AO) to verify the assessee's claim and allow the TDS credit if the corresponding income has been taxed, after providing adequate opportunities.

The Tribunal found that the CIT(A) had not properly considered all contentions and materials. Therefore, the matter was remitted back to the CIT(A) for a fresh examination in light of Supreme Court and High Court judgments.

The Tribunal held that the CIT(A) erred in dismissing the appeal for not being maintainable under Section 249(4) as the assessee's income was claimed to be exempt, thus not liable for advance tax. The Tribunal further held that the dismissal on merits was also unsustainable and remitted the issue back to the CIT(A) for fresh consideration.

The Tribunal restored the issue of crop and tree cut compensation to the AO for fresh verification of details and genuineness. Regarding the provision for obsolescence, the Tribunal directed the AO to examine whether it was a provision or a write-off and to decide afresh, considering the principle of consistency with prior years.

The Tribunal restored the issue of crop and tree cut compensation to the AO for fresh verification of details and genuineness. Regarding the provision for obsolescence, the Tribunal directed the AO to examine whether it was a provision or a write-off and to decide afresh, considering the principle of consistency with prior years.

The Tribunal held that there was a reasonable and sufficient cause for the delay in filing the appeal before the CIT(A)/NFAC. The Tribunal directed the CIT(A)/NFAC to condone the delay and remit the entire issues in dispute back to the CIT(A)/NFAC for adjudication on merits, after providing a reasonable opportunity of being heard.

The Tribunal restored the issue of crop and tree cut compensation to the AO for fresh verification of details and genuineness. Regarding the provision for obsolescence, the Tribunal directed the AO to examine whether it was a provision or a write-off and to decide afresh, considering the principle of consistency with prior years.

The Tribunal condoned the delay of 505 days, finding a "sufficient cause" for the belated filing, primarily due to the issue with communication from the previous tax consultant. The Tribunal then restored the entire issues in dispute to the file of the Assessing Officer for denovo consideration on merits, providing the assessee one more opportunity.

The Tribunal condoned the delay, citing the mistake of the counsel and the principle of substantial justice over technicalities. The Tribunal emphasized that the Revenue did not file a counter-affidavit denying the assessee's allegations.

The Tribunal treated all appeals as withdrawn and dismissed them, granting the assessee liberty to revive the appeals if the dispute is not settled under the DTVSV 2024. Both parties agreed to this arrangement.

The Tribunal held that the assessee had filed submissions and applications for additional grounds and evidence during appellate proceedings, which were not considered by the CIT(A). Therefore, the issue was remitted back to the AO for fresh consideration.

The Tribunal treated all appeals as withdrawn and dismissed them, granting the assessee liberty to revive the appeals if the dispute is not settled under the DTVSV 2024. Both parties agreed to this arrangement.

The Tribunal noted that the assessee did not represent its case before the AO or CIT(A)/NFAC, and the CIT(A)/NFAC had not adjudicated the case on merits. In the interest of justice, the Tribunal decided to grant one more opportunity to the assessee.

The Tribunal held that the CIT(A)/NFAC had failed to appreciate the factual aspects and the previous ITAT order, dismissing the appeal without proper application of mind. The Tribunal restored the matter back to the CIT(A)/NFAC for fresh examination and denovo adjudication.

The Tribunal treated all appeals as withdrawn and dismissed them, granting the assessee liberty to revive the appeals if the dispute is not settled under the DTVSV 2024. Both parties agreed to this arrangement.

The Tribunal treated all appeals as withdrawn and dismissed them, granting the assessee liberty to revive the appeals if the dispute is not settled under the DTVSV 2024. Both parties agreed to this arrangement.

The Tribunal condoned the delay of 39 days, considering the reasons provided in the application and an affidavit. While noting the assessee's lack of seriousness in pursuing the matter, the Tribunal granted one more opportunity of hearing before the lower authorities in the interest of justice.

The Tribunal noted that the DTVSV settlement process was underway, and it would serve no purpose to keep the appeal pending. Therefore, the appeal was dismissed as the issue was being resolved under the scheme.

The Tribunal noted that the CIT(Exemption) had not properly considered the documentary evidence submitted by the assessee. Consequently, the matter was remitted back to the CIT(Exemption) for fresh consideration.

The ITAT condoned a 15-day delay in filing the appeal. Noting that the AO completed the assessment within two days during the Covid-19 period and the assessee failed to appear before the CIT(A) for justifiable reasons, the ITAT remitted the matter back to the AO. This remittance is conditional on the assessee depositing Rs. 10,000/- to the Pradhan Mantri National Relief Fund, and the AO must provide a fresh opportunity.

The Tribunal held that the filing of Form 67 is a directory requirement and not mandatory. The Tribunal also noted that Double Taxation Avoidance Agreements (DTAA) override the provisions of the Act and Rules. Thus, FTC cannot be denied solely for the delay in filing Form 67.

The Tribunal held that interest earned on term deposits made from unspent grants should be considered as a grant, thus exceeding the 50% threshold. The Tribunal also noted that the assessee institute was wholly and substantially financed and managed by the Government, fulfilling the conditions for exemption.

The Tribunal held that the dismissal of the appeal by the CIT(A)/NFAC was on a technical ground without considering the merits. The Tribunal found that it was not a case of non-filing of return or non-payment of tax due, but the submissions made by the assessee needed to be examined. The Tribunal remitted the issue to the CIT(A)/NFAC for denovo consideration.

The Tribunal held that interest earned on term deposits made from unspent grants should be considered as a grant, thus exceeding the 50% threshold. The Tribunal also noted that the assessee institute was wholly and substantially financed and managed by the Government, fulfilling the conditions for exemption.

The Tribunal found that the AO issued the final show cause notice at the fag end of the proceedings, and the CIT(A) failed to serve any notice of hearing. Therefore, in the interest of justice, the matter was restored to the file of the AO for fresh examination.

The Tribunal found that the PCIT (Exemptions) did not comply with the Principle of Natural Justice by issuing a short notice and passing an order without granting adequate opportunity. Therefore, the matters were restored to the PCIT (Exemptions) for fresh examination.

The Tribunal noted that the CIT(A) dismissed the assessee's appeal without a speaking order and did not provide sufficient opportunity. Therefore, the Tribunal restored the matter to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee, being an agriculturist and potentially not having access to electronic systems, was denied a proper opportunity to present their case. The Tribunal remitted the issue to the AO for a fresh denovo order after providing an opportunity to the assessee.

The Tribunal held that all the penalty orders passed by the AO for the impugned assessment years are barred by time. The Tribunal relied on the provisions of section 275(1)(c) of the Act and a predecessor bench's judgment. The AO initiated penalty proceedings in the assessment orders dated June 16, 2021. The show cause notices for penalty were issued on January 14, 2022. The penalty orders were passed on February 15, 2022. According to section 275(1)(c), in cases where penalty proceedings are initiated in the assessment order, the penalty order must be passed within six months from the end of the month in which the action for imposition of penalty was initiated. In this case, the action for imposition of penalty was initiated in the assessment order dated June 16, 2021. Six months from the end of June 2021 would expire on December 31, 2021. However, the penalty orders were passed on February 15, 2022, which is beyond the prescribed time limit. Therefore, the Tribunal annulled all the penalty orders as barred by time.

The Tribunal held that all the penalty orders passed by the AO for the impugned assessment years are barred by time. The Tribunal relied on the provisions of section 275(1)(c) of the Act and a predecessor bench's judgment. The AO initiated penalty proceedings in the assessment orders dated June 16, 2021. The show cause notices for penalty were issued on January 14, 2022. The penalty orders were passed on February 15, 2022. According to section 275(1)(c), in cases where penalty proceedings are initiated in the assessment order, the penalty order must be passed within six months from the end of the month in which the action for imposition of penalty was initiated. In this case, the action for imposition of penalty was initiated in the assessment order dated June 16, 2021. Six months from the end of June 2021 would expire on December 31, 2021. However, the penalty orders were passed on February 15, 2022, which is beyond the prescribed time limit. Therefore, the Tribunal annulled all the penalty orders as barred by time.

The Tribunal condoned the 16-day delay in filing the appeal. Considering the facts and the prayer of the assessee, the issue was remitted back to the CIT(A) with a direction for the assessee to cooperate and avoid unnecessary adjournments.

The Tribunal held that the CIT(A)'s direction to the AO to re-examine the deductibility of eligible amounts under Section 115JB, after giving the assessee an opportunity of hearing, was correct. The assessee was directed to provide details of brought forward losses and unabsorbed depreciation. The AO's appeal was dismissed as infructuous or on other grounds.