ITAT Chennai Judgments — October 2024

The Tribunal held that Section 234E of the Income Tax Act is a substantive provision and its levy is not dependent on Section 200A(1)(c). The liability is attracted the moment there is a failure to deliver the statement within the prescribed time.

The Tribunal restored both issues to the file of the AO for fresh verification. For the excess stock, the AO will examine the reconciliation statement of closing stock vis-a-vis VAT returns and audited accounts. For the cash deposits, the assessee needs to provide complete details and explanations to the AO, who will then decide based on examination of bills, vouchers, and sales.

While acknowledging the assessee's negligence, the Tribunal, in the interest of natural justice, decided to grant another opportunity for hearing.

The Tribunal noted that the assessee failed to substantiate the transactions with the supplier to the satisfaction of the AO. However, considering the additional evidence furnished by the assessee, the Tribunal set aside the orders of the lower authorities. The issue was restored to the file of the AO for de novo adjudication, including consideration of the additional evidence.

The Tribunal held that Section 234E of the Income Tax Act is a substantive provision and its levy is not dependent on Section 200A(1)(c). The liability is attracted the moment there is a failure to deliver the statement within the prescribed time.

The Tribunal held that Section 234E of the Income Tax Act is a substantive provision and its levy is not dependent on Section 200A(1)(c). The liability is attracted the moment there is a failure to deliver the statement within the prescribed time.

The Tribunal held that Section 234E of the Income Tax Act is a substantive provision and its levy is not dependent on Section 200A(1)(c). The liability is attracted the moment there is a failure to deliver the statement within the prescribed time.

The Tribunal held that Section 234E of the Income Tax Act is a substantive provision and its levy is not dependent on Section 200A(1)(c). The liability is attracted the moment there is a failure to deliver the statement within the prescribed time.

The Tribunal held that Section 234E of the Income Tax Act is a substantive provision and its levy is not dependent on Section 200A(1)(c). The liability is attracted the moment there is a failure to deliver the statement within the prescribed time.

The Tribunal held that Section 234E of the Income Tax Act is a substantive provision and its levy is not dependent on Section 200A(1)(c). The liability is attracted the moment there is a failure to deliver the statement within the prescribed time.

The Tribunal held that Section 234E of the Income Tax Act is a substantive provision and its levy is not dependent on Section 200A(1)(c). The liability is attracted the moment there is a failure to deliver the statement within the prescribed time.

The Tribunal, considering the principle of natural justice, decided to grant the assessee another opportunity to present its case. The appeal was restored to the CIT(A) for fresh adjudication.

The Tribunal noted that the assessee was given 11 opportunities but failed to provide complete details, exhibiting non-cooperative behavior. However, in the interest of justice, the Tribunal decided to set aside the CIT(A)'s order and remand the matter back for fresh adjudication.

While acknowledging the assessee's negligence and failure to appear, the Tribunal, in the interest of natural justice, decided to provide another opportunity for hearing. The appeal was restored to the CIT(A) for de novo adjudication.

The Tribunal noted that the assessee failed to substantiate the transactions with the supplier to the satisfaction of the AO. However, considering the additional evidence furnished by the assessee, the Tribunal set aside the orders of the lower authorities. The issue was restored to the file of the AO for de novo adjudication, including consideration of the additional evidence.

The Tribunal condoned the delay in filing the appeal by the Revenue. The appeal pertains to the disallowance of expenditure related to exempt income under Section 14A.

The Tribunal held that the CIT(A) dismissed the appeal without considering the merit and the documentary evidence submitted by the assessee. The assessee was not given a reasonable opportunity to substantiate their case.

The Tribunal condoned the delay in filing the first appeal before the CIT(A) on the principle of natural justice, subject to a payment of Rs. 5,000/- to the Tamil Nadu State Legal Services Authority. The CIT(A) is directed to adjudicate the appeal on merits.

The Tribunal held that the assessee was not given sufficient opportunity, violating principles of natural justice. Therefore, the order of the CIT(E) was set aside.

The Tribunal held that the CIT(A) had passed an ex-parte order confirming the addition without deciding the case on merit. Observing that the principles of natural justice require an opportunity for the assessee to substantiate their case, the Tribunal set aside the CIT(A)'s order.

The Tribunal held that the CIT(A) erred in dismissing the appeals for default without adjudicating on the merits. It was observed that a dismissal for default is bad in law and the appellate authority has a duty to decide the appeal on merits, even in the absence of the assessee. The Tribunal also noted that there is no specific rule preventing the condonation of delay if a petition is not filed along with the appeal.

The Tribunal directed the AO to estimate business income at 20% on the sale of Rs. 16,58,974/-, amounting to Rs. 3,31,795/-, and deleted the addition for cash deposits. The agricultural income was assessed at the declared Rs. 3.50 Lacs, and the excess Rs. 1.71 Lacs was ignored.

The Tribunal, considering that the case is now represented by the legal heir, deemed it fit to grant another opportunity for substantiating the case. The appeal is therefore restored back to the file of the Ld. CIT(A) for fresh adjudication.

Despite the assessee's negligence and failure to appear, the tribunal, in the interest of natural justice, decided to provide another opportunity for the assessee to present its case.

The Tribunal held that the CIT(A) erred in dismissing the appeals for default without adjudicating on the merits. It was observed that a dismissal for default is bad in law and the appellate authority has a duty to decide the appeal on merits, even in the absence of the assessee. The Tribunal also noted that there is no specific rule preventing the condonation of delay if a petition is not filed along with the appeal.

The Tribunal held that the CIT(A) erred in dismissing the appeals for default without adjudicating on the merits. It was observed that a dismissal for default is bad in law and the appellate authority has a duty to decide the appeal on merits, even in the absence of the assessee. The Tribunal also noted that there is no specific rule preventing the condonation of delay if a petition is not filed along with the appeal.

The Tribunal found that the cash deposits and bank credits were largely withdrawn immediately, suggesting they did not belong to the assessee. However, it upheld an estimation of income, albeit at a reduced rate.

The Tribunal held that the CIT(A) erred in dismissing the appeals for default without adjudicating on the merits. It was observed that a dismissal for default is bad in law and the appellate authority has a duty to decide the appeal on merits, even in the absence of the assessee. The Tribunal also noted that there is no specific rule preventing the condonation of delay if a petition is not filed along with the appeal.

The Tribunal held that the CIT(A) erred in dismissing the appeals for default without adjudicating on the merits. It was observed that a dismissal for default is bad in law and the appellate authority has a duty to decide the appeal on merits, even in the absence of the assessee. The Tribunal also noted that there is no specific rule preventing the condonation of delay if a petition is not filed along with the appeal.

The Tribunal held that both the AO and the CIT(A) passed orders without considering the assessee's reply and without deciding the case on merits, respectively. The Tribunal found that the AO made a disallowance of Rs. 24,44,170/- without considering the assessee's reply. The CIT(A) dismissed the appeal ex-parte. In adherence to the principles of natural justice, the Tribunal opined that the assessee should be granted another opportunity to present its case before the AO. Consequently, the Tribunal set aside the orders of the lower authorities and remitted the matter back to the AO for adjudication afresh, after providing a reasonable opportunity to the assessee. The assessee was also directed to appear before the AO on the date of hearing without fail. The appeal was allowed for statistical purposes.

The Tribunal acknowledged a delay of 33 days in filing the appeal, which was condoned due to sufficient cause. The Tribunal found that both the AO and CIT(A) passed orders ex-parte due to the assessee's non-compliance. Observing principles of natural justice, the Tribunal decided to provide the assessee with another opportunity to present their case.

The Tribunal condoned the delay considering the affidavit and period of delay. While acknowledging the assessee's negligence and opposition from the Revenue, the Tribunal granted another opportunity to substantiate the case, subject to payment of costs of Rs. 5,000 to the Tamil Nadu State Legal Services Authority.

The Tribunal held that the reopening of assessment under Section 147 was justified. While the initial admission was made by the partner during the survey, the assessee failed to discharge the onus during the assessment proceedings to submit all bills/vouchers in support of the claimed labour expenses, especially after admitting that some were not fully vouched. Therefore, the AO was justified in making disallowances. Regarding the quantum, the Tribunal noted the net profit ratios for AYs 2013-14 to 2019-20. Citing the Madras High Court decision in K. Kannan vs. Assistant Commissioner of Income-tax, which held a net profit of 5% of contract receipts justifiable for such businesses, the Tribunal restricted the disallowance to 5% of labour expenses for AYs 2003-04 to 2018-19, aiming for a net profit of approximately 5%. For AY 2019-20, where the assessee already showed a net profit of 6.18%, no further disallowance was deemed necessary. The AO was directed to compute the disallowance accordingly. The issue of limitation for the Section 148 notice was implicitly addressed by upholding the reassessment, and the reliance on survey statements was contextualized by the assessee's failure to substantiate expenses during assessment.

The Tribunal held that the reopening of assessment under Section 147 was justified. While the initial admission was made by the partner during the survey, the assessee failed to discharge the onus during the assessment proceedings to submit all bills/vouchers in support of the claimed labour expenses, especially after admitting that some were not fully vouched. Therefore, the AO was justified in making disallowances. Regarding the quantum, the Tribunal noted the net profit ratios for AYs 2013-14 to 2019-20. Citing the Madras High Court decision in K. Kannan vs. Assistant Commissioner of Income-tax, which held a net profit of 5% of contract receipts justifiable for such businesses, the Tribunal restricted the disallowance to 5% of labour expenses for AYs 2003-04 to 2018-19, aiming for a net profit of approximately 5%. For AY 2019-20, where the assessee already showed a net profit of 6.18%, no further disallowance was deemed necessary. The AO was directed to compute the disallowance accordingly. The issue of limitation for the Section 148 notice was implicitly addressed by upholding the reassessment, and the reliance on survey statements was contextualized by the assessee's failure to substantiate expenses during assessment.

The Tribunal held that the reopening of assessment under Section 147 was justified. While the initial admission was made by the partner during the survey, the assessee failed to discharge the onus during the assessment proceedings to submit all bills/vouchers in support of the claimed labour expenses, especially after admitting that some were not fully vouched. Therefore, the AO was justified in making disallowances. Regarding the quantum, the Tribunal noted the net profit ratios for AYs 2013-14 to 2019-20. Citing the Madras High Court decision in K. Kannan vs. Assistant Commissioner of Income-tax, which held a net profit of 5% of contract receipts justifiable for such businesses, the Tribunal restricted the disallowance to 5% of labour expenses for AYs 2003-04 to 2018-19, aiming for a net profit of approximately 5%. For AY 2019-20, where the assessee already showed a net profit of 6.18%, no further disallowance was deemed necessary. The AO was directed to compute the disallowance accordingly. The issue of limitation for the Section 148 notice was implicitly addressed by upholding the reassessment, and the reliance on survey statements was contextualized by the assessee's failure to substantiate expenses during assessment.

The Tribunal held that the reopening of assessment under Section 147 was justified. While the initial admission was made by the partner during the survey, the assessee failed to discharge the onus during the assessment proceedings to submit all bills/vouchers in support of the claimed labour expenses, especially after admitting that some were not fully vouched. Therefore, the AO was justified in making disallowances. Regarding the quantum, the Tribunal noted the net profit ratios for AYs 2013-14 to 2019-20. Citing the Madras High Court decision in K. Kannan vs. Assistant Commissioner of Income-tax, which held a net profit of 5% of contract receipts justifiable for such businesses, the Tribunal restricted the disallowance to 5% of labour expenses for AYs 2003-04 to 2018-19, aiming for a net profit of approximately 5%. For AY 2019-20, where the assessee already showed a net profit of 6.18%, no further disallowance was deemed necessary. The AO was directed to compute the disallowance accordingly. The issue of limitation for the Section 148 notice was implicitly addressed by upholding the reassessment, and the reliance on survey statements was contextualized by the assessee's failure to substantiate expenses during assessment.

The Tribunal held that the reopening of assessment under Section 147 was justified. While the initial admission was made by the partner during the survey, the assessee failed to discharge the onus during the assessment proceedings to submit all bills/vouchers in support of the claimed labour expenses, especially after admitting that some were not fully vouched. Therefore, the AO was justified in making disallowances. Regarding the quantum, the Tribunal noted the net profit ratios for AYs 2013-14 to 2019-20. Citing the Madras High Court decision in K. Kannan vs. Assistant Commissioner of Income-tax, which held a net profit of 5% of contract receipts justifiable for such businesses, the Tribunal restricted the disallowance to 5% of labour expenses for AYs 2003-04 to 2018-19, aiming for a net profit of approximately 5%. For AY 2019-20, where the assessee already showed a net profit of 6.18%, no further disallowance was deemed necessary. The AO was directed to compute the disallowance accordingly. The issue of limitation for the Section 148 notice was implicitly addressed by upholding the reassessment, and the reliance on survey statements was contextualized by the assessee's failure to substantiate expenses during assessment.

The Tribunal held that the PCIT's revision order was not justified. The AO had considered the seized materials and the group assessment, and the PCIT could not substitute his view for the AO's when plausible views existed.

The Tribunal held that the PCIT's revision order was not justified. The AO had considered the seized materials and the group assessment, and the PCIT could not substitute his view for the AO's when plausible views existed.

The Tribunal held that the AO had made detailed inquiries and conducted further verification regarding the Section 80-IC deduction. The PCIT could not invoke Section 263 jurisdiction as the AO's view was a possible and plausible one, supported by case law.

The Tribunal held that the reversal of excess depreciation, credited to Reserves and Surplus as per the amended Companies Act, 2013 and ICAI Guidance Note, is in accordance with law. Therefore, the Assessing Officer's acceptance of this treatment cannot be disapproved under Section 263.

The Tribunal held that the AO did not record proper satisfaction to disallow expenses related to exempt income. The Tribunal also noted that the assessee's suo-moto disallowance was not properly examined by the AO. The Tribunal further observed that the appointed date of amalgamation should be considered for tax purposes, not the effective date.

The tribunal did not entertain the legal issue regarding the non-issuance of a Section 143(2) notice after re-opening the assessment under Section 147, as the assessee filed the return of income just one week before the assessment became time-barred. The tribunal also dismissed the challenge to the service of the Section 148 notice.

The Tribunal noted that the tax effect in the appeal was below the monetary limit prescribed by the CBDT for filing appeals. Therefore, the appeal was not maintainable.

The Tribunal held that the reopening of assessment was justified as the partner's admission during the survey indicated issues with labor expense vouchers. However, considering the net profit ratios and judicial precedents, the disallowance was restricted to 5% of labor expenses for most assessment years.

The Tribunal upheld the CIT(A)'s decision to allow a segmental approach for computing ALP, restricting it to international transactions. It also affirmed the allowance of capacity utilization adjustment, directing further adjudication on specific aspects.

The Tribunal noted that the subsequent application filed on 02.10.2023 was premature. However, the cancellation of the earlier approval by the CIT(E) without a hearing was considered bad in law.

The Tribunal held that the second application was indeed premature. However, the cancellation of the earlier approval by the CIT(E) without prior notice and an opportunity of hearing was considered bad in law. The Tribunal directed the CIT(E) to restore the approval granted on 14.10.2021.

The Tribunal noted that both the assessment order and the impugned order of the Ld.CIT(A) were ex parte. The Tribunal, relying on the Supreme Court decision in TIN Box Co. v. CIT, held that the assessee did not get a proper opportunity of hearing before the AO and the Ld.CIT(A).

The Tribunal observed that the payments were for marketing and sales services rendered by foreign agents. It was noted that the 'make available' condition for technical services under the respective DTAAs might not be applicable. The Tribunal also considered that these payments could be business profits taxable in the respective countries of the payees, as they had no Permanent Establishment in India.