ITAT Cochin Judgments — January 2025

The Tribunal held that the CIT(A) erred in dismissing the appeal *in limine* for non-prosecution without adjudicating on the merits. Citing precedent, the Tribunal ruled that the CIT(A) is duty-bound to dispose of appeals on merits, even if heard *ex parte*.

Respectfully following the Jurisdictional High Court's decision, the Tribunal held that the assessee is entitled to a deduction under Section 80P(2)(d) of the Act for interest received from District Co-operative Bank and Treasury. Interest income earned from co-operative societies registered under the Kerala Co-operative Societies Act is eligible for deduction.

The Tribunal held that a CIT(A) is duty-bound to dispose of an appeal on merits, even if ex parte, and cannot dismiss it in limine for non-prosecution. Consequently, the matter was remanded back to the file of the CIT(A) for a de novo disposal on merits after providing a reasonable opportunity of hearing to the assessee.

The Income Tax Appellate Tribunal (ITAT) noted that the Senior Departmental Representative had no objection to the withdrawal request. Consequently, the tribunal dismissed the present appeal as withdrawn, recognizing it as a duplicate of another appeal already pending.

The ITAT, citing the Punjab & Haryana High Court, ruled that notice service via the ITBA portal is not valid under Section 282(1) of the Income-tax Act and Rule 127(1). Consequently, the matter was remanded to the CIT(A) for a fresh disposal after granting the assessee a proper hearing opportunity.

The Tribunal, acknowledging the appellant's claim of not being given a reasonable opportunity to explain the cash deposit's source before the CIT(A), remanded the matter to the CIT(A) for a de novo assessment, ensuring a proper opportunity of hearing.

The Tribunal held that a CIT(A) is obligated to dispose of an appeal on merits, even if dismissed ex parte for non-prosecution. Citing a High Court decision, the Tribunal remanded the case to the CIT(A) to decide the appeal de novo on merits, ensuring a reasonable opportunity of hearing for the assessee.

The tribunal permitted the assessee to withdraw the appeals. It granted the assessee the liberty to revive these appeals if their applications filed under Form No. 1 of the DTVSV Scheme are rejected for any reason.

The Income Tax Appellate Tribunal, relying on a recent Jurisdictional High Court decision in the case of Chavakkad Service Co-op Bank Ltd., found that the assessee had demonstrated reasonable cause for the belated filing of audit reports. Since no prejudice was caused to the department, the Tribunal deleted the penalty levied under Section 271B by the AO and confirmed by the CIT(A).

The Tribunal held that the CIT(A) erred in dismissing the appeal in limine for non-prosecution, emphasizing that it is settled law that the CIT(A) is duty-bound to dispose of appeals on merits, even when heard ex parte. Consequently, the matter was remanded to the CIT(A) for de novo disposal on merits after providing a reasonable opportunity of hearing to the assessee.

The Tribunal, considering that the original assessment was previously set aside to the AO, and upon the request of the assessee's representative which was not objected to by the Department's representative, decided to remand the appeal concerning the Section 148 assessment back to the file of the Assessing Officer. This remand is for the AO to decide the issue afresh in accordance with law.

The Tribunal held that as the assessee was a Section 8 company registered under Section 12AA and was not carrying on any business, the provisions of Section 44AB were not applicable to its case. Consequently, the levy of penalty under Section 271B for non-compliance with Section 44AB was unwarranted and contrary to the Act. The AO was directed to delete the penalty.

The Income Tax Appellate Tribunal noted that both the AO and CIT(A) had confirmed the penalty without properly considering the assessee's application for immunity under Section 270A on its merits. Consequently, the Tribunal restored the matter to the file of the AO for a fresh examination of the immunity application, leaving all contentions open.

The Tribunal, citing a High Court judgment, held that notices issued through the ITBA portal by the CIT(A) were not valid service as per Section 282(1) of the Income-tax Act and Rule 127(1) of the Income-tax Rules. Consequently, the matter was remanded back to the CIT(A) for fresh disposal after affording the assessee an opportunity of hearing.

The ITAT held that the CIT(A) erred by rejecting the application for condonation of delay without providing reasons and then proceeding to decide the appeal on merits, contrary to Supreme Court precedent. The ITAT found the CIT(A)'s order ambiguous and not justified. The case was remanded back to the CIT(A) for de novo adjudication after properly considering the condonation of delay request.

The Tribunal held that under Section 43CB of the Income Tax Act, effective from AY 2017-18, contract revenue includes retention money. Therefore, the assessee, following the mercantile system, should account for retention money as income. However, the Tribunal remitted the issue to the AO to verify if the retention money was offered to tax in subsequent years to avoid double taxation.

The Tribunal reversed the addition of Rs. 57 lakhs related to the revaluation of software, directing its deletion. It also allowed depreciation claims, directing the AO to verify them. Crucially, the reassessment proceedings in the second appeal were quashed due to invalid reasons, rendering subsequent orders infructuous.

The Tribunal restored the issue to the Assessing Officer for verification of Form 27C declarations. If found in order, the demand for short collection of tax and interest thereon is to be cancelled. Penalties levied under Section 221(1) were also cancelled.

The Tribunal restored the issue to the CIT(E) to verify the assessee's claim of past activities, temporary suspension due to paucity of funds, and recommencement of activities. The CIT(E) was directed to decide the application after verification and providing an opportunity of hearing.

The Tribunal found that the assessee had provided evidence of receiving the intimation on a later date, which meant the appeal was filed within the prescribed time. Therefore, the case was restored to the CIT(A) for adjudication on merits.

The Tribunal followed a coordinate bench's decision and restored the issue to the Assessing Officer to verify Form 27C. Penalties levied under Section 221(1) were also cancelled as they were consequential to the primary issue.

The Tribunal restored the issue to the Assessing Officer to verify if the interest income and miscellaneous income are attributable to the business of providing credit facilities. The assessee must substantiate its claim with necessary details.

The Tribunal reversed the addition of Rs. 57 lakhs related to the revaluation of software, directing its deletion. It also allowed depreciation claims, directing the AO to verify them. Crucially, the reassessment proceedings in the second appeal were quashed due to invalid reasons, rendering subsequent orders infructuous.

The Tribunal, following a coordinate bench's decision on identical facts, restored the issue to the Assessing Officer for verification of Form 27C. Penalties levied under Section 221(1) were also cancelled as they were consequential to the primary issue.

The Tribunal held that the CIT(A) erred in upholding the best judgment assessment under Section 144. The assessee had filed a return in response to a Section 142(1) notice, and the delay was a technical defect that should have been considered.

The Tribunal restored the issue to the Assessing Officer for verification of Form 27C declarations. If found in order, the demand for short collection of tax and interest thereon is to be cancelled. Penalties levied under Section 221(1) were also cancelled.