ITAT Chennai Judgments — December 2024

The tribunal held that Section 234E of the Income Tax Act is a substantive provision that creates liability for late filing of TDS returns. The levy of late fees is not dependent on the existence of Section 200A(1)(c), which is merely a recovery mechanism. The tribunal followed the decision in Conceria International (P.) Ltd. and found the levy of fees u/s 234E for AYs 2013-14 & 2014-15 to be valid.

The Tribunal held that the assessee's argument that the bank's failure to deduct TDS absolved them of the liability to pay advance tax was fallacious. The obligation to compute advance tax and final tax liability rested with the assessee. Ignorance of the law is no excuse, and the revenue is entitled to compensatory interest for delayed payment. The AO's levy of interest under Section 234B was upheld, and the AO was directed to re-compute the interest from the date the capital gains arose.

The Tribunal condoned the delay after finding the reasons bonafide. The Tribunal noted that while the assessee provided confirmations and bank statements, the Assessing Officer found issues with identity, creditworthiness, and genuineness. Due to the inability to verify these aspects, the matter was remanded.

The Tribunal noted that the assessee failed to substantiate its case during the first appeal. However, in the interest of natural justice, the Tribunal accepted the plea for another opportunity of hearing.

The Tribunal held that the primary liability to compute correct taxes lies with the assessee and they cannot shift this burden to the banker. The assessee's argument that the banker was responsible for TDS deduction was rejected as the assessee failed to reflect the income in their returns. The Tribunal also noted that the CIT(A) did not consider all arguments and case laws.

The Tribunal noted that the nature and purpose of the performance guarantee contract were unclear and appeared to be potentially unenforceable. The validity and enforceability of the guarantee were questioned, and it was observed that the payment seemed to be a smokescreen to remit surplus. The issue was remitted back to the DRP for fresh adjudication.

The Tribunal held that deduction of tax at source and payment through banking channels were insufficient to establish the claim. The assessee failed to provide sufficient evidence to demonstrate the rendition of services for the construction activities.

The CIT(A) dismissed the appeal because the assessee failed to provide evidence that the property was agricultural land. The Tribunal noted that the assessee was unrepresented during the first appeal and thus could not substantiate their claim.

The Tribunal held that the assessees were not given a proper opportunity to present their case. The rejection of the applications by the CIT(E) for non-compliance with the show-cause notice was deemed to be without sufficient opportunity for the assessee.

The Tribunal held that charging the entire amount to tax without considering the profit element is incorrect. The assessee is a mobile sim recharger, and the deposited cash represents collection for clients. The Tribunal found merit in the assessee's contention and decided to remand the matter for fresh consideration.

The Tribunal held that both the AO and the Ld.CIT(A) failed to apply their mind to the facts of the case, particularly the assessee's submission that the deposits were repayments of loans and interest from members, which were duly accounted for. The Tribunal found that no proper evidence was called for or considered to disprove the assessee's claim.

The Tribunal noted that the assessee had pending applications for condonation of delay in filing Form 10 and Form 10B before the Ld.CIT(E). For AY 2017-18, the delay in filing Form 10B was condoned, but the delay in filing Form 10 for both AYs was still pending. The Tribunal found it improper for the Ld.CIT(A) to confirm the AO's denial without awaiting the outcome of these condonation applications.

The Tribunal accepted the assessee's plea for another opportunity of hearing, considering the principles of natural justice. The impugned order was set aside, and the matter was restored to the CIT(Exemption) for fresh consideration.

The Tribunal held that the addition for sundry creditors was not sustainable as the amount was an opening balance due to the assessee's husband and supported by ledger extracts and confirmation. Similarly, the addition for deposits was also not sustainable as it represented rental deposits outstanding since FY 2010-11 and reflected in financial statements. The additions could not be rejected on mere suspicion.

The Tribunal, considering the principles of natural justice, accepted the assessee's request for another opportunity. The impugned order was set aside, and the matter was restored to the CIT(E) with a direction to allow the assessee to submit the necessary documents.

While acknowledging the assessee's negligence, the tribunal, in the interest of natural justice, decided to grant another opportunity for the assessee to present its case. The impugned order was set aside, and the appeal was restored to the CIT(A) for a fresh adjudication.

The Tribunal held that the tax rates prescribed under the India-USA DTAA, which include surcharge and surtax, also embed education cess. Therefore, education cess is not leviable on income taxed at DTAA rates.

The Tribunal found that while the CIT(A) correctly identified a procedural irregularity in not providing the reasons for reopening, the decision of the Hon'ble Madras High Court in M/s. Home Finders Housing Ltd. v. ITO suggests that such a violation is an irregularity that can be cured by remitting the matter. Therefore, the Tribunal set aside both the AO's order and the CIT(A)'s order.

The Tribunal condoned a delay of 59 days in filing the appeal. Observing that the CIT(A) dismissed the appeal ex-parte without addressing the merits, the Tribunal restored the appeal to the CIT(A) for fresh adjudication. This was done in the interest of justice and subject to the assessee paying costs.

The Tribunal condoned the delay in filing the appeal. The assessee was permitted to withdraw the appeal as they had opted for the Direct Tax Vivad-se-Vishwas Scheme, 2024.

The Tribunal held that the show cause notice issued by the AO was bad in law because it did not specify the exact fault (concealment of income or furnishing inaccurate particulars) for which the penalty was being levied. This defect vitiated the penalty itself.

The Tribunal noted that the show-cause notices were only uploaded on the e-portal and not effectively served as hearing notices, leading to a lack of proper opportunity for the assessees. Therefore, in the interest of justice, the Tribunal decided to remand the matters back to the CIT(E) for fresh consideration.

The Tribunal noted that the assessee could not produce certain statutory documents, leading the AO to estimate profit at 8%. While the assessee claimed their net profit was between 3-5% and provided ledger accounts and cash vouchers, the CIT(A) doubted the audit report's genuineness. The Tribunal directed the CIT(A) to re-verify the audit report and decide the profit estimation afresh.

The Tribunal set aside the orders of CIT(A) and restored the appeals to the file of CIT(A). The CIT(A) was directed to await the outcome of the condonation application pending before CIT(E) and then re-adjudicate the appeal.

The Tribunal noted that the Revenue is precluded from filing appeals with a tax effect below the prescribed monetary limit as per CBDT Circular No. 06/2024. The Revenue's counsel conceded to this fact.

The Tribunal noted the delay in filing the appeal was 156 days and condoned it. The Tribunal also observed that the assessee had not cooperated with the Assessing Officer or the CIT(A). Despite this, for the interest of justice, the Tribunal decided to remand the matter back to the Assessing Officer.

The Tribunal, while acknowledging the assessee's negligence, decided to grant another opportunity based on the principle of natural justice. The additional evidence was admitted, the impugned order was set aside, and the assessment was restored to the AO for a de novo assessment.

The Tribunal, referring to the decision in Conceria International (P.) Ltd., held that Section 234E of the Act is a substantive provision and the levy of late fee is not dependent on Section 200A(1)(c) which only prescribes a recovery mechanism. The section attracts when there is a failure to deliver the TDS statement within the prescribed time, irrespective of the amendment date of Section 200A.