ITAT Cochin Judgments — June 2023

The Tribunal held that the CIT(A) was justified in dismissing the appeals due to the substantial and unexplained delay. The ITAT found no reason to interfere with this decision, even after considering the merits of the case.

The Tribunal held that the penalty under Section 271B was rightly levied for the failure to furnish the audit report within the stipulated time, irrespective of the assessee's claim of nil taxable income due to Section 80P deduction.

The Tribunal held that tax credit under Section 115JAA should be allowed against the tax per se, and not inclusive of surcharge and cess. Surcharge and cess would only become payable on the balance tax, preventing double taxation.

The Tribunal held that the CIT(A) was justified in dismissing the appeals due to the substantial and unexplained delay. The ITAT found no reason to interfere with this decision, even after considering the merits of the case.

The Tribunal held that the applicability of Section 80P deduction, especially for co-operative banks, needs to be examined in light of the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. The matter was restored to the Assessing Officer for a fresh decision.

The Tribunal found no merit in the assessee's explanation for the Rs. 25 lakh deposit, considering it a make-believe story with no factual basis. The witness produced by the assessee also failed to provide satisfactory answers.

The Tribunal found that the Assessing Officer had failed to properly examine several key aspects of the assessee's return, including a significant decline in net profit, capital additions, major expenses, agricultural income, and cash deposits. However, one issue regarding interest on fixed deposits was found to be adequately examined.

The Tribunal held that the assessee is entitled to the refund of TDS and TCS deducted under the second PAN, as both PANs ultimately represented the same entity and the income was accounted for. The Tribunal noted that the Revenue had erred in issuing PANs with incorrect names and that the issue of two PANs was resolvable by surrendering one and correcting the name in the other.

The Tribunal held that the remuneration received by the assessee was in the nature of salary from employment, not fees for technical services. However, the matter was remitted back to the AO for fresh adjudication to determine the taxability and the assessee's eligibility for exemption under Section 10(6)(viii).

The Tribunal noted that the Supreme Court in Malvilayi Service Co-operative Bank Ltd. held that Primary Agricultural Credit Societies are entitled to Section 80P deduction, even for non-agricultural loans to members, but not for loans to non-members. The Tribunal found that the CIT(A) had not fully considered the Supreme Court's judgment in light of the facts.

The Tribunal noted that the Supreme Court in Malvilayi Service Co-operative Bank Ltd. held that Primary Agricultural Credit Societies are entitled to Section 80P deduction, even for non-agricultural loans to members, but not for loans to non-members. The Tribunal found that the CIT(A) had not fully considered the Supreme Court's judgment in light of the facts.

The Tribunal noted that the Supreme Court in Malvilayi Service Co-operative Bank Ltd. held that Primary Agricultural Credit Societies are entitled to Section 80P deduction, even for non-agricultural loans to members, but not for loans to non-members. The Tribunal found that the CIT(A) had not fully considered the Supreme Court's judgment in light of the facts.

The Tribunal held that the penalty under section 271B was not leviable as the assessee had a reasonable cause for not complying with the audit requirements. The appeals were allowed on this ground.

The Tribunal held that the employees' contribution to the Employees' Welfare Fund is governed by Section 36(1)(va) and must be deposited by the due date specified under the relevant welfare legislation to be deductible. Failure to meet this condition means the amount cannot be claimed as a deduction.

The Tribunal held that the penalty under section 271B was not leviable as the assessee had a reasonable cause for not complying with the audit requirements. The appeals were allowed on this ground.

The Tribunal upheld the Pr. CIT's order, finding that the AO's failure to investigate the significant difference between the purchase consideration and the stamp duty value made the assessment erroneous and prejudicial to the revenue. The assessee's technical objections regarding the notice were also rejected.

The Tribunal held that processing charges should be included in total turnover but not excluded from business profits. Processing rent, being independent income, should not be part of total turnover but reduced from business profits by 90%. Discount on tin plates was correctly not reduced.

The Tribunal held that the CIT(A) had not properly appreciated the ratio decidendi of the Supreme Court's decision in Malvilayi Services Co-operative Bank Ltd. The AO and CIT(A) incorrectly concluded that the assessee was ineligible for deduction under Section 80P(2)(a)(i) solely because its agricultural credit disbursement was low and it was functioning like a bank. The Tribunal noted that the Supreme Court in Malvilayi Services Co-operative Bank Ltd. held that Section 80P is a benevolent provision to be read liberally, and a deduction given without restriction cannot be limited by implication. The Court also clarified that Section 80P(4) excludes co-operative banks engaged in banking business with an RBI license. Crucially, the Supreme Court held that assessees are entitled to deduction under Section 80P(2)(a)(i) even if they give loans not related to agriculture, provided such loans are to members. The Tribunal observed that the AO had not benefited from this decision and that facts relevant to claiming deduction under Section 80P(2)(a)(i) needed fresh examination, particularly concerning loans to members versus non-members, as income from loans to non-members is not deductible. Therefore, the issue was restored to the AO for fresh examination in light of the Supreme Court's ruling.

The Tribunal held that the levy of late fee under Section 234E is prospective from June 1, 2015, following the jurisdictional High Court's decision. Therefore, levies for periods prior to this date are not legally sustainable.

The Tribunal noted that the assessee raised defenses of 'reasonable cause' for the delay and also questioned the limitation period for issuing the penalty notice. Since these grounds were not examined by the lower authorities, the Tribunal set aside the order and restored the issue to the AO for fresh examination.

The Tribunal held that the assessee did not have a reasonable cause for not filing the tax audit report, especially after becoming aware of the requirement for a subsequent assessment year. Therefore, the penalty levied under Section 271B was confirmed.

The Tribunal held that the levy of late fee under Section 234E is prospective from June 1, 2015, following the jurisdictional High Court's decision. Therefore, levies for periods prior to this date are not legally sustainable.

The Tribunal held that furnishing the audit report in the prescribed form (Form 3CA) along with a further report by an accountant was a mandatory requirement for compliance with Section 44AB. The statutory audit report under the Co-operative Societies Act alone was not sufficient, and no reasonable cause was established for non-compliance.

The Tribunal found that the CIT(A) did not properly appreciate the facts and the ratio of the Supreme Court decision in Malvilayi Service Co-operative Bank Ltd. The Tribunal noted that the assessee is a Primary Agricultural Credit Society and its income from providing credit facilities to members is eligible for deduction.

The Tribunal held that the assessee failed to comply with the mandatory requirements of Section 44AB by not furnishing the audit report in the prescribed form. Since no reasonable cause was demonstrated for this failure, the penalty under Section 271B was upheld.

The Tribunal found that the CIT(A)'s order was ex-parte and not on merits. Therefore, the order was set aside, and the appeals were restored to the file of the CIT(A) for a fresh disposal.

The Tribunal held that the levy of late filing fee under Section 234E for periods prior to June 1, 2015, is bad in law. This is because the amendment to Section 200A enabling the levy of such fees was prospective, effective from June 1, 2015.

The Tribunal held that the levy of late filing fee under Section 234E for periods prior to June 1, 2015, is bad in law. This is because the amendment to Section 200A enabling the levy of such fees was prospective, effective from June 1, 2015.

The Tribunal found that the CIT(A)'s order was ex-parte and not on merits. Therefore, the order was set aside, and the appeals were restored to the file of the CIT(A) for a fresh disposal.

The Tribunal held that the CIT(A)'s order was passed without application of mind as the assessee had indeed filed submissions. The impugned order was set aside, and the appeal was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the disallowance was incorrect as the assessee had claimed the deduction in Schedule BP, and the CPC should have issued a notice before making the adjustment. The assessee, being a primary agricultural credit society, is entitled to the deduction.