ITAT Chandigarh Judgments — April 2025

The Tribunal dismissed the appeal as withdrawn, noting that the Senior DR had no objection to the withdrawal. It further held that if the assessee fails to avail the benefits of the DTVSV scheme due to any technicalities, they would be at liberty to get the appeal revived by filing a Miscellaneous Application under Section 254(2) of the Act.

The Tribunal held that the assessee's activities fell under medical relief, which is a charitable purpose under Section 2(15). The AO erred in not considering the capital expenditure and the application of funds towards charitable objects. The Tribunal found that more than 85% of the income was applied for charitable activities, complying with Section 11 of the Act.

The Tribunal found that the assessee had sufficiently explained the sources of the cash deposits, citing the opening cash balance, withdrawals, and rental income. The AO's addition was therefore not justified.

The Tribunal condoned a three-day delay in filing the appeal, finding sufficient cause. It held that the CIT(A) erred by dismissing the appeal solely for non-prosecution without adjudicating the grounds of appeal on merits, especially when the assessee raised factual claims not examined by lower authorities. Upholding principles of natural justice, the Tribunal set aside the CIT(A)'s order and restored the matter to the Assessing Officer for de novo adjudication, granting the assessee an opportunity to present evidence.

The Tribunal condoned the delay in filing the appeal. It found no justification for the lower authorities' action in making/confirming the addition, noting that the Departmental Representative could not rebut the assessee's explanation regarding the re-deposit of previously withdrawn cash. Consequently, the addition of Rs. 14,79,970/- was ordered to be deleted.

Following a precedent set by a co-ordinate bench for a related case, the Tribunal ruled that the income declared by the assessee from its diagnostic business was duly explained and constituted business income, not unexplained sources. Consequently, Section 115BBE was not applicable, and the income should be taxed at normal rates.

The Tribunal noted that the Revenue's pending appeals before the Hon'ble Punjab & Haryana High Court had been withdrawn due to low tax effect. Consequently, the Tribunal treated the appeal as dismissed as withdrawn.

The Tribunal held that the delay in depositing ESI/PF contributions during the COVID-19 pandemic period was condoned by the EPFO and was not a ground for disallowance. The issue of cessation of trading liability was remanded to the AO for verification to avoid double taxation.

The Tribunal held that the Hon'ble Apex Court in the case of Checkmate Services P. Ltd. Vs. CIT (2022) has clarified the distinction between employer's contribution and employee's contribution. The latter, if deducted and not deposited by the due date, becomes income of the employer and deduction is not allowed.

The Tribunal held that the assessment order accepting returned income and uploaded incorrectly on ITBA portal, which lacked the requisite approval under Section 153D, was an erroneous order. Therefore, the Pr. CIT was justified in setting aside the order and initiating revision.

The Tribunal held that the original agreement dated 30.07.2009 should be considered for determining the stamp duty valuation, not the later tripartite agreement. Substantial payments were made as per the original agreement, and legal proceedings had delayed the registration.

The Tribunal held that adding entire receipts as income was unjustified, as it included payments as well. The Tribunal reduced the estimated profit rate for the unaccounted receipts to 3% for AY 2014-15 and AY 2015-16, and also for AY 2016-17, finding the 6% estimated by CIT(A) to be high. The addition of Rs. 10 lakhs as initial investment was also not sustained.

The ITAT acknowledged the substantial delay but considered the Supreme Court's directives and CBDT Circulars concerning the exclusion of the COVID-19 period for limitation purposes. Consequently, the ITAT condoned the delay and remanded the case back to the CIT(A) for fresh adjudication on merits, ensuring the assessee receives an adequate opportunity to be heard.

The Tribunal held that the CIT(A)'s order was well-reasoned and addressed the issues in detail, finding no reason to interfere. The Tribunal noted that the additions made by the AO were deleted by the CIT(A) on merits. Therefore, the Revenue's appeals were dismissed. The Cross Objections were also dismissed as no purpose would be served by deciding the validity of proceedings under Section 148 after the additions were deleted.

The Tribunal held that the PCIT, Central, Gurgaon, lacked jurisdiction to cancel the registration, as per CBDT notifications and various ITAT pronouncements, only CIT (Exemptions) is competent. It further ruled that Section 12AB(4), which became effective from 01.04.2022, could not be applied retrospectively from 01.04.2016. Consequently, the impugned order passed by the PCIT was quashed.

The Tribunal held that the date of the original agreement to sell from 2009 should be adopted for determining stamp duty valuation, not the date of registration in 2016. Substantial payments were made based on the 2009 agreement, and legal proceedings were ongoing.

For AY 2014-15 and 2015-16, the tribunal estimated business income @3% of the impugned receipts, directing the AO to re-compute. The separate addition for initial capital of Rs.10 Lacs was deleted as unsustainable. For AY 2016-17, the tribunal similarly directed computation of business income @3% of impugned receipts and remanded the issue of excessive interest disallowance under Section 40A(2)(b) back to the AO for fresh consideration.

The Tribunal condoned the delay in filing the appeal, finding that the assessee was prevented by sufficient cause due to improper service of deficiency notices. The Tribunal set aside the lower authority's order and restored the matter for fresh adjudication.

The Tribunal held that the addition made by the AO on account of alleged cash deposits and rental income were already accounted for in HUDA's financial statements and taxes paid. The Tribunal also noted that the assessee demonstrated that estate offices are part of HUDA, not separate entities, and their financial transactions are consolidated. The Tribunal found that the additions made by the AO were directed to be deleted by the CIT(A).

The Tribunal held that the appeals filed by the Revenue were dismissed. The additions made by the AO were deleted by the Ld. CIT(A) on merits. The Tribunal concurred with the CIT(A)'s decision, finding that the estate offices are part of HUDA and not separate entities. The issue regarding the validity of proceedings under Section 148 was not adjudicated as the additions were deleted on merits.

The Tribunal allowed the withdrawal of the appeal as the assessee had filed a declaration under the Vivad se Vishvas Act and made compliances, with final acceptance awaited. The DR did not object.

The Tribunal held that the assessee's explanation that the sum represented rotated credit in the account, supported by bank statements, cash flow statements, and land ownership documents, was plausible. The income from agriculture alone was sufficient source.

The ITAT upheld the CIT(A)'s order, concluding that the addition of unexplained cash under Section 68 read with Section 115BBE was not sustainable. The Tribunal emphasized that since the assessee maintained proper books of accounts, which were not rejected under Section 145(3), and no defects were found in the quantitative tally or records, cash sales from available stock, duly recorded, could not be treated as unexplained. Merely a variance in cash sales compared to previous years was an insufficient basis for addition.

The Tribunal held that interest income is taxable as income from other sources and not eligible for deduction under Section 80P. It also concluded that gains from projects were assessable as business income, not capital gains, as the assessee was in the business of construction.

The Tribunal held that the assessee was not given a reasonable opportunity for hearing and submission of evidence. Consequently, the ex parte order passed by the CIT(E) was set aside, and the matters were remitted back for fresh consideration.

The Tribunal condoned the delay, deeming it a bona fide mistake. It set aside the addition for capital gains, noting that the circle rate had been substantially reduced by the Collector, Mandi, and directed the AO to re-determine the deemed sale consideration, potentially referring the matter to the DVO under Section 50C(2). The Tribunal also set aside the addition for unexplained bank deposits for fresh adjudication, allowing the assessee to present a defense. Both the orders of the lower authorities were set aside for fresh examination by the AO.

The Tribunal held that once the Section 263 order was quashed, the Assessing Officer (AO) was divested of powers to pass a fresh assessment order based on it. Therefore, the subsequent assessment order lacked foundation and was rightly quashed by the CIT(A).

The Tribunal observed that no incriminating material was found during the search. Citing the Supreme Court's decision in *Abhisar Buildwell Pvt. Ltd.*, it ruled that additions for assessment years where the time limit for Section 143(2) notices had expired are unsustainable without incriminating material. For AY 2018-19, the Tribunal accepted the assessee's 'Jamabandi' and 'Khasra Girdawari' documents as valid proof of agricultural income under the Punjab Land Revenue Act. Consequently, the Tribunal deleted the additions for all assessment years and directed the AO to treat the income as agricultural income.

The Tribunal held that no incriminating material was found during the search. For assessment years where the time limit to issue notice under Section 143(2) had expired, no action could be taken by the Revenue. The documents produced regarding agriculture income were admissible, and the AO's treatment was unsustainable.

The Tribunal, noting that crucial aspects remained unexamined due to the assessee's non-representation despite opportunities, set aside the CIT(A)'s order. The matter was remanded to the Assessing Officer for fresh adjudication, directing the AO to afford reasonable opportunity, consider all evidence, and judicial precedents, while also directing the assessee to fully cooperate.

The Tribunal ruled that the AO failed to prove how the income, which the assessee had voluntarily offered from regular business sources, was unexplained. Since no incriminating material was found during the search, the higher tax rate under Section 115BBE was not applicable, and the income should be assessed at the regular rate.

The Tribunal held that for assessment years where the limitation period for issuing notices under Section 143(2) had expired and no incriminating material was found during the search, no addition could be made. For assessment year 2018-19, the agricultural income declared, supported by revenue records like 'Jamabandi' and 'Khasra Girdawari', should be treated as agricultural income.

The Tribunal held that since no specific question was put to the assessee to substantiate the manner of earning the undisclosed income during the search, the penalty was not sustainable. Consequently, the appeal of the assessee was allowed, and the appeals of the Revenue were dismissed.

The Tribunal found that the assessee's primary argument was the violation of principles of natural justice, as they were unrepresented during the revisionary proceedings. The Tribunal condoned the delay in filing the appeal and set aside the impugned order.

The Tribunal held that no incriminating material was found during the search and the time limit for issuing notices under Section 143(2) had expired for most assessment years. For assessment year 2018-19, documents like Jamabandi and Khasra Girdawari were produced, which are admissible and carry a presumption of truth.

The Tribunal held that since the assessee declared income on a presumptive basis under Section 44AD, she was not required to maintain books of accounts. The deposits were considered part of business sales proceeds as they were less than the declared turnover.

The Tribunal condoned the delay and decided to proceed with the appeal on merit. The assessment order was ex-parte and lacked proper documentation regarding the property purchase and its sources.

The Tribunal held that the AO could not refer the matter to DVO without rejecting the assessee's books of accounts. Furthermore, the benefit of self-supervision and concessions for CPWD rates were to be allowed, resulting in no addition for unexplained investment.

The Tribunal held that since no specific question was put to the assessee during the search to substantiate the manner of earning the undisclosed income, the penalty under Section 271 AAA cannot be levied.

The Tribunal held that the assessee is eligible for 100% deduction under Section 80IC for AY 2016-17, relying on the Supreme Court's decision in Aarham Softronics and noting that the Coordinate Bench had accepted similar claims in prior years.

The Tribunal held that the AO could not refer the matter to DVO without rejecting the assessee's books of accounts. It also considered the arguments for concessions in CPWD rates and self-supervision.

The Tribunal held that no incriminating material was found during the search, and for assessment years 2013-14 to 2015-16 and 2017-18, the time limit to issue notices under Section 143(2) had expired. For assessment year 2018-19, documents like 'Jamabandi' and 'Khasra Girdawari' were produced, which are admissible as evidence and presume truth. Therefore, the AO's action was not sustainable.

The Tribunal held that no specific question was asked to the assessee during the search to substantiate the manner of earning the undisclosed income. Following the decision in a similar group case, the Tribunal allowed the assessee's appeal.

The Tribunal held that the assessee's claim for depreciation was bonafide at the time of filing the return, as it lacked registration. Upon obtaining registration, it correctly withdrew the claim and offered income for taxation, thus not constituting under-reporting of income.