ITAT Cuttack Judgments — January 2025

The Tribunal, as a statutory authority, is bound by the literal interpretation of the Income Tax Act and cannot amend or rewrite its provisions. It noted that the CBDT circular relied upon by the assessee did not list its name specifically. The Tribunal held that powers to condone technical violations for refunds lie with the CBDT under Section 119(2)(b), where the assessee had already filed a petition. Finding no error in the orders of the CIT(A) and Assessing Officer, the Tribunal dismissed the appeal.

The Tribunal condoned the delay in filing the appeal, finding the reasons to be genuine. It restored the matter to the CIT(A) for fresh adjudication, directing the assessee to produce all necessary documents and evidences. The Tribunal also imposed a cost of Rs.10,000 on the assessee, payable to the ITAT Bar Association, for failing to comply with notices, with non-payment leading to confirmation of the CIT(A)'s order.

The Tribunal found that the CIT(Exemptions)'s order of rejection was non-speaking, lacking detailed reasons as required by the Act. In the interest of justice, the Tribunal restored the matter to the file of the CIT(Exemptions) for re-adjudication, granting liberty to call for any further details required.

The Tribunal upheld the invocation of Section 145(3) due to incomplete financial details and improper audit reporting. However, considering the nature of the petrol pump business with low commission and the 0.52% profit rate accepted in a subsequent assessment year, the Tribunal deemed the 1% profit rate excessive. It directed the Assessing Officer to apply a net profit rate of 0.05% on the declared turnover for the assessment year 2018-19.

The Tribunal held that the assessee had a bona fide explanation for not filing the return of income within the statutory due date. The delay was attributed to the Directorate of Cooperative Audit appointing auditors for five financial years, including the assessment year under appeal, only on 29.11.2021, long after the due date of 30.09.2019 for filing returns under section 139(1). This constituted a reasonable cause under section 270A(6)(a).

The Tribunal found that the CIT(Exemptions)'s order was not a speaking order as required by law, as it failed to provide detailed reasons for rejection. Therefore, the issues were restored to the CIT(Exemptions) for readjudication, with the liberty to seek further details.

The Tribunal observed that the CIT(Exemptions)'s orders of rejection were non-speaking, lacking detailed reasons, which is contrary to the provisions of the Act requiring detailed reasons for rejection. Consequently, the Tribunal restored the matter to the file of the CIT(Exemptions) for readjudication, directing the passing of a speaking order after considering all available materials and allowing the CIT(Exemptions) to call for further details.

The Tribunal found that the CIT(E)'s rejection orders were not 'speaking orders' and lacked detailed reasons, which is a requirement of the Act. Consequently, the Tribunal restored the matter to the file of the CIT(Exemptions) for re-adjudication, granting the CIT(E) liberty to seek further details as necessary for a proper decision on the registration applications.

The Tribunal found that the CIT(E)'s order rejecting the 80G registration was indeed a non-speaking order, failing to provide detailed reasons as required by the Act. In the interest of justice, the Tribunal restored the matter to the file of the CIT(E) for readjudication, granting the CIT(E) the liberty to call for any further necessary details.

The Tribunal observed that the CIT(Exemptions)'s rejection orders were indeed non-speaking and failed to provide detailed reasons. Consequently, the Tribunal restored the matter to the file of the CIT(Exemptions) for readjudication, allowing the CIT(Exemptions) to reconsider the applications and call for any further required details.

The Tribunal found the CIT(E)'s rejection order was not a speaking order and lacked detailed reasons as mandated by the Act. Consequently, in the interest of justice, the matter was restored to the CIT(E) for readjudication, allowing them to request further necessary details.

The Tribunal found that the CIT(Exemptions)'s order was indeed non-speaking and that the Act requires detailed reasons for rejecting such applications. Consequently, the case was restored to the file of the CIT(Exemptions) for readjudication, with a direction to pass a speaking order after considering all available materials and potentially calling for further details.

The Tribunal found that the JCIT's approval under Section 153D was granted without proper application of mind, citing the physical impossibility of reviewing numerous assessment orders and related documents for 84 cases within one day. Following the principle established in Serajuddin and Co., the Tribunal held the approval invalid and consequently annulled the assessment orders for the lead case and all other appeals.

The Tribunal found that the CIT(E)'s order was non-speaking and failed to provide detailed reasons for rejecting the registration application, as required by law. With no objection from the Revenue, the Tribunal restored the matter to the CIT(E) for fresh readjudication, allowing the CIT(E) to seek further details for the 12AB registration.

The Tribunal found that the CIT(E)'s orders were indeed non-speaking and did not furnish detailed reasons for the rejection of the registration applications, which is a requirement of the Act. In the interest of justice, the Tribunal restored the appeals to the file of the CIT(E) for re-adjudication, allowing the CIT(E) the liberty to seek any further details deemed necessary.

The Tribunal found that the CIT(E)'s orders of rejection were not speaking orders, lacking detailed reasons as required by the Act. Consequently, in the interest of justice, the Tribunal restored the appeals to the file of the CIT(E) for re-adjudication, allowing the CIT(E) to request additional details.

The Tribunal dismissed Ground 1, holding that the AO acted within the scope of limited scrutiny in examining the source and genuineness of loans used for share investments, as the primary reason for scrutiny was undisclosed share transaction income/investments. For Ground 2, regarding the Rs. 44 lakhs addition under Section 68, the Tribunal noted that the assessee provided some evidence (affidavits, PAN/Aadhaar, bank withdrawal explanations) which the AO failed to verify. Therefore, the issue was set aside to the AO for fresh verification with a reasonable opportunity to the assessee.

The Tribunal, in the interest of justice, decided to restore the matter to the file of the Assessing Officer for a fresh assessment. The Assessing Officer is directed to provide the assessee with a reasonable opportunity of hearing, and the assessee is directed to produce all required evidences for completion of the assessment afresh.

The Tribunal held that the penalty, having been levied after the completion of assessment proceedings, implied that the Assessing Officer had condoned the non-compliance. Furthermore, the assessee had demonstrated a reasonable cause for non-compliance due to his mother's illness. Consequently, the penalties under Section 272A(1)(d) for all four assessment years were deleted.

The Tribunal observed that penalties u/s 272A(1)(d) are intended for non-compliance during assessment proceedings, but in this case, the Assessing Officer levied them after the completion of assessment orders, indicating an implied condonation of non-compliance. Furthermore, the Tribunal recognized the reasonable cause demonstrated by the assessee regarding his mother's illness. Consequently, the penalties levied by the Assessing Officer and confirmed by the CIT(A) were deleted.

The Tribunal observed that the penalty was levied by the Assessing Officer after the assessment proceedings were complete, implying a condonation of the non-compliance. It also accepted the assessee's reasonable cause for non-compliance, attributing it to his aged mother's severe illness. Consequently, the levied penalties were deleted.

The Tribunal noted that while the AO levied a penalty for non-compliance, the assessments for all years were completed under section 153A r.w.s. 143(3) and not section 144. Following the precedent of Akhil Bhartiya Prathamik Shikshak Sangha Bhavan Trust, the Tribunal held that completion of assessment under section 143(3) despite initial non-compliance implies good compliance, rendering the penalty under section 271(1)(b) unjustified. Therefore, the penalty was deleted.

The Tribunal, citing the precedent of Akhil Bhartiya Prathamik Shikshak Sangha Bhavan Trust vs ADIT, held that if assessments are completed under Section 153A r.w.s 143(3) and not under Section 144, it implies that any initial non-compliance was subsequently rectified and the assessment was treated as a regular assessment. Therefore, the levy of penalty under Section 271(1)(b) for non-compliance was not justified and was deleted.

The Tribunal held that penalties under Section 272A(1)(d) must be levied during assessment proceedings. As the Assessing Officer levied the penalties after completing the assessment orders, this implied condonation of non-compliance. The Tribunal also accepted the assessee's reasonable cause for non-compliance, citing his aged mother's illness.

The Income Tax Appellate Tribunal found merit in the assessee's submission and consequently allowed the appeal, setting aside the confirmed penalty.

The Tribunal noted that if there was actual non-compliance, assessments should have been completed under section 144. However, completion under section 153A read with section 143(3) indicates that subsequent compliance was accepted, thereby ignoring earlier defaults. Following precedence, the Tribunal deleted the penalties under section 271(1)(b) as not justified.

The Tribunal acknowledged that the CIT(A) had provided opportunities, but the assessee failed to comply. However, in the interest of justice and based on the AR's request for another chance, the Tribunal restored the matter to the Assessing Officer for readjudication, with a direction for the assessee to cooperate.

The Tribunal noted that while both lower authorities sought details, the assessee could not furnish them. Recognizing that the lack of effective opportunity violated principles of natural justice, the Tribunal restored the issues to the AO for readjudication. The AO was directed to grant adequate opportunities to the assessee, and the assessee was instructed to cooperate.

The Tribunal remanded the matter back to the Assessing Officer (AO) for re-examination and verification. The AO is directed to verify the Khata and Plot numbers of the acquired land and to re-measure its distance from the Puri Municipality limits as they existed on 6.1.1994, as per Notification dated 6.1.1994 and the Finance Act 2013. If the land is found to be beyond 2 kms from the municipal limits as on that specific date, the compensation will be treated as exempt agricultural income.

The Tribunal found that the CIT(E)'s order was non-speaking and noted the assessee's existing 12A registration, which implied satisfaction with their charitable activities. It also highlighted the casual approach of the CIT(E) in issuing a notice under an incorrect section (14A instead of 80G). Consequently, the tribunal restored the matter to the CIT(E) for fresh consideration of the 80G application, directing them to provide a proper opportunity of hearing and examine all submitted documents.

The Tribunal reversed the CIT(A)'s finding of delay, noting the appeal was within time. It held that the ex-parte assessment denied the assessee an opportunity to present evidence. The matter was restored to the AO for readjudication, allowing the assessee a proper hearing and instructing the AO to consider the Gujarat High Court's decision on the procedural nature of audit report filing.

The Tribunal found that the assessee was genuinely engaged in agricultural activities, supported by evidence such as photographs, video clips of the land, bank loan documents for agricultural purposes, and bills for fertilizer purchases. It noted the Ward Inspector's report, which partially confirmed the presence of standing paddy crops. Consequently, the Tribunal held that the agricultural income was genuine and deleted the addition made under section 68 for both assessment years.

The Tribunal dismissed the ground regarding lack of proper opportunity, finding that adequate opportunity was provided. It directed the AO to apply a profit rate of 4% (down from 5%) on the turnover of Rs.3,39,62,568/-, partially allowing this ground. The addition of Rs.6,77,500/- made under Section 69A for cash deposits during demonetization was deleted, as these deposits were considered to be from cash sales whose income was already estimated.

The Tribunal condoned the 144-day delay in filing the appeal after finding the assessee's explanation credible. Considering that the assessment was ex-parte and the assessee had no representation before the Assessing Officer, the Tribunal restored the matter to the AO's file. The AO is directed to conduct a de-novo assessment, providing the assessee a reasonable opportunity to produce all relevant evidence.

The Tribunal condoned the delay in filing the appeals. It found that the assessee genuinely carried out agricultural activities, supported by tangible evidence such as photographs, video, purchase bills for agricultural inputs (DAP, UREA, pesticides), and bank credit facilities. Noting that even the Inspector's report admitted isolated patches of paddy, the Tribunal concluded that the agricultural income declared was genuine and deleted the addition made under Section 68 for both assessment years.

The Tribunal observed the assessee's non-cooperation despite multiple opportunities from the AO and CIT(A). However, in the interest of justice, the Tribunal restored all issues to the CIT(A) for fresh adjudication on merit, granting the assessee liberty to submit all relevant documents. A cost of Rs.2000 per appeal was imposed on the assessee for non-cooperation, with non-payment leading to the appeals being treated as dismissed.

The Tribunal noted that the CIT(A) had provided multiple opportunities which the assessee failed to utilize, and the original assessment under section 147/144 was also due to non-compliance. However, in the interest of justice, all issues are restored to the file of the CIT(A) for fresh adjudication on merit, subject to the assessee paying a cost of Rs.2000/- per appeal for non-cooperation during prior proceedings. The assessee is granted liberty to produce all necessary documents.

The Tribunal acknowledged the assessee's repeated non-compliance before both the AO and CIT(A) despite multiple opportunities. However, in the interest of justice, the Tribunal restored all issues to the file of the CIT(A) for fresh adjudication on merit, granting the assessee another opportunity to present her case. A cost of Rs.2000/- per appeal was imposed on the assessee for non-cooperation, to be deposited within two months, with non-payment resulting in the appeals being dismissed.

The Tribunal observed that the CIT(A) erred by dismissing appeals without condoning delay or providing reasonable opportunity of hearing. It restored the quantum appeals to the file of the Assessing Officer for fresh adjudication, with a direction to provide the assessee a proper opportunity of hearing. The Tribunal noted that penalty orders were also confirmed without condoning delay, implying their re-examination would follow.

The Tribunal restored all quantum appeals to the Assessing Officer for fresh adjudication, finding that the assessee was not afforded a reasonable opportunity of hearing. For the penalty appeals, the Tribunal condoned the significant delays in filing, accepting the assessee's reasons as justifiable and not mala fide, and restored these matters to the AO/CIT(A) for re-adjudication. A cost of Rs. 2,000/- per appeal was levied on the assessee for non-cooperation during assessment and first appellate proceedings.

The Tribunal found that assessment and penalty orders were passed without affording reasonable opportunity of hearing. It condoned the delay in filing penalty appeals, emphasizing the principle of substantial justice. All quantum and penalty appeals were restored to the Assessing Officer for fresh adjudication with a direction to provide the assessee reasonable opportunity of hearing, subject to a cost of Rs. 2,000 per appeal for lack of cooperation during previous proceedings.

The Income Tax Appellate Tribunal (ITAT) noted that both quantum and penalty appeals were dismissed by the CIT(A) without condoning the significant delays and without providing reasonable opportunity of hearing. Recognizing the plausible reasons for delay cited by the assessee, the ITAT restored the issues in the quantum appeals to the file of the Assessing Officer (AO) for fresh adjudication after providing a reasonable opportunity of hearing. The penalty appeals were also implicitly covered by this decision.

The Tribunal restored all quantum appeals to the Assessing Officer for fresh adjudication, citing a lack of reasonable opportunity given to the assessee. For penalty appeals, the Tribunal condoned the delay in filing, finding the reasons (Director's illness, non-receipt of orders) justifiable and applying the principle of substantial justice, thus remanding these matters to the Assessing Officer for re-adjudication. However, a cost of Rs. 2,000/- per appeal was levied on the assessee for non-cooperation during the previous proceedings.

The Tribunal found that the CIT(A) erred by not condoning the delay and denying reasonable opportunity. Consequently, all quantum appeals were restored to the Assessing Officer for fresh adjudication, granting the assessee a new opportunity to present evidence, and implicitly the penalty appeals will follow.

The Tribunal condoned the delays in filing appeals, accepting the assessee's genuine reasons and citing the principle of substantial justice. It directed that all quantum and penalty appeals be restored to the Assessing Officer for fresh adjudication, ensuring the assessee receives a reasonable opportunity of hearing. A cost of Rs. 2,000 per appeal was imposed on the assessee for their previous lack of cooperation.

The Tribunal observed that the quantum appeals were dismissed without condoning delay or providing a reasonable opportunity of hearing. Consequently, the quantum appeals were restored to the Assessing Officer for fresh adjudication, with a direction to provide the assessee a proper opportunity to present evidence. The penalty orders, which were also confirmed by the CIT(A) without condoning delay, were partly allowed for statistical purposes, implying their re-evaluation based on the fresh quantum assessment.