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346 orders · Page 6 of 7
The Tribunal held that additions based on seized material cannot be made in the hands of the assessee firm, M/s. P.P. Financiers. The Tribunal reasoned that Section 292C allows for a discretionary and rebuttable presumption, and in this case, the seized material itself identified the contributors of funds. The lack of exclusive identification of the assessee firm and the multiplicity of entities where Shri P. Palanisamy is a partner rendered the attribution speculative. Therefore, the additions were not justified. The Tribunal allowed the appeal on this ground. Regarding the protective addition of Rs. 10,12,50,000/-, the Tribunal found it unsustainable as it was based on unreliable loose sheets without corroboration and an alleged admission from a survey that lacked evidentiary value for the firm. The Tribunal upheld the deletion of this addition by the CIT(A). On the issue of Section 115BBE, the Tribunal noted it was academic but followed the decision of the Hon'ble Madras High Court in S.M.I.L.E Microfinance Ltd. v. ACIT, holding that the section is not applicable for assessment years prior to AY 2018-19. The Tribunal allowed the appeals on merits on these grounds, leaving other grounds undecided.
The Tribunal noted that the Assessing Officer had made additions to the income of the assessee, treating certain amounts as unexplained. This action was subsequently upheld by the Commissioner of Income Tax (Appeals). The Tribunal, after considering the submissions of both parties and the material on record, found that the assessee had not been able to satisfactorily explain the nature and source of the amounts in question. Consequently, the Tribunal held that the addition made by the Assessing Officer and confirmed by the CIT(A) was justified. The appeal filed by the assessee was therefore dismissed. The ratio decidendi is that where an assessee fails to provide a satisfactory explanation for amounts found in their possession or income, the revenue authorities are justified in treating such amounts as unexplained income and making additions accordingly.
The Tribunal condoned the delay in filing the appeals. The Tribunal noted that the Revenue did not raise serious objections to the condonation. It referred to the guiding principles enunciated by the Hon'ble Supreme Court in Collector, Land Acquisition v. MST Katiji, which advocate for a rational, common-sense, and pragmatic approach to condoning delays, prioritizing substantial justice over technical considerations. The Court emphasized that there is no presumption of deliberate delay or culpable negligence, and a litigant does not benefit from delaying. The Tribunal found that the assessees' explanations for the delay, including awaiting other appellate orders and bank account freezes, were reasonable and did not indicate mala fide intent. Therefore, in the interest of substantial justice, the delay was condoned, allowing the appeals to be heard on merits.
The Tribunal decided on the issues as follows: Regarding the condonation of delay, the Tribunal noted the principles laid down in Collector, Land Acquisition v. MST Katiji and, without explicit objection from the Revenue, implicitly accepted the assessees' reasons for the delay. On the issue of seized books and documents, the Tribunal considered the assessee's arguments that the presumption under Section 292C is rebuttable and that evidence suggests the books do not belong to the firm. The Tribunal also noted the assessee's contention that even if the seized material belonged to the assessee, additions could not be made in the firm's hands as the amounts represented partner contributions. The Tribunal acknowledged the assessee's argument that the "Thittam" books were not produced and the method of addition was unclear. Regarding the applicability of Section 115BBE at 60%, the Tribunal noted the assessee's reliance on the Hon'ble Madras High Court's decision in S.M.I.L.E Microfinance Limited v ACIT and the Ahmedabad ITAT's decision in Naranbhai Samatbhai Bharwad v ITO, which held that the higher rate applies only from 01.04.2017. The Tribunal's final decision on these points is not fully detailed in the provided excerpt, but it appears to lean towards the assessee's arguments regarding the presumption under Section 292C and the applicability of Section 115BBE. The operative directions are not fully specified, but the reasoning suggests potential relief for the assessees.
The Tribunal condoned the delay in filing the appeals, citing the principles from Collector, Land Acquisition v. MST Katiji, emphasizing that substantial justice should be preferred over technical considerations and that there is no presumption of deliberate delay. Regarding the substantive issue, the Tribunal noted that the issue of whether the seized materials belonged to the assessee was kept open in a prior decision concerning P. Palanisamy. The Tribunal proceeded to adjudicate the appeals on merits. The assessee argued that the seized materials did not belong to them, pointing to the discrepancy in the number of partners in the 'consortium of lenders' list (38) compared to the firm's actual partners (18), and that the source of capital was identified as partners. The assessee also highlighted the retraction of a key statement and the lack of evidentiary value in statements recorded under section 131. The Revenue contended that the seized books were regular and belonged to the firm, supported by statements from borrowers. The judgment does not explicitly state the final finding on the additions made by the AO, as it refers to a previous decision where the issue was kept open. Therefore, the operative directions are not fully detailed here, but the appeals are being adjudicated on merits.
The provided excerpt of the judgment is introductory and lists the parties and appeals. It does not contain any findings, reasoning, or operative directions from the Tribunal. Therefore, it is not possible to state what the Tribunal decided, the reasoning behind its decision, or the ratio decidendi. No issues were expressly left undecided as no issues were decided in the first place. The operative directions are also absent.
The Tribunal decided to condone the delay in filing the appeals by the assessees. The reasoning was based on a perusal of the decision in Collector, Land Acquisition v. MST Katiji [(1987) 167 ITR 471 (SC)], which provides guiding principles for condoning delay. The Tribunal noted that ordinarily, a litigant does not benefit from filing an appeal late, and refusing to condone delay can lead to a meritorious matter being thrown out at the threshold, defeating the cause of justice. The Tribunal emphasized that a pedantic approach to explaining every day's delay is not required, and that substantial justice should be preferred over technical considerations when a non-deliberate delay occurs. The Tribunal found no presumption of deliberate delay, culpable negligence, or mala fides on the part of the assessees. The ratio is that when substantial justice and technical considerations are pitted against each other, substantial justice deserves to be preferred, especially in cases of non-deliberate delay, aligning with the judiciary's role in removing injustice.
The Tribunal considered the arguments and materials on record. It noted that the Department conceded that Shri P. Palanisamy operated and controlled multiple entities with a uniform accounting methodology. Regarding the additions based on loose sheets, the Tribunal acknowledged the assessee's reliance on various case laws, including DCIT v. Sunil Kumar Sharma and Common Cause, which hold that additions cannot be made solely on unverified, unsigned, and uncorroborated documents. The Tribunal also considered the argument that the firm cannot be taxed for amounts belonging to other individuals. On the issue of protective additions, the Tribunal noted the assessee's submission that a firm cannot be taxed for entries in a separate proprietary concern's books. Concerning the rate of tax under Section 115BBE, the Tribunal referred to the Madras High Court's decision in S.M.I.L.E Microfinance Limited, which held the 60% rate applicable only from 01.04.2017. The Tribunal found that the CIT(A) erred in upholding the 60% rate for AYs 2016-17 and 2017-18. The Tribunal's specific findings on each issue and the operative directions are not fully detailed in the provided excerpt, but the reasoning suggests a potential relief for the assessees on these grounds.
The Tribunal held that the seized material did not conclusively belong to the assessee firm, M/s. P.P. Financiers. The Tribunal noted the discrepancy in the number of partners mentioned in the seized documents (38) compared to the actual number of partners in the firm (18), as per the partnership deed. It also considered the assessee's argument that individuals named in the seized documents were partners in multiple entities, not exclusively the assessee firm. The Tribunal acknowledged the Revenue's argument that statements from purported borrowers confirmed borrowings and repayments to the assessee firm, and that books found on the firm's premises are presumed to belong to it under Section 292C. However, the Tribunal found the evidence presented by the assessee to rebut the presumption under Section 292C to be overwhelming. The Tribunal did not decide on the issue of additions if the seized material were presumed to belong to the assessee, as it was stated as 'without prejudice' to the primary contention.
The Tribunal consolidated all the appeals for common hearing and disposal. The primary issue addressed was the jurisdiction and the merits of the additions made by the Assessing Officer. The Tribunal noted that the appeals were filed against the orders of the AO, and the Revenue had also filed cross-appeals in certain cases. The Tribunal's decision was to consolidate these appeals. While the judgment lists the parties and the assessment years, the specific findings on the additions made by the AO or the reasoning behind any decision on the merits of the case are not detailed in the provided excerpt. The operative part of the decision, such as allowing or dismissing the appeals or remanding the matter, is also not explicitly stated in this portion of the judgment. The Tribunal's focus in this section appears to be on the procedural aspect of consolidating the appeals.
The Tribunal, referencing the principles from Collector, Land Acquisition v. MST Katiji, condoned the delay in filing the appeals by the assessees. The Tribunal found that the assessees' reasons for the delay were reasonable and that refusing condonation would defeat substantial justice. Regarding the 'last two digits represent paisa theory', the Tribunal noted the assessee's submission that the AO applied this theory based on unrelated 'Thittam notings' and did not apply it to the assessee's own case for protective additions. The judgment does not explicitly state the Tribunal's final finding on this specific issue, but the context suggests it was a point of contention and likely to be decided on merits. The operative direction is to proceed with the appeals.
The Tribunal held that additions based on seized material cannot be made in the hands of the assessee firm if the material itself identifies contributors or is speculative, allowing the assessee's appeal on these grounds. The Tribunal found the protective addition of Rs. 10,12,50,000/- unsustainable due to the lack of evidentiary value of the loose sheets and the alleged admission, agreeing with the CIT(A)'s deletion. Regarding Section 115BBE, the Tribunal, following the Madras High Court's decision in S.M.I.L.E. Microfinance Ltd. v. ACIT, held that the enhanced rate is not applicable for transactions occurring before April 1, 2017. The appeals were decided as per a chart, with some allowed, some dismissed, and one partly allowed. Remaining grounds on merits were left undecided.
The Tribunal condoned the delay in filing the appeals. It noted that the assessees had provided reasons for the delay, including awaiting the receipt of remaining appellate orders for collective filing and issues arising from the freezing of their bank accounts, which necessitated arrangements for paying appeal fees. The Tribunal referred to the six guiding principles enunciated by the Hon'ble Supreme Court in Collector, Land Acquisition v. MST Katiji [(1987) 167 ITR 471 (SC)] for condoning delays. Applying these principles, the Tribunal found that the assessees had made out a case for condonation, emphasizing that refusing to condone delay could lead to meritorious matters being thrown out on technical grounds, thereby defeating the cause of justice. The Revenue did not raise any serious objections. Therefore, the appeals were admitted for hearing on merits.
The Tribunal held that the guarantee fee of Rs. 2,22,34,322/- is not chargeable to tax in India. The reasoning was that the assessee is a tax resident of Korea, the guarantees were provided to foreign banks outside India, and the assessee does not have a Permanent Establishment (PE) in India. The Assessing Officer himself accepted that the guarantee fee was neither interest, fees for technical services, nor business income. Therefore, it had to be examined under Article 22 (Other Income) of the India-Korea DTAA. Article 22(1) states that items of income not dealt with in other articles shall be taxable only in the state of residence. Article 22(2) provides an exception only if the recipient carries on business in the other state through a PE, which is not the case here. The Tribunal respectfully followed the binding precedent of the jurisdictional Chennai Tribunal in Daechang Seat Co. Ltd. v. DCIT, which held that guarantee fees received by a Korean company from its Indian subsidiaries are taxable only in Korea under Article 22 of the DTAA. Similar views were taken in KIA Corporation v. ACIT and Capgemini SA v. DCIT. Consequently, the addition made by the Assessing Officer was deleted. The levy of interest under Section 234B was consequential and did not survive.
The Tribunal found that the seized material, particularly a tally print-out, did not constitute regular books of account and lacked continuity or authentication. Therefore, it could not be relied upon as admissible evidence to make additions. The presumption under Section 292C was also found to be rebuttable and not applicable in this case.
The Tribunal held that mere initials of a partner in seized documents are insufficient to conclusively link them to a specific assessee firm, especially when the partner is involved in multiple entities. The Tribunal also noted inconsistencies in signatures and the lack of explicit identification in the seized materials.
The Tribunal held that the seized documents could not be conclusively attributed to the assessee firm without clear and exclusive identification. Reliance on sworn statements was also found to be unsustainable as they did not confirm the seized material belonged to the assessee firm.
The Tribunal condoned the delay in filing some appeals, citing substantial justice over technicalities. The core of the dispute revolves around the validity of assessment orders, particularly concerning the application of mind by the approving authority under Section 153D of the Act.
The Tribunal decided on various issues, including the deletion of protective additions based on loose sheets and the non-applicability of enhanced tax rates under Section 115BBE for transactions prior to April 1, 2017. The appeals were allowed, dismissed, or partly allowed as per a chart.
The Tribunal upheld the CIT(A)'s deletion of disallowance for gratuity and benevolent fund contributions, and the addition under Section 14A. However, the deletion of CSR expenses was set aside and remanded to the AO for verification.
The Tribunal held that the addition was based on uncorroborated third-party loose sheets and statements recorded without cross-examination. No evidence of actual cash receipt by the assessee was brought on record, and crucial documents lacked essential details like signature and date. Therefore, the addition made by the Assessing Officer and sustained by the CIT(A) was deleted.
The Tribunal decided to dismiss the appeal as withdrawn. The assessee had filed a letter dated 28.01.2026 explicitly seeking the withdrawal of the appeal. In light of this clear request from the assessee, the Tribunal found no impediment to allowing the withdrawal. The reasoning is based solely on the assessee's stated intention to withdraw. The ratio decidendi is that an appeal can be dismissed as withdrawn if the appellant formally requests it. The operative direction is the dismissal of the appeal. No issues were left undecided.
The Tribunal found that a sworn affidavit from the supplier confirmed the genuineness of a credit note, despite a clerical error in its date. The Tribunal also noted that the Assessing Officer failed to grant the full TDS credit in the final assessment order, despite acknowledging it in the draft order.
The Tribunal held that Section 14A disallowance can only be made if there is exempt income. As the assessee did not earn any exempt income, the disallowance made by the AO was restricted to the suo-motu disallowance made by the assessee.
The Tribunal noted that the lower authorities rejected the assessee's contentions based solely on VAT returns, without examining other crucial documents like ledgers or cash books. Considering the unusual spike in sales prior to demonetisation, but also the lack of thorough examination of evidence, the Tribunal decided to grant the assessee one more opportunity.
The Tribunal dismissed the Revenue's grounds regarding depreciation on buildings and exchange gains on FCCN, upholding the CIT(A)'s orders. It also allowed the assessee's grounds concerning R&D expenditure and disallowance under Section 14A for book profit computation. The issue of export commission was remanded to the CIT(A) for adjudication.
The Tribunal condoned the delay of 650 days in filing the appeal, citing it was not willful or wanton but due to circumstances beyond the assessee's control, including advice from counsel. However, the Tribunal found no merit in the grounds of appeal as the grievance did not emanate from the CIT(A)'s order.
The CIT(A) set aside the assessment order and directed the AO to make a fresh assessment after giving the appellant an opportunity of being heard. The Tribunal found that the CIT(A) considered the grounds of appeal, including legal issues, and that additional evidence was filed. Therefore, the CIT(A)'s action of setting aside the order and directing a fresh assessment was deemed reasonable.
The Tribunal held that the assessee has formal and systematic education in place with valid accreditation from NIOS, an autonomous body set up by the Government of India. Therefore, the assessee is eligible for registration under sections 12AB and 80G.
The Tribunal held that government securities held by the assessee are stock-in-trade and the diminution in their value is an allowable deduction. The Tribunal relied on a previous judgment in the assessee's own case by the jurisdictional High Court.
The Tribunal dismissed the Revenue's grounds regarding depreciation on buildings and exchange gains on FCCN, upholding the CIT(A)'s orders. It also allowed the assessee's grounds concerning R&D expenditure and disallowance under Section 14A for book profit computation. The issue of export commission was remanded to the CIT(A) for adjudication.
The Tribunal found that the assessee had obtained valid accreditation from NIOS, a government-established autonomous organization, and followed a systematic, NCERT-based syllabus. Consequently, the assessee was eligible for registration under section 12AB and approval under section 80G.
The Tribunal held that the CIT(E) was not justified in rejecting the application solely on grounds of a technical procedural breach or the religious nature of the trust's activities, especially when the assessee claimed to have selected the correct sub-clause and may not have received adequate opportunity to respond.
The Tribunal upheld the CIT(A)'s principle of determining income on the basis of the peak credit method. The Tribunal reasoned that in cases with repetitive deposits and withdrawals, taxing gross deposits would lead to multiple additions of the same money. The peak credit theory is a judicially accepted method to determine real income, especially when regular books of account are not maintained. The Tribunal found that the Revenue's arguments regarding the lack of substantiation for the money-lending business or the absence of a license did not detract from the applicability of the peak credit principle. It held that only the maximum amount employed at any point in time can be taxed, not cumulative deposits. The Tribunal, on perusing the assessee's peak credit working, noted the maximum peak balance of Rs.18,06,319/- as on 28.03.2011 and found no infirmity or arithmetical defect. Accordingly, the addition was directed to be restricted to Rs.18,06,319/-, subject to credit for the returned income of Rs.3,01,106/-. The CIT(A)'s order was confirmed.
The Tribunal found merit in the assessee's claim that they had a genuine reason for not appearing before the CIT(A) due to incorrect email communication. The Tribunal noted that the AO's addition was subject to revision based on a valuation report, and the CIT(A) had directed to adopt the lower of the valuation report or registering authority value.
The Tribunal held that the interest income earned from the savings bank account, which was deployed with surplus funds not immediately required for lending to members, is attributable to the business of providing credit facilities. Therefore, such income is eligible for deduction under Section 80P(2)(a)(i) of the Act. The decisions in Totgars and Citizen Co-operative Society were distinguished as not applicable to the facts of the present case.
The Tribunal condoned the delay in filing the appeal, citing reasonable and sufficient cause, and admitted the appeal for adjudication. The Tribunal remitted the appeal back to the AO for reconsideration of the issues on merits, directing the assessee to provide necessary details and cooperate with the proceedings.
The Tribunal held that the delay of 157 days in filing the quantum appeal before the Ld. CIT(A) should be condoned. The Tribunal considered the assessee to be a Primary Co-operative Credit Society and noted the ill-health of its Secretary, attributing the delay to Covid-19 complications and hospitalization. The delay was condoned subject to the assessee remitting a cost of Rs. 10,000/- to the State Legal Aid Authority, Hon'ble Madras High Court, within three months and producing proof of deposit. Consequently, the quantum appeal was set aside and restored to the file of the Ld. CIT(A) for fresh adjudication on merits. Regarding the penalty appeal, the Tribunal noted that the Ld. CIT(A) had confirmed the penalty partly due to the dismissal of the quantum appeal and the assessee's failure to substantiate its grounds. Since the quantum appeal was restored, the penalty appeal was also restored to the file of the Ld. CIT(A). The Ld. CIT(A) was directed to decide the grounds of appeal as per Section 250(6) of the Act, with the assessee directed to participate and file written submissions/documents. The Ld. CIT(A) is to pass a speaking order.
The Tribunal acknowledged the assessee's plea and the reasons for non-compliance with the Scheme. For the interest of justice and fair play, the Tribunal set aside the impugned order of the CIT(A) and restored the appeal to the CIT(A)'s file with a direction to adjudicate the grounds of appeal on merits.
The Tribunal held that the assessee had claimed the deduction under Section 80P(2)(d) of the Act, not 80P(2)(a)(i) as presumed by the lower authorities. Relying on the Supreme Court decision in Mavilayi Service Co-operative Bank Ltd. v. CIT, the Tribunal concluded that Section 80P(4) of the Act, which restricts deductions for cooperative banks functioning like commercial banks, does not apply to the assessee's claim for interest income from deposits with other cooperative banks.
The tribunal held that the assessment order was passed beyond the prescribed period of limitation, considering the stay order and subsequent vacation. Therefore, the assessment order was quashed.
The tribunal held that the addition of the entire suppressed turnover as income was unsustainable as the AO failed to establish that the assessee earned income equal to the gross sales. Only the gross profit element embedded in the suppressed turnover could be brought to tax.
The Tribunal held that the addition of the entire alleged suppressed turnover as income is unsustainable. The Assessing Officer failed to establish that the assessee earned income equal to the gross sales. The Tribunal found that the manipulation detected was sales-centric, not purchase-related, and that purchases made without invoices were incapable of entering the accounting system. The presence of barcodes does not validate recorded purchases. The AO failed to provide primary evidence like supplier invoices or bank trails for unrecorded purchases. The Tribunal noted that no undisclosed cash, excess stock, or investments commensurate with the alleged turnover were found. The limited jewellery investment was explained by the offered gross profit. The Tribunal concluded that applying a 100% profit rate to suppressed sales is unrealistic and legally impermissible. Therefore, only the gross profit element embedded in the suppressed turnover could be brought to tax. Since the assessee had voluntarily offered such gross profit, the additions made by the AO and sustained by the CIT(A) were deleted. The AO was directed to accept the income offered by the assessee on a gross profit basis for all three assessment years. The legal issues raised were left undecided as the appeals were decided on merits.
The Tribunal held that the Ld.CIT(A) erred in not appreciating the order passed by the Ld.CCIT, Coimbatore, for condoning the delay in filing the RoI. Once the delay was condoned, the basis for the CPC denying the deduction under Section 80P was vacated.
The Tribunal held that the Commissioner of Income Tax (Appeals) correctly deleted the addition. The assessee had provided sufficient documentary evidence, including cash books and bank statements, to prove that the cash deposits were sourced from legitimate receipts and not anonymous donations.
The Tribunal noted that this was the second round of litigation and the assessee should have been more diligent. However, considering the technical glitch as a plausible reason and in the interest of justice, one more opportunity was granted. A cost of ₹5,000 was imposed on the assessee for the delay.
The Tribunal noted that the assessee claimed a violation of natural justice as they did not receive notices and the orders were passed ex-parte. Citing the Supreme Court judgment in TIN Box Co. v. CIT, the Tribunal held that if an assessee is not given a proper opportunity before the AO, the assessment should be restored for de novo assessment.
The Tribunal held that the AO's reasoning for addition, based solely on the assessee being debarred from receiving Specified Bank Notes (SBNs) after a certain date, was not sustainable. The assessee had provided a nature and source of the SBNs as sale proceeds, which was supported by its audited books of accounts.
The Tribunal concurred with the CIT(A), finding that the assessee had discharged its burden by providing relevant materials to prove the expenditure. The AO failed to conduct an independent inquiry or provide the adverse information to the assessee, rendering the addition/disallowance bad in law, following the Supreme Court's decision in CIT v. Odeon Builders Pvt. Ltd.
The Tribunal held that the Hon'ble Supreme Court decision in Totgars Co-operative Sale Society Ltd. case was in the context of Section 80P(2)(a)(i) and not Section 80P(2)(d). They further relied on High Court decisions and the Banking Regulations Act, 1949, to establish that interest earned from a cooperative society bank is eligible for deduction under Section 80P(2)(d).