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1,215 orders · Page 12 of 25
The Tribunal held that Sections 144C and 153 of the Income Tax Act are mutually inclusive, and the time limits for passing final assessment orders must be adhered to. It found that the final assessment orders for the years in question were indeed passed beyond the statutory period of limitation.
The Tribunal held that the impugned Final Assessment Order dated 26/09/2024, pertaining to Assessment Year 2021-22, is barred by limitation as per Section 153 read with Section 144C of the Act. The Tribunal, by respectfully following the binding precedents of the Madras High Court in Roca Bathroom Products (P.) Ltd. and numerous orders of the Co-ordinate Bench of the Hyderabad Tribunal, decided the issue of limitation in favour of the assessee. The Tribunal quashed the impugned Final Assessment Order. Recognizing that the issue of limitation is pending before the Supreme Court in the case of Shelf Drilling Ron Tappmeyer Ltd., the Tribunal granted liberty to the parties to revive the appeal for adjudication of other issues on merits if the Supreme Court's decision necessitates a modification of this order. Other issues raised by the assessee on merits were kept open, subject to the outcome of the Supreme Court's judgment.
The tax effect in both appeals was noted to be below the threshold limit of Rs. 60 lacs prescribed by the CBDT Circular. Therefore, the appeals were dismissed on the grounds of low tax effect.
The Tribunal held that Section 144C prescribes a complete statutory cycle for assessment, including time limits for various stages. It concluded that the general limitation period under Section 153 is not applicable to the final assessment order passed under Section 144C(13), as Section 144C is a special provision intended to provide an alternate dispute resolution mechanism.
The appeal filed by the Revenue was dismissed. The Tribunal condoned the delay of 99 days in filing the appeal by the assessee, noting bonafide reasons. The matter was restored to the AO for fresh consideration, directing the assessee to make requisite compliance.
The Tribunal held that the reopening initiated by the ITO was not sustainable in law. This was because the assessee, being a corporate entity declaring income of Rs. 30 lakh or more, should have been assessed by a Deputy or Assistant Commissioner as per CBDT Circular No. 1/2011.
The Tribunal, after hearing both parties and perusing the record, decided to restore the matter to the AO for a fresh assessment. The assessee was to be given a reasonable opportunity to be heard and directed to comply with the AO's requirements.
The Tribunal acknowledged that the assessee is engaged in the construction business, where some cash turnover cannot be ruled out, and importantly, their corresponding sales have not been questioned. The Tribunal noted the existence of divergent judicial views on the issue of bogus purchases, citing several recent precedents from various High Courts and the ITAT. Faced with these facts and the divergent legal opinions, the Tribunal deemed it appropriate in the larger interest of justice to allow a lump sum disallowance at 8% of the total alleged bogus purchases, which amounted to Rs. 63,84,000/-. This decision is to be without prejudice to it being treated as a precedent. Necessary computations are to be made as per law. No other grounds were pressed.
The Tribunal held that the CIT(A)/NFAC erred in refusing to condone the delay in filing the assessee's appeal. Citing the Supreme Court's decision in Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC), the Tribunal emphasized that technical aspects should yield to the cause of substantial justice. The Tribunal restored the assessee's appeal back to the CIT(A)/NFAC for fresh adjudication. The CIT(A)/NFAC was directed to consider the appeal within three effective opportunities, with the rider that the taxpayer would plead and prove their case at their own risk and responsibility in the consequential proceedings. The issue of the merits of the assessment was not decided by the Tribunal.
The Tribunal condoned the delay of 8 days, accepting the bonafide reasons provided. However, since the tax effect in both appeals was below the CBDT prescribed limit of Rs. 60 lacs, the appeals were dismissed.
The Tribunal held that Section 144C provides a complete statutory cycle for assessments involving eligible assessees, and its time limits are not superseded by Section 153. The assessment orders were found to be validly passed within the framework of Section 144C.
The Tribunal noted that the CIT(A)/NFAC's discussion had proceeded ex-parte and did not find any substantive lower appellate adjudication. It was acknowledged that communication gaps might have occurred due to the faceless hearing system.
The Tribunal found no reason to sustain the addition. It was held that the assessee had provided all relevant details for the dividend income and there was no proven nexus of irregularity between the assessee and the payer group that would warrant the addition under section 68.
The Tribunal held that Section 144C prescribes a complete statutory cycle for assessment, and its provisions for time limits operate independently of Section 153. The time consumed in the DRP process under Section 144C is not to be counted against the Assessing Officer for the purpose of Section 153.
The Tribunal held that the income declared by the assessee should be considered as income from business or profession. It respectfully followed the judgments of the Hon'ble Supreme Court in Sultan Brothers (P.) Ltd., Rayala Corporation (P.) Ltd., and PCIT vs. M.P. Entertainment and Developers (P.) Ltd. These judgments clarified that merely an entry in the object clause is not determinative; the circumstances of each case must be examined to ascertain if letting is a business. The Tribunal noted that the assessee not only leased premises but also provided essential amenities and facilities, making the space operational. Furthermore, for several past assessment years, the income was accepted as business income, supporting the principle of consistency as laid down in Radhasoami Satsang vs. CIT. Consequently, the Tribunal dismissed all grounds of the Revenue and confirmed the CIT(A)'s order, holding the income as business income. The issue regarding admission of additional evidence was not explicitly decided but the primary issue of income classification was ruled in favour of the assessee.
The Tribunal acknowledged that valuation exercises can be subjective. While upholding the addition, the Tribunal granted a lumpsum relief of Rs. 5 lakhs to the assessee to meet the ends of justice, with the rider that it should not be treated as a precedent.
The Tribunal held that the income derived from letting out properties, especially in the context of developing and operating an IT park with allied facilities, constitutes business income. This was supported by various High Court and Supreme Court judgments.
The Tribunal held that Section 144C prescribes a complete statutory cycle for eligible assessees, including a special regime for time limits from the draft order to the final assessment. This special regime is intended to operate notwithstanding the general limitation periods in Section 153, ensuring the mechanism is workable and achieves its objective of expeditious dispute resolution.
The Tribunal held that the assessee's activities, including providing various services to occupants and engaging a large workforce, constituted a systematic and organized business activity. Therefore, the income derived from the IT park should be treated as business income, not rental income.
The Tribunal observed that the AO relied on a retracted statement and WhatsApp messages, which lacked evidentiary value. The Tribunal found that the addition was based on surmises, conjectures, and unreliable data without corroborating evidence. Consequently, the Tribunal restored the matter to the AO for de novo assessment.
The Tribunal noted that the approval for reopening by the prescribed authority was mechanical, stating "Yes, I am satisfied………………………". Citing the Supreme Court decision in CIT vs. S. Goyanka Lime and Chemical Ltd., the Tribunal held that such a mechanical approval vitiates the entire reopening.
The Tribunal referred to previous High Court and Tribunal rulings that employees of nationalized banks are not considered government employees for the purpose of Section 10(10AA) exemption. However, a recent revision by the CBDT increased the exemption limit to Rs. 25,00,000/-.
The Tribunal noted that the Central Board of Direct Taxes (CBDT) had suo motu revised the limit for deduction under Section 10(10AA) to Rs. 25,00,000/-. Since the assessee's claim of Rs. 6,97,100/- was below this revised limit, the Tribunal held that the assessee was eligible for the full deduction. The Tribunal relied on recent developments and notifications in this regard.
The Tribunal held that there was no justification for disallowing interest paid to banks without establishing that the amount advanced to M/s Jainsons Exports was out of borrowed funds. Previous disallowances had already been made for non-business use.
The Tribunal noted that the assessee had explained the reasons for the delay due to circumstances beyond their control. Citing the case of Collector, Land & Acquisition vs. Mst. Katiji & Others, the Tribunal held that technicalities should not obstruct substantial justice.
The Tribunal acknowledged the possibility of communication gaps, especially with the virtual hearing mechanism, and deemed it appropriate to restore the appeal to the CIT(A)/NFAC for fresh adjudication. The Tribunal also directed that the assessee be assessed under normal provisions concerning Section 115BBE, citing a previous ruling.
The Tribunal noted that the assessee's signature was absent from the relevant agreement. The department's contention was that the assessee's husband signed on her behalf. The Tribunal found no merit in the addition as the department failed to prove the cash payment.
The Tribunal acknowledged the possibility of cash in hand for the assessee and family members. It deemed a lumpsum addition of Rs. 2 lakhs to be appropriate in the given facts, with the condition that it not be treated as a precedent, and directed assessment under normal provisions for section 115BBE.
The Tribunal acknowledged the possibility of communication gaps due to the new faceless hearing system and decided that restoring the appeal to the CIT(A)/NFAC for fresh adjudication was appropriate.
The Tribunal noted that while the assessee provided details, the lower authorities did not concur. In this peculiar backdrop, it was deemed appropriate to adopt a lumpsum Gross Profit (GP) estimation at 8% or the declared GP, whichever is higher, with the rider that this shall not be treated as precedent. The assessee is to be assessed under normal provisions as per law.
The Tribunal noted that the issue of limitation regarding reopening notices issued under Section 148 on or after April 1, 2021, for AY 2015-16, had been settled by the Supreme Court and various High Courts. Relying on these decisions, the Tribunal held that such notices are barred by limitation and consequently the reassessment orders are bad in law.
The Tribunal held that the non-maintenance of an item-wise stock register alone is not sufficient cause to reject books of accounts under Section 145(3), especially when the assessee deals with a large variety of items and physically verifies stock. The Tribunal also found that the cash deposits during demonetization were not a new phenomenon for the assessee and were supported by past and subsequent cash deposit patterns, as well as judicial precedents.
The Tribunal noted that the assessee's cash deposits could prima facie represent cash sales turnover. Considering the facts and in the larger interest of justice, a lumpsum addition of Rs. 2 lakhs was deemed appropriate, with the rider that it should not be treated as a precedent. Regarding assessment under section 115BBE, the Tribunal noted that the provision is effective from 01.04.2017, and thus the assessee should be assessed under normal provisions.
The Tribunal held that the notice for reassessment was invalid because it was issued beyond the prescribed time limit without obtaining approval from the specified authority under Section 151 of the Income Tax Act. Consequently, the subsequent assessment order was also quashed.
The Tribunal, considering the divergent views of various judicial precedents and in the interest of justice, decided that a further minimal disallowance would be appropriate. Legal expenses disallowed by the CIT(A) were also addressed, with no further disallowance deemed necessary once the assessee's net profit was estimated.
The Assessing Officer initiated proceedings under section 148/147 regarding cash sales, but the assessment framed did not include any addition based on this reason. The Tribunal cited precedents to quash the reopening.
The Tribunal observed that the assessee had previously withdrawn a total of Rs. 43.94 lakhs and Rs. 17 lakhs from its bank accounts, an amount significantly higher than the Rs. 26 lakhs deposited. This led to a presumption that the cash deposited was merely a re-deposit of earlier withdrawals, thus not unexplained. Consequently, the addition made by the lower authorities was deleted.
The Tribunal held that the assessment under Section 153C was invalid if the satisfaction for forwarding the seized material was recorded after the search date and prior to the assessment year. This rendered the Section 143(3) assessment, framed on a later date, as non-est.
The Tribunal held that the assessment under Section 153C was invalid if the satisfaction for forwarding the seized material was recorded after the search date and prior to the assessment year. This rendered the Section 143(3) assessment, framed on a later date, as non-est.
The Tribunal condoned the delay in filing the appeal as the reasons provided by the assessee were considered genuine. The Tribunal also noted that the assessee sought to submit additional evidence and requested the matter be set aside for fresh adjudication. In the interest of justice, the matter was restored to the CIT(A) for fresh adjudication on merits, providing the assessee with a reasonable opportunity.
The Tribunal held that the Assessing Officer made additions/disallowances of creditors/liabilities based on the view that parties had not confirmed the transactions. Before the CIT(A), the assessee filed detailed written submissions along with ledger accounts and bank statements. The Tribunal found that these details were not verified by the lower authorities. Therefore, the issue of disallowance of creditors' liability was restored back to the jurisdictional assessing officer to verify the facts and allow appropriate relief in accordance with law. Grounds 1 and 2 of the appeal were allowed for statistical purposes. Regarding the ad hoc disallowance of freight expenses, the Tribunal noted that the assessee had not provided details except for submissions that no cogent reason was given by the AO. In the absence of any details or evidence, the Tribunal considered the ad hoc disallowance of 10% of total freight expenses to be reasonable. Accordingly, ground no. 3 of the appeal was dismissed. The appeal was partly allowed.
The Tribunal held that the assessment order was unsustainable in law because it was framed against a company that was struck off and thus a non-existent entity. There was no material to show that the assessee was ever served with any reopening notice.
The Tribunal noted that the possibility of communication gaps in the newly introduced virtual hearing mechanism could not be ruled out. It was also observed that there was no effective compliance with Section 250(6) of the Act regarding points of determination in the appellate order.
The Tribunal held that a notice issued to a dissolved or non-existent entity is void ab initio, as established by Supreme Court decisions. The AO's knowledge of the dissolution further supported this point. Therefore, the reassessment proceedings initiated by the notice were null and void.
The tribunal noted that the approval for reopening was mechanical and lacking specific satisfaction from the prescribed authority. Citing a Supreme Court judgment, it was held that such mechanical approval vitiates the entire reopening process. Therefore, the reopening was quashed.
The Tribunal held that the cash received from the sale of agricultural lands was deposited in the bank account. Therefore, the addition of Rs.25.41 lakhs as income from undisclosed sources was not justified.
The Tribunal held that Section 144C prescribes a complete statutory cycle for eligible assessees, and its time limits are not superseded by the general limitation period in Section 153. The assessment orders were not barred by limitation.
The Tribunal held that Section 144C provides a complete statutory cycle for assessments involving eligible assessees, and its time limits are to be considered independently of Section 153. The special regime under Section 144C governs the period from the draft order to the final assessment order, ensuring an expeditious dispute resolution mechanism.
The Tribunal acknowledged that sourcing from unregistered dealers was possible and the assessee's sales were not questioned. Considering the divergent views in various precedents on bogus purchases, a lumpsum disallowance of 6% of the alleged bogus purchases was deemed appropriate.