ITAT Cuttack Judgments — December 2019

The Tribunal held that the omission to issue a notice under Section 143(2) is a fatal procedural defect, not curable, and renders the assessment order void ab initio. The assessment order cannot be sustained in the absence of this mandatory notice.

The Tribunal condoned the delay in filing the appeal. It held that the addition of Rs. 10,00,000/- was not justified as the assessee had provided confirmations and PAN cards, and the onus was on the AO to controvert this evidence. The addition of Rs. 2,43,352/- out of the sundry creditors' discrepancies was deleted.

The Tribunal held that the AO failed to provide positive evidence to establish that the assessee made undisclosed investments. It was also observed that the payment was made by a third party on behalf of the assessee, and the existence of the creditor was not in doubt.

The Tribunal held that the estimation of profit by the AO was baseless and not supported by evidence. It ruled that losses from derivative trading on a recognized stock exchange should be treated as normal business loss and allowed for set-off against other income.

The Tribunal held that no addition on account of closing stock was warranted as the assessee had already declared profit at a rate higher than prescribed under Section 44AF and was not required to maintain detailed books of account. Regarding unexplained investment, the Tribunal found that the assessee had sufficient sources of funds from her own savings, sale of property, and inheritance from her parents.

The Tribunal held that the Pr. CIT rightly invoked revisionary powers under Section 263 as the AO had not properly enquired into the 'Commission Exchange & Brokerage' receipts, and the assessee was unable to substantiate that this issue was examined by the AO.

The Tribunal condoned the delay in filing the appeals. For the husband's appeal, it confirmed the addition of Rs. 50 lakhs as deemed dividend under Section 2(22)(e) but deleted other additions under Section 68. For the wife's appeal, it deleted the addition of Rs. 50 lakhs as unexplained cash credit.

The Tribunal held that the approval granted by the Joint Commissioner (JCIT) under Section 151 was invalid because the reasons for reopening were recorded after the approval was sought and granted. This indicated a lack of application of mind by the JCIT.

The Tribunal held that the penalty notice issued under Section 274 r.w.s. 271(1)(c) was bad in law as it was issued in a stereotyped manner without applying mind and did not specify the exact limb of Section 271(1)(c) under which penalty was being levied. This was based on decisions of the Karnataka High Court and the Supreme Court.

The Tribunal held that the penalty notice issued by the AO was defective as it was in a stereotyped format without specifying the exact limb of Section 271(1)(c) under which penalty was being levied. This indicated a non-application of mind by the AO.

The Tribunal held that the penalty notice issued under Section 274 r.w.s. 271(1)(c) was bad in law as it was issued in a stereotyped manner without applying mind and did not specify the exact limb of Section 271(1)(c) under which penalty was being levied. This was based on decisions of the Karnataka High Court and the Supreme Court.

The Tribunal held that the penalty notice issued under Section 274 r.w.s. 271(1)(c) was bad in law as it was issued in a stereotyped manner without applying mind and did not specify the exact limb of Section 271(1)(c) under which penalty was being levied. This was based on decisions of the Karnataka High Court and the Supreme Court.

The Tribunal found that the CIT(A) had not considered the additional grounds of appeal filed by the assessee. Therefore, the appeal was restored to the CIT(A) for a fresh consideration.

The Tribunal held that the revisional proceedings under Section 263 were initiated improperly, as the Pr. CIT did not follow the prescribed procedure. Furthermore, the Tribunal found that the AO had conducted sufficient inquiries on the limited scrutiny points and the assessment order was neither erroneous nor prejudicial to the revenue.

The Tribunal held that the Assessing Officer lacked valid jurisdiction to initiate reassessment proceedings as there was no new tangible material before him. Consequently, the reassessment proceedings and the consequent orders were quashed.

The Tribunal restored the Section 43B issue to the AO for reconsideration based on the outcome of the assessee's appeal pending before the High Court. The disallowance under Section 14A was upheld to the extent confirmed by the CIT(A).

The Tribunal held that the penalty under Section 271A could not be sustained as the assessee had produced a tax audit report certifying the maintenance of books, and a reasonable cause was provided for their non-production. The revenue failed to provide cogent material to prove non-maintenance.

The Tribunal restored the Section 43B issue to the AO for reconsideration based on the outcome of the assessee's appeal pending before the High Court. The disallowance under Section 14A was upheld to the extent confirmed by the CIT(A).

The Tribunal held that although the advance was not fully utilized in the relevant financial period, it was subsequently used for construction. Since the income from the property was taxed in the hands of the assessee, the disallowed portion of the interest should be allowed.

The Tribunal held that the penalty under Section 271A could not be sustained as the assessee had produced a tax audit report certifying the maintenance of books, and a reasonable cause was provided for their non-production. The revenue failed to provide cogent material to prove non-maintenance.

The Tribunal held that Section 194C is not applicable as there was no contract between the assessee and the labour sardars. Therefore, the disallowance under Section 40(a)(ia) was not sustainable.

The Tribunal held that the reopening of assessment under Section 147 was bad in law as it was based on a change of opinion without any new material. The Tribunal quashed the reassessment orders.

The Tribunal found that the assessee was unable to appear before the CIT(A) due to unavoidable circumstances. Therefore, the matter was set aside to the Assessing Officer for a denovo assessment to provide the assessee with an opportunity to present their case and evidence.

The Tribunal held that the reopening of assessment under Section 147 was bad in law as it was based on a change of opinion without any new material. The Tribunal quashed the reassessment orders.

The Tribunal condoned the delay in filing the appeal. Considering the assessee's own case for a previous year where a lower profit rate was accepted, the Tribunal reduced the estimated profit rate from 12% to 10%.

The Tribunal held that the CIT(E) erred in discontinuing the registration solely based on the increased income from commercial lease rent, especially when the assessee's objects were charitable and had been granted registration previously. The Tribunal emphasized that cancellation or restriction of registration requires following due procedure under Section 12AA(3) & (4).

The Tribunal held that the assessee had sufficiently explained deposits totaling Rs. 4,04,766/- through bank statements showing maturity of recurring deposits of his wife and son, and a withdrawal followed by a deposit. However, the deposit of Rs. 50,000/- remained unexplained.

The Tribunal found that the CIT(A) dismissed the appeal without considering the merits. Therefore, the order of the CIT(A) was set aside and restored to his file for fresh adjudication.

The Tribunal held that the amended provisions of Section 194C(6) of the Income Tax Act, which were effective from 01.06.2015, could not be applied retrospectively to the assessment year 2011-12. Therefore, the addition made by the AO and confirmed by the CIT(A) was not sustainable.