ITAT Cochin Judgments — March 2023

The Tribunal found that the CIT(A)'s observations did not arise from the provided statement. Consequently, the Tribunal remanded the entire appeal to the Assessing Officer for a fresh verification of the assessment.

The Tribunal held that the Principal CIT erred in assuming jurisdiction under Section 263 as the Assessing Officer had made sufficient inquiries and the order was not erroneous or prejudicial to the revenue. The Tribunal found that the issues raised by the PCIT were already considered by the AO during the assessment proceedings.

The Tribunal held that the Assessing Officer's verification was limited and that CSR expenditure is not allowable under Section 37. However, if the expenditure was an obligation to local authorities for business nexus, it should be considered allowable.

The Tribunal held that the subsidy received from the Tea Board for replanting/rejuvenation should be treated as income derived from tea operations and assessed under Rule 8. It also found that the assessee's undertaking met the criteria for deduction under Section 80IA for renovation and modernization of its electricity distribution network.

The Tribunal found that the AO did not follow CBDT circulars regarding cash deposits during demonetization and did not conduct necessary verifications. The Tribunal remands the issue to the AO for fresh verification with proper opportunity for the assessee to be heard.

The Tribunal found that the assessee claimed no notice was received and the AO's assessment was made without proper appreciation of facts. Therefore, the appeal was remanded back to the CIT(A) for a fresh decision on merits.

The Tribunal held that the issue regarding commercial tax needed to be remanded to the CIT(A) for fresh consideration based on documents. Regarding legal charges, the Tribunal found that payments to two different parties were below the TDS threshold and directed the AO to allow the claim.

The Tribunal held that interest received at 9% on additional compensation is an accretion to value and not taxable. However, interest at 15% for delayed payment of compensation is taxable as income.

The Tribunal held that Section 36(1)(va) and Section 43B operate independently, and delayed employee PF contributions are not deductible. This decision is based on the Supreme Court's ruling in Checkmate Services Pvt Ltd.

The Tribunal held that the revision was permissible for issues related to non-verification of huge claims for expenditure, and the absence of enquiry on certain expenses rendered the AO's order erroneous. However, for other issues, the Tribunal found that the AO had adequately considered the matter or the revision was not warranted.

The Tribunal held that initiating penalty proceedings for one limb of Section 271(1)(c) and imposing it for another limb violates the principles of natural justice and the requirement of law. The penalty must be clearly imposed for the specific offense for which it is levied.

The Tribunal held that the delay in filing the audit report was a technical breach, not intentional, and did not cause any loss to the revenue. The audit report was filed before the assessment proceedings commenced.

The Tribunal held that the interest income of Rs. 20,91,034 earned by the assessee from investments in the District Co-op. Bank and Sub-treasuries is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961. The Tribunal reasoned that for a cooperative bank, earning interest on such investments constitutes a banking activity. It distinguished the Supreme Court's decision in Totgar Cooperative Sales Society, stating it was not applicable to cooperative societies whose business is banking. The Tribunal relied on its own previous decisions in The Kizhathadiyoor Service Coop Bank Ltd. vs. ITO and Ms. The Kizhathadiyoor Service Co-operative Bank Ltd., which held that interest earned on investments with sub-treasuries and banks was eligible for deduction under Section 80P(2)(a)(i). The AO was directed to grant the deduction. The issue regarding deduction under Section 80P(2)(a)(i) for primary agricultural credit society activities was implicitly allowed by the CIT(A) and not challenged by the revenue before the Tribunal.

The Tribunal held that the CIT(E) wrongly invoked Section 263 as the AO had made specific inquiries regarding Section 2(15) and the assessee had provided a detailed reply. The AO had taken a conscious decision based on the submissions, and the CIT(E) did not provide sufficient material to deem the AO's order erroneous and prejudicial to revenue.

The ITAT condoned a 6-day delay in filing the appeals and, on merits, deleted the penalties. It held that no penalty is leviable under Section 271B if the audit reports are filed before the completion of assessment proceedings and acknowledged by the Assessing Officer, following a Co-ordinate Bench decision and a Madras High Court judgment.

The ITAT condoned a 6-day delay in filing the appeals and, on merits, deleted the penalties. It held that no penalty is leviable under Section 271B if the audit reports are filed before the completion of assessment proceedings and acknowledged by the Assessing Officer, following a Co-ordinate Bench decision and a Madras High Court judgment.

The Tribunal found that the CIT(A) passed an ex parte order without examining the merits. Therefore, both the addition on account of rental income and the disallowance of interest were remitted back to the CIT(A) for fresh consideration.

The Tribunal noted that the CIT(A) failed to consider the Supreme Court's decision which had reversed the Kerala High Court ruling. Therefore, the issue was remitted back to the CIT(A) for reconsideration.

The Tribunal held that the assessee cannot suffer for the inaction of revenue authorities when an application for approval has been made and followed up. Citing High Court decisions, the Tribunal allowed the deduction.

The Tribunal held that the denial of deduction under Section 80P through an intimation under Section 143(1)(a) was not permissible. The specific clauses for adjustment under Section 143(1)(a) did not cover this situation for the relevant assessment year, and the jurisdictional High Court had allowed such claims even when filed belatedly.

The Tribunal noted that the AO disallowed the Section 80P deduction in two parts: interest income and business income. The CIT(A) only adjudicated the interest income issue. Following the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd., the Tribunal restored the issue of deduction under Section 80P(2)(a)(i) to the AO for fresh examination.

The Tribunal held that employees' contribution paid beyond the due date prescribed under the PF/ESI Act cannot be allowed as a deduction, following the Supreme Court's decision in Checkmate Services (P) Ltd.

The Tribunal held that the AO had taken a plausible view by taxing only the profit element of the turnover, not the entire undisclosed turnover. The PCIT's revision order was deemed erroneous as the AO had applied his mind and made a reasonable assessment.

The Tribunal held that the omission was inadvertent, especially since the Form 16 from the previous employer was not available at the time of filing the return. The penalty was not warranted as there was no tax sought to be evaded, and the amount of tax due after rectification was negligible.

The Tribunal held that the CIT(E) wrongly invoked Section 263 as the AO had made specific inquiries regarding Section 2(15) and the assessee had provided a detailed reply. The AO had taken a conscious decision based on the submissions, and the CIT(E) did not provide sufficient material to deem the AO's order erroneous and prejudicial to revenue.

The Tribunal found that the assessee had not substantiated its claim for exemption under Section 10(23C)(iiiad) with relevant documents. Given the discrepancies and lack of proper clarification, the issue was remitted back to the AO for fresh examination.

The Tribunal noted that the lower authorities had not factually examined whether the amount was a bad debt write-off or a reversal of inadvertently offered interest. Therefore, the issue was remitted back to the AO for fresh consideration.

The Tribunal held that prior to 01.06.2015, Section 200A of the IT Act did not have an enabling provision for levying fees under Section 234E. Following the jurisdictional High Court's decision, the levy of late fees for the period before 01.06.2015 was invalid.

The Tribunal held that the PCIT was not justified in setting aside the assessment order. The provisions made by the assessee did not exceed the limit prescribed under Section 36(1)(viia)(d) for NBFCs, and therefore, no disallowance was warranted.

The Tribunal held that the Commissioner (Appeals) erred in confirming the addition without affording a proper opportunity to the assessee. The Tribunal decided to grant one more opportunity to the assessee to submit the necessary details.

The Tribunal held that the assessee's belief of NIL income due to Section 80P deduction did not constitute a reasonable cause for the delay in obtaining the Section 44AB audit report. The turnover, not taxable income, determines the requirement for Section 44AB audit.

The Tribunal noted that a coordinate bench had previously remitted a similar issue back to the AO. Following this precedent and considering the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd., the Tribunal decided to examine the issue de novo.

The Tribunal held that employee contributions to PF and ESI must be remitted before the due date specified under the relevant welfare legislation for them to be allowable as a deduction under Section 43B. The Supreme Court's decision in Checkmate Services was relied upon.

The Tribunal condoned the delay in filing the appeal and, considering the assessee's claim of not receiving hearing notices due to the pandemic, restored the matter to the CIT(A). The assessee was directed to cooperate and the CIT(A) was instructed to provide a reasonable opportunity for submissions.

The Tribunal held that the addition under Section 69 was incorrect as the source and identity of the payer were established through banking channels. However, the alternative claim of treating the amount as sale consideration for capital gains was not properly considered by the lower authorities.

The Tribunal held that employee's contribution to PF/ESI must be paid before the due dates specified in the respective Acts to be eligible for deduction. Payment before the due date for filing the return of income is not sufficient for employee contributions.

The Tribunal directed the CIT(A) to admit the appeal and adjudicate the issues on merits, considering the affidavit filed by the assessee regarding the reasons for delay. The CIT(A)'s rejection of the appeal without condoning the delay was set aside.

The Tribunal held that the denial of deduction under Section 80P through an intimation under Section 143(1)(a) was not permissible. The amended provisions of Section 143(1)(a)(v) were not applicable to the assessment year in question, and the 'incorrect claim' clause was also not applicable.

The Tribunal, relying on the jurisdictional Kerala High Court's decisions, held that the amendment to Section 200A(1) is prospective in nature. Therefore, no late filing fee under Section 234E could be levied for periods prior to June 1, 2015, even if the processing of the TDS statements occurred after this date. The Revenue authorities' orders were deemed unsustainable in law for the State of Kerala.

The Tribunal condoned the delay in filing appeals before it, noting that the condonation petitions before the CIT(A) were filed by an incorrect authority. The matter was remanded to the CIT(A) to consider fresh condonation petitions filed by the correct authority.

The Tribunal condoned the delay in filing the appeal and restored the matter to the CIT(A) for adjudication on merits, granting one more opportunity to the assessee.

The Tribunal held that employees' contribution paid beyond the due dates prescribed under the PF/ESI Act cannot be allowed as a deduction, following the Supreme Court's decision in Checkmate Services (P) Ltd.

The Tribunal, relying on the jurisdictional Kerala High Court's decisions, held that the amendment to Section 200A(1) is prospective in nature. Therefore, no late filing fee under Section 234E could be levied for periods prior to June 1, 2015, even if the processing of the TDS statements occurred after this date. The Revenue authorities' orders were deemed unsustainable in law for the State of Kerala.

The Tribunal acknowledged the assessee's failure to respond to multiple notices, stating it strongly deprecated the assessee's attitude. However, in the interest of justice and equity, the Tribunal decided to grant one more opportunity to the assessee to present its case. Regarding the prayer to be treated as an AOP and for the return filed in ITR-7 to be considered appropriate, the Tribunal noted that these issues could not be adjudicated by the CPC during the Section 143(1) intimation process. Therefore, the Tribunal decided to remand the matter to the jurisdictional Assessing Officer (AO). The AO was directed to afford a reasonable opportunity to the assessee to present its case before making a decision. The assessee was directed to cooperate with the Revenue and avoid seeking adjournments without reasonable cause. The appeal was allowed for statistical purposes.

The Tribunal, relying on the jurisdictional Kerala High Court's decisions, held that the amendment to Section 200A(1) is prospective in nature. Therefore, no late filing fee under Section 234E could be levied for periods prior to June 1, 2015, even if the processing of the TDS statements occurred after this date. The Revenue authorities' orders were deemed unsustainable in law for the State of Kerala.

The Tribunal, relying on the jurisdictional Kerala High Court's decisions, held that the amendment to Section 200A(1) is prospective in nature. Therefore, no late filing fee under Section 234E could be levied for periods prior to June 1, 2015, even if the processing of the TDS statements occurred after this date. The Revenue authorities' orders were deemed unsustainable in law for the State of Kerala.

The Tribunal, relying on the jurisdictional Kerala High Court's decisions, held that the amendment to Section 200A(1) is prospective in nature. Therefore, no late filing fee under Section 234E could be levied for periods prior to June 1, 2015, even if the processing of the TDS statements occurred after this date. The Revenue authorities' orders were deemed unsustainable in law for the State of Kerala.

The Tribunal, relying on the jurisdictional Kerala High Court's decisions, held that the amendment to Section 200A(1) is prospective in nature. Therefore, no late filing fee under Section 234E could be levied for periods prior to June 1, 2015, even if the processing of the TDS statements occurred after this date. The Revenue authorities' orders were deemed unsustainable in law for the State of Kerala.

The Tribunal held that the assessee claimed to have settled only the penalties under the Vivad-se-Vishwas Scheme, not the assessment itself. Therefore, the CIT(A) needed to examine this claim and decide the appeal on merits.

The Tribunal held that the assessee is eligible for TDS credit of his deceased wife as he has declared the income pertaining to the said TDS in his return. The Tribunal relied on judicial pronouncements supporting this view.