ITAT Delhi Judgments — October 2024

To prevent a miscarriage of justice, the Tribunal granted the assessee another opportunity to explain the significant delay in filing the appeal before the CIT(A). The matter was remitted back to the CIT(A) to reconsider the condonation of delay and pass a reasoned order strictly in accordance with law.

The Tribunal held that corpus donations are capital receipts and not income, thus not to be added to the total income. It further ruled that the requirement to furnish Form 10B is procedural and directory, and its belated filing with a pending condonation application constitutes substantial compliance, hence the benefit of exemption under Section 11(1)(d) cannot be denied.

The ITAT held that the land sold was rural agricultural land as per Section 2(14) of the Income Tax Act, and therefore not a capital asset, thus no capital gains tax could be levied. The addition related to the land sale was consequently deleted. For the fisheries income, the ITAT restricted the addition to 20% of Rs. 7,78,000/-, as agreed by the appellant.

The Tribunal, relying on precedents from the Supreme Court and High Courts, held that a penalty notice under Section 271(1)(c) must specifically state the ground for which penalty proceedings are initiated. Since the Assessing Officer's notice was vague and failed to mention a specific limb of the section, the initiation of penalty proceedings was deemed non-maintainable, invalid, and void ab-initio.

The Tribunal held that payments made by HCLT to its non-resident group entities for onshore work performed outside India are not taxable in India. This was based on the reasoning that the services were rendered to overseas customers and utilized outside India, falling under the exclusion in Section 9(1)(vii)(b) of the Act.

The Tribunal, relying on various High Court and Supreme Court judgments, held that a penalty notice under Section 271(1)(c) must specifically indicate whether the penalty is for concealment of income or for furnishing inaccurate particulars. Since the notice dated 23.03.2022 failed to specify a definite limb, it was deemed non-maintainable, invalid, void, and ab-initio quashed. Consequently, the penalty proceedings initiated against the assessee were quashed.

The Tribunal observed that the quantum proceedings, forming the basis of the penalty, had not reached finality and were pending before the CIT(A). Therefore, the Tribunal restored the penalty appeal to the CIT(A) for fresh adjudication, instructing them to consider the outcome of the quantum appeal.

The Tribunal observed that the loan was received and repaid within a short period of 10 days through banking channels, a fact unrebutted by the Revenue. It clarified that for AY 2010-11, the assessee was not required to prove 'source of source' for the lender's creditworthiness, as the amendment to Section 68 came into effect later. Therefore, the Tribunal found no grounds for the addition under Section 68 of the Act.

The Tribunal held that payments made by HCLT to its non-resident group entities for onshore work performed outside India are not taxable in India. This was based on the reasoning that the services were rendered to overseas customers and utilized outside India, falling under the exclusion in Section 9(1)(vii)(b) of the Act.

The Tribunal accepted the request for withdrawal as the Learned Senior DR had no objection. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal noted the principle that expenditure cannot be disallowed if it has not been claimed by the assessee. Agreeing with the assessee's contention, the Tribunal decided to restore the entire issue back to the Ld.CIT(A) to provide the assessee with a proper opportunity to submit documentary evidence to justify its claim against the contingent liability adjustment.

To uphold the principle of fair play and prevent a miscarriage of justice, the Tribunal remitted the case back to the CIT(A) for fresh consideration. The assessee is to be granted a further opportunity to be heard and present evidence, with the stipulation that non-cooperation would allow the CIT(A) to proceed strictly according to law.

The Tribunal dismissed the Revenue's appeal, holding that the tax effect was below the monetary limit stipulated by CBDT Circulars 09/2024 and 05/2024. The Tribunal clarified that the exception clause (Para 3.1.i) relied upon by the Revenue for appeal maintainability was applicable only to orders under sections 201(1)/201(1A) and not to disallowances under section 40a(ia). The Assessee's cross-objection was also dismissed as infructuous.

The Tribunal found that the notice dated 10.03.2015 under Section 148 of the Act was issued to a different assessee, not the appellant. It was established that no valid notice under Section 148 was ever issued and served upon the assessee before the tribunal, thereby vitiating the reassessment proceedings. Consequently, the reassessment was quashed.

The Tribunal observed the significant time gap between the last notice and the ex-parte order, and the ongoing proceedings before the Delhi High Court. Upholding principles of objectivity, fairness, and justice, the Tribunal decided to restore the entire matter to the file of the CIT(A) for fresh adjudication, ensuring the assessee receives a proper opportunity to present its case.

The Tribunal condoned the delay in filing the appeal, finding the medical reason genuine. It admitted the additional legal ground regarding the non-service of the Section 148 notice. As the notice was admittedly not served, the Tribunal held that the initiation of assessment proceedings lacked basis, and consequently, the assessment order was declared void ab initio and quashed.

The Tribunal held that the approval granted under Section 153D was invalid as it lacked independent application of mind by the approving authority. The identical language and format used in approvals for different assessees and assessment years indicated a mechanical process, not a judicious review of the draft assessment orders.

The Tribunal held that the assessee failed to discharge its onus under Section 68 to prove the identity, genuineness, and creditworthiness of the subscribers. The AO's detailed inquiries, including field investigations, revealed that some investor companies were non-existent or lacked the financial capacity for such investments.

The Tribunal considered the assessee's claim of income from private tuitions, her past savings, and the cash received from her father. It concluded that, given these facts and the perceived smallness of the amount, the addition made by the lower authorities was not justified. Consequently, the addition was deleted, and the assessee's appeal was allowed, though the order is not to be treated as a precedent.

The Tribunal held that payments made by HCLT to its non-resident group entities for onshore work performed outside India are not taxable in India. This was based on the reasoning that the services were rendered to overseas customers and utilized outside India, falling under the exclusion in Section 9(1)(vii)(b) of the Act.

To ensure fair play and prevent miscarriage of justice, the Tribunal remitted the issue back to the CIT(A) for fresh consideration. The CIT(A) is directed to grant the assessee a fresh opportunity of being heard and to consider any evidence presented. The CIT(A) is also at liberty to pass orders as per law if the assessee fails to cooperate.

The Tribunal held that the assessee had duly explained the source of the cash deposits, finding that they originated from prior bank withdrawals and genuine savings from an erstwhile business of train tickets. Consequently, the addition made by the CIT(A) was not justified and was deleted.

The Tribunal observed that the assessee was denied a proper opportunity of being heard, violating principles of fair play. Consequently, the matter was set aside to the Assessing Officer for fresh consideration on merits, with a clear direction to provide the assessee a full opportunity to be heard and present all relevant material and evidence.

To ensure that justice is served and to prevent a miscarriage of justice, the Tribunal decided to remand the case back to the Assessing Officer. This allows the assessee a fresh opportunity to be heard and present evidence, enabling the matter to be decided on its merits.

The tribunal held that the approval granted by the superior authority under Section 153D was 'non-est' (non-existent in law) due to a clear non-application of mind, relying on an identical dispute in the case of 'Mysore Bhaskara Pankaja'. The mechanical nature of the combined approval, granted hastily for numerous cases and assessment years, indicated a failure to objectively evaluate the proposed assessment orders. Consequently, the assessment orders passed based on such an invalid approval were quashed, and the tribunal stated that the additions/disallowances did not require adjudication on merits.

The Tribunal ruled that the sanction for initiating reassessment proceedings under Section 148 beyond four years, as required by Section 151(1) of the Income Tax Act, was mistakenly provided by the Additional CIT instead of the Principal CIT or Chief Commissioner. This rendered the Assessing Officer's assumption of jurisdiction invalid and the Section 148 notice bad in law. Consequently, the assessment order was quashed.

The Tribunal found that with the closure of LO operations and absence of expatriate employees, the assessee ceased to have a PE or DAPE in India for the impugned assessment years, thus disallowing profit attribution to a PE. Following a Supreme Court precedent, the Tribunal also directed the deletion of additions treating software receipts as 'Royalty', confirming such receipts do not constitute royalty for copyright usage. However, the appeals against the levy of interest under sections 234A and 234B and the initiation of penalty proceedings under section 270A(9)(a) were dismissed as consequential or premature.

The Tribunal held that the employer's affidavit and supporting documents, explaining the source of the credit card payments as reimbursements for business-related expenses, appeared genuine. Finding no contrary evidence from the revenue, the Tribunal concluded that the addition made under Section 69 was not sustainable and ordered its deletion.

The Tribunal held that uploading an order on the ITBA portal is not sufficient notice to the assessee. Therefore, the interest of justice requires remitting the case back to the AO for a fresh decision with an adequate opportunity for the assessee.

The Tribunal found the assessee's explanation regarding their CA's illness and death to be genuine and accepted it. It quashed the ex-parte order of the CIT(A) and remanded the matter back to the CIT(A) for fresh adjudication, directing that the assessee be given a proper opportunity of hearing and to present evidence.

The Tribunal found that with the closure of LO operations and absence of expatriate employees, the assessee ceased to have a PE or DAPE in India for the impugned assessment years, thus disallowing profit attribution to a PE. Following a Supreme Court precedent, the Tribunal also directed the deletion of additions treating software receipts as 'Royalty', confirming such receipts do not constitute royalty for copyright usage. However, the appeals against the levy of interest under sections 234A and 234B and the initiation of penalty proceedings under section 270A(9)(a) were dismissed as consequential or premature.

The tribunal held that the approval granted by the superior authority under Section 153D was 'non-est' (non-existent in law) due to a clear non-application of mind, relying on an identical dispute in the case of 'Mysore Bhaskara Pankaja'. The mechanical nature of the combined approval, granted hastily for numerous cases and assessment years, indicated a failure to objectively evaluate the proposed assessment orders. Consequently, the assessment orders passed based on such an invalid approval were quashed, and the tribunal stated that the additions/disallowances did not require adjudication on merits.

To prevent a miscarriage of justice and ensure a decision on merits, the Tribunal remanded the case back to the Assessing Officer. The AO is directed to provide the assessee a fresh opportunity of being heard and to consider any evidence presented, allowing the appeal for statistical purposes.

The Income Tax Appellate Tribunal (ITAT) observed that the assessee was not given adequate opportunity by the AO, and the DR did not object to this contention. In the interest of justice, the ITAT remitted the issues back to the AO with directions to provide the assessee with an adequate opportunity of being heard and decide the matter afresh.

The Tribunal held that the CIT(A) exceeded his powers of enhancement by introducing a new source of income. It also found that the assessee trust had applied sufficient income for charitable objects, satisfying the conditions for exemption under Section 11.

The Tribunal held that the CIT(A) exceeded his powers of enhancement by introducing a new source of income. It also found that the assessee trust had applied sufficient income for charitable objects, satisfying the conditions for exemption under Section 11.

The Tribunal observed that the assessee was not given adequate opportunity before the AO and expired during the CIT(A) proceedings. With no objection from the DR, the Tribunal remitted the entire matter back to the AO. The AO was directed to decide the issues afresh after providing a proper opportunity of hearing to the assessee's legal heir.

The Tribunal found that with the closure of LO operations and absence of expatriate employees, the assessee ceased to have a PE or DAPE in India for the impugned assessment years, thus disallowing profit attribution to a PE. Following a Supreme Court precedent, the Tribunal also directed the deletion of additions treating software receipts as 'Royalty', confirming such receipts do not constitute royalty for copyright usage. However, the appeals against the levy of interest under sections 234A and 234B and the initiation of penalty proceedings under section 270A(9)(a) were dismissed as consequential or premature.

The Tribunal found that with the closure of LO operations and absence of expatriate employees, the assessee ceased to have a PE or DAPE in India for the impugned assessment years, thus disallowing profit attribution to a PE. Following a Supreme Court precedent, the Tribunal also directed the deletion of additions treating software receipts as 'Royalty', confirming such receipts do not constitute royalty for copyright usage. However, the appeals against the levy of interest under sections 234A and 234B and the initiation of penalty proceedings under section 270A(9)(a) were dismissed as consequential or premature.

The Tribunal held that the penalty notice issued under Section 271(1)(c) was invalid and non-maintainable because it did not clearly specify the exact limb (concealment of income or furnishing inaccurate particulars) under which the penalty proceedings were initiated. Citing Supreme Court and High Court precedents, the Tribunal concluded that such proceedings were void ab-initio and accordingly quashed the penalty.

The tribunal held that the approval granted by the superior authority under Section 153D was 'non-est' (non-existent in law) due to a clear non-application of mind, relying on an identical dispute in the case of 'Mysore Bhaskara Pankaja'. The mechanical nature of the combined approval, granted hastily for numerous cases and assessment years, indicated a failure to objectively evaluate the proposed assessment orders. Consequently, the assessment orders passed based on such an invalid approval were quashed, and the tribunal stated that the additions/disallowances did not require adjudication on merits.

The Tribunal held that the assessee had provided sufficient documentary evidence to establish the identity, creditworthiness, and genuineness of the share capital transactions. The Assessing Officer had not brought any adverse material on record to controvert the assessee's explanation.

The Tribunal upheld the rectification made by the AO and confirmed by the CIT(A), concluding that the correction of the addition amount from Rs. 1,14,95,000/- to Rs. 1,99,90,500/- was an apparent mistake from the record, rectifiable under section 154 of the Act. The Tribunal found no infirmity in the orders of the lower authorities, thereby dismissing the assessee's appeal.

The Income Tax Appellate Tribunal (ITAT) referred to several of its own binding precedents, including *Ratna Sagar Pvt. Ltd.* and *Interglobe Technology Quotient Private Limited*. It held that disallowance of CSR expenditure under Section 37(1) does not bar a deduction under Section 80G. The Tribunal affirmed that CSR expenditure, although an application of income and not a business expense, qualifies for 80G deduction if all other conditions of that section are met, and the mandatory nature of CSR under the Companies Act does not negate the voluntary nature of a donation for 80G purposes.

The Tribunal held that CCL International Ltd. cannot be categorized as a penny stock company, given its substantial business and turnover. Therefore, the denial of exemption under Section 10(38) and the addition for unexplained expenditure were unjustified.

The Tribunal held that the PCIT lacked jurisdiction to revise the Transfer Pricing Officer's order as it was passed before the relevant amendment to Section 263. Furthermore, the Tribunal found that the PCIT's actions regarding discontinued business and share-based compensation were also unwarranted as these issues were either not relevant to the assessment year or already addressed.