ITAT Delhi Judgments — August 2024

The Tribunal noted that the required affidavit explaining the delay was not placed before the CIT(A). In the interest of justice, the Tribunal remitted all three appeals back to the CIT(A)/NFAC. The CIT(A) is directed to consider the assessee's affidavit, which the assessee is now required to file, and decide the issues afresh in accordance with the law.

The ITAT, noting the assessee's contention of non-receipt of notices and the CIT(A)'s failure to decide on merits, set aside the CIT(A)'s ex-parte order. The matter was restored to the CIT(A) for fresh adjudication on merits, ensuring a reasonable opportunity of being heard to the assessee.

The tribunal held that assessment orders passed against a non-existing company are not sustainable in the eyes of law, as they suffer from jurisdictional error. Relying on a Coordinate Bench's precedent, the tribunal declared the assessment orders void and quashed the entire assessment proceedings against the assessee.

The Tribunal held that management services should be considered in aggregate, and the TNMM method adopted by the assessee was appropriate. Regarding receivables, the Tribunal found that once working capital adjustments are made and profitability remains higher than comparables, no separate adjustment for imputed interest on delayed receivables is warranted.

The Tribunal observed that the CIT(Appeals) dismissed the appeal solely for non-prosecution and without considering its merits. Emphasizing the principles of natural justice, the Tribunal set aside the order of the CIT(Appeals) and remanded the case back for a fresh decision on merits after providing the assessee a fair opportunity of being heard.

The Tribunal acknowledged that the CIT(A) had provided several opportunities, which the assessee failed to utilize. However, considering the various additions and disallowances made by the AO, the Tribunal decided that the assessee should be granted one final opportunity to be heard. Consequently, the matter was restored to the Ld. CIT(A) for a fresh adjudication in accordance with the law.

The Tribunal set aside the orders of the lower authorities and restored the matter to the file of the Assessing Officer for a de novo assessment. The AO was directed to verify the veracity of the assessee's claim and afford a reasonable opportunity of being heard to the assessee.

The Tribunal set aside the CIT(A)'s order, holding that the appeal was dismissed without considering the merits and denying the assessee a reasonable opportunity of being heard. The matter was restored to the CIT(A) for a fresh decision after providing due opportunity.

The Tribunal found that the show cause notices and the PCIT's order invoking Section 12AB(4) were erroneous and bad in law. The Tribunal noted that Section 12AA could not be applied to orders after April 1, 2021, and Section 12AB(4) was not in effect for the assessment years in question.

The Tribunal noted that the AO could have verified the nature of the land himself. It set aside the lower authorities' orders, restoring the matter to the AO for fresh assessment to verify the assessee's claim and afford adequate opportunity of being heard, in the interest of natural justice.

The Tribunal held that the penalty could not be sustained because the charge for which satisfaction was recorded at the initiation of proceedings ("furnishing inaccurate particulars of income") was different from the charge on which the penalty was ultimately levied ("concealment of income"). Relying on Supreme Court and High Court precedents, the Tribunal emphasized that these are distinct offenses.

The Tribunal held that the penalty could not be sustained because the charge for which satisfaction was recorded at the initiation of proceedings ("furnishing inaccurate particulars of income") was different from the charge on which the penalty was ultimately levied ("concealment of income"). Relying on Supreme Court and High Court precedents, the Tribunal emphasized that these are distinct offenses.

The Tribunal found that the CIT(A) erroneously dismissed the appeal without considering the merits. To ensure natural justice, the Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A) for a fresh decision on merits after providing the assessee an adequate opportunity of being heard.

The Tribunal remanded the cases back to the CIT(Exemption) for fresh adjudication on merits, instructing them to pass speaking orders. The CIT(E) was directed to consider judgments from the Hon'ble Apex Court, including Ananda Social & Educational Trust and M/S New Noble Educational Society, to examine the objects of the societies.

The Tribunal remanded the cases back to the CIT(Exemption) for fresh adjudication on merits, instructing them to pass speaking orders. The CIT(E) was directed to consider judgments from the Hon'ble Apex Court, including Ananda Social & Educational Trust and M/S New Noble Educational Society, to examine the objects of the societies.

The Tribunal remanded the cases back to the CIT(Exemption) for fresh adjudication on merits, instructing them to pass speaking orders. The CIT(E) was directed to consider judgments from the Hon'ble Apex Court, including Ananda Social & Educational Trust and M/S New Noble Educational Society, to examine the objects of the societies.

The Tribunal remanded the cases back to the CIT(Exemption) for fresh adjudication on merits, instructing them to pass speaking orders. The CIT(E) was directed to consider judgments from the Hon'ble Apex Court, including Ananda Social & Educational Trust and M/S New Noble Educational Society, to examine the objects of the societies.

The Tribunal noted that the required affidavit explaining the delay was not placed before the CIT(A). In the interest of justice, the Tribunal remitted all three appeals back to the CIT(A)/NFAC. The CIT(A) is directed to consider the assessee's affidavit, which the assessee is now required to file, and decide the issues afresh in accordance with the law.

The Tribunal held that credit for TDS can only be granted in the assessment year in which the corresponding income is assessed to tax. The assessee was directed to approach the AO for claiming TDS credit in the concerned year.

The Tribunal allowed the appeal regarding the capital subsidy, holding that the lands were leased and not transferred, thus no addition was warranted. It also allowed the appeal concerning unpaid interest on deep discount bonds, stating Section 43B is not applicable. Other issues were remanded to the CIT(A) for adjudication.

The Tribunal held that the payments received by the assessee were for the use of copyrighted material (articles/databases) rather than for the use of the copyright itself, thus not constituting royalty. Furthermore, the Tribunal found no element of human intervention or provision of technical/managerial services, negating the classification as FIS.

The Tribunal found that the TPO disregarded prior ITAT and DRP directions by erroneously including non-AE revenue and costs in the transfer pricing adjustment, which violates Chapter X of the Income Tax Act. The Tribunal directed the AO/TPO to recompute the adjustment considering only transactions between the assessee and its Associated Enterprises (AEs) and to rectify the computation accordingly.

The Tribunal found that the Assessing Officer did not thoroughly investigate the matter or issue notices under Section 133(6) to the alleged loan providers, which is crucial for verifying identity, creditworthiness, and genuineness as per Supreme Court precedent. Consequently, the Tribunal set aside the impugned order and remanded the matter back to the Assessing Officer for a detailed fresh inquiry, ensuring proper notices are issued and the assessee is given an opportunity to be heard.

The Tribunal found significant procedural lapses highlighted by the assessee, particularly concerning notice issuance and the opportunity to present the case. To ensure justice, the matter was remitted back to the Assessing Officer for a fresh examination.

The Tribunal held that ad-hoc disallowance of expenses was improper as the assessee had not claimed any expenditure in the return. Regarding unsecured loans, the Tribunal found that the assessee had provided sufficient evidence and allowed the ground. For cash deposits, the Tribunal found sufficient cash in hand from share application money and bank withdrawals to cover the deposits, thus deleting the addition.

The Tribunal held that since the quantum proceedings resulted in the underlying addition being set aside for *de novo* adjudication, the substratum for the penalty under Section 271(1)(c) has eroded. Therefore, the penalty levied does not survive, and the impugned order upholding the penalty was set aside.

The Tribunal held that the carriage fees paid by the assessee were for the use of services for a particular period on an annual and renewal basis. Therefore, the assessee did not derive any enduring benefit, and the expenditure was correctly treated as revenue.

The Tribunal found the assessee's plea of non-appearance for later notices (2023) due to Covid-19 unsustainable and attributed it to negligence. However, considering the assessment was framed ex-parte u/s 144 and the assessee's potential to explain the source of funds, the Tribunal restored the matter to the AO for a de novo assessment, granting a reasonable opportunity to the assessee. The assessee was also directed to pay costs of Rs. 5,000/- for non-compliance.

The Tribunal condoned the delay in filing the appeals, citing reasonable cause due to the professional's oversight. It further held that the disallowance of interest was unjustified as the advances were made from the assessee's own funds and not from borrowed money, supported by financial statements and judicial precedents.

The Tribunal, relying on a Delhi High Court judgment, held that the final assessment order dated 27.12.2021 was time-barred. As per Section 144C(13), the AO is mandated to complete the assessment within one month from the end of the month in which DRP directions are received. Since DRP directions were issued on 04.10.2021, the assessment should have been completed by 30.11.2021, making the 27.12.2021 order beyond the statutory timeline.

The Tribunal held that the assessment proceedings were invalid because the AO of the searched person did not record satisfaction before handing over documents, and the seized material did not pertain to the assessment years in question. The Tribunal quashed the assessment on these legal grounds.

The Tribunal affirmed the CIT(A)'s decision, holding that China Development Bank (CDB) is and has always been a financial institution wholly owned by the Government of China. This determination is based on both the erstwhile and amended Article 11(3) of the India-China DTAA, and explicitly confirmed by the Protocol to the DTAA, which specifically lists CDB as such an institution.

The Income Tax Appellate Tribunal noted that the Revenue did not dispute the nature of the compensation. Consequently, the ITAT set aside the CIT(A)'s orders, restoring the appeals to the CIT(A) to decide the issues on merits after providing the assessee an adequate opportunity of being heard.

The Tribunal condoned the delay in filing the appeal due to the assessee's illness. It held that the AO and CIT(Appeals) failed to make proper inquiry and did not provide adequate opportunity to the assessee to prove the source of the renovation funds. Therefore, the Tribunal set aside the orders of the lower authorities and remanded the matter back to the AO for a de novo assessment, requiring verification of the assessee's claim after affording reasonable opportunity.

The Income Tax Appellate Tribunal (ITAT) found that the CIT(A) violated principles of natural justice by passing ex-parte orders and relying on ex-parte material without confronting the assessee. With the consent of both parties, the ITAT restored all three appeals to the CIT(A) for fresh adjudication, directing the CIT(A) to provide adequate opportunity of being heard and to confront the assessee with all information and enquiries conducted.

The Tribunal held that the carriage fees paid by the assessee were for the use of services for a particular period on an annual and renewal basis. Therefore, the assessee did not derive any enduring benefit, and the expenditure was correctly treated as revenue.

The Tribunal held that the assessment proceedings were invalid because the AO of the searched person did not record satisfaction before handing over documents, and the seized material did not pertain to the assessment years in question. The Tribunal quashed the assessment on these legal grounds.

The Tribunal condoned the 169-day delay, finding it reasonably explained, and admitted the appeal. It clarified that notices on the ITBA portal are insufficient and must be communicated to the assessee. Consequently, the Tribunal restored the matter to the CIT(E), directing a re-examination of the issues, verification of original documents, and a decision on regular registration under Section 12A(1) after affording the assessee a proper hearing and regularizing the provisional certificate.

The Tribunal held that the reasons recorded for reopening the assessment were vague and lacked the necessary application of mind, making the reassessment proceedings invalid. Consequently, the reassessment orders for both assessment years were quashed.

The Tribunal allowed the appeal regarding the capital subsidy, holding that the lands were leased and not transferred, thus no addition was warranted. It also allowed the appeal concerning unpaid interest on deep discount bonds, stating Section 43B is not applicable. Other issues were remanded to the CIT(A) for adjudication.

The Tribunal allowed the appeal regarding the capital subsidy, holding that the lands were leased and not transferred, thus no addition was warranted. It also allowed the appeal concerning unpaid interest on deep discount bonds, stating Section 43B is not applicable. Other issues were remanded to the CIT(A) for adjudication.

The Tribunal condoned the delay in filing the appeals, citing reasonable cause due to the professional's oversight. It further held that the disallowance of interest was unjustified as the advances were made from the assessee's own funds and not from borrowed money, supported by financial statements and judicial precedents.

The Tribunal held that the carriage fees paid by the assessee were for the use of services for a particular period on an annual and renewal basis. Therefore, the assessee did not derive any enduring benefit, and the expenditure was correctly treated as revenue.

The Income Tax Appellate Tribunal noted that the Revenue did not dispute the nature of the compensation. Consequently, the ITAT set aside the CIT(A)'s orders, restoring the appeals to the CIT(A) to decide the issues on merits after providing the assessee an adequate opportunity of being heard.

The Tribunal held that the carriage fees paid by the assessee were for the use of services for a particular period on an annual and renewal basis. Therefore, the assessee did not derive any enduring benefit, and the expenditure was correctly treated as revenue.

The Tribunal held that the payments received by the assessee were for the use of copyrighted material (articles/databases) rather than for the use of the copyright itself, thus not constituting royalty. Furthermore, the Tribunal found no element of human intervention or provision of technical/managerial services, negating the classification as FIS.

The Income Tax Appellate Tribunal (ITAT) found that the CIT(A) violated principles of natural justice by passing ex-parte orders and relying on ex-parte material without confronting the assessee. With the consent of both parties, the ITAT restored all three appeals to the CIT(A) for fresh adjudication, directing the CIT(A) to provide adequate opportunity of being heard and to confront the assessee with all information and enquiries conducted.

The Tribunal found significant procedural lapses highlighted by the assessee, particularly concerning notice issuance and the opportunity to present the case. To ensure justice, the matter was remitted back to the Assessing Officer for a fresh examination.

The Tribunal held that the receipts from Indian customers for access to online journals and books do not constitute royalty as the assessee is providing access to copyrighted articles, not the copyright itself. It was also held that these receipts do not qualify as FTS as there was no human intervention and the services did not 'make available' technical knowledge.

The Tribunal found significant procedural lapses highlighted by the assessee, particularly concerning notice issuance and the opportunity to present the case. To ensure justice, the matter was remitted back to the Assessing Officer for a fresh examination.