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The Tribunal held that the Commissioner of Income Tax (Exemption) should have verified the facts regarding the interest-bearing advances made to members/office bearers, specifically their recoverability and the expected repayment within FY 2026-27. Furthermore, the CIT(E) should have examined the objects of the trust to determine if they are charitable in nature. The Tribunal found that the CIT(E) rejected the application solely on the ground of the advances without adequate verification and without considering the charitable nature of the trust's aims. Therefore, in the interest of justice, the matter was remitted back to the CIT(E) for fresh adjudication. The assessee was directed to furnish complete details and cooperate with the proceedings. The Tribunal noted that no adverse findings were given by the CIT(E) regarding the objects of the trust. The appeal was allowed for statistical purposes.
The Tribunal held that the reassessment proceedings initiated under section 148 were bad in law and vitiated the entire reassessment process. The Tribunal noted that the case was re-opened after a period of three years from the end of the relevant assessment year. While the satisfaction recorded in the order passed under section 148A(d) was for an escapement of income of INR 12,10,77,622/-, the addition made in the final assessment order under section 148 was INR 24,21,552/-, which was arrived at by applying a 2% commission rate. This addition was less than the threshold limit of INR 50.00 Lakhs prescribed under section 149(1)(b) of the Act for reopening beyond three years. The Tribunal, respectfully following the judgment of the Hon'ble Bombay High Court in Rohan Shelters Pvt. Ltd. Vs. ITO, held that once the condition stipulated in section 149(1)(b) is not fulfilled, the proceedings cannot be completed under section 147. Therefore, Ground of appeal No. 7 raised by the assessee was allowed. Since the legal grounds were allowed and the reassessment order quashed, the remaining grounds of appeal were rendered academic and not adjudicated. The appeal of the assessee was allowed.
The Tribunal held that the additions made by the AO were not justified. The Tribunal found that the AO relied heavily on digital and physical evidence like WhatsApp chats and retracted statements, rather than conducting independent inquiries. The 'Cash Books' relied upon contained both cash and bank transactions, and the AO failed to reconcile bank entries with regular books or bank statements. The Tribunal noted that for AY 2016-17, payments exceeded receipts, making the net profit addition uncalled for. Furthermore, the Tribunal observed inconsistencies in the AO's figures and the actual cash book totals. The Tribunal also emphasized that projections of later-year practices (from WhatsApp chats) backwards to earlier assessment years were not permissible without year-specific material. The Tribunal noted that the AO's estimation of 15% profit lacked a factual basis, and the CIT(A) correctly identified this lack of basis. Consequently, the Tribunal found that the Revenue failed to establish actual unaccounted sales or receipts attributable to the assessment years. The grounds raised by the assessee were sustained on merits, and the grounds raised by the revenue were dismissed.
The Tribunal held that the additions made by the AO were not justified. The Tribunal found that the AO relied heavily on digital and physical evidence like WhatsApp chats and retracted statements, rather than conducting independent inquiries. The 'Cash Books' relied upon contained both cash and bank transactions, and the AO failed to reconcile bank entries with regular books or bank statements. The Tribunal noted that for AY 2016-17, payments exceeded receipts, making the net profit addition uncalled for. Furthermore, the Tribunal observed inconsistencies in the AO's figures and the actual cash book totals. The Tribunal also emphasized that projections of later-year practices (from WhatsApp chats) backwards to earlier assessment years were not permissible without year-specific material. The Tribunal noted that the AO's estimation of 15% profit lacked a factual basis, and the CIT(A) correctly identified this lack of basis. Consequently, the Tribunal found that the Revenue failed to establish actual unaccounted sales or receipts attributable to the assessment years. The grounds raised by the assessee were sustained on merits, and the grounds raised by the revenue were dismissed.
The Tribunal dismissed all ten appeals filed by the Revenue. The Tribunal held that the mere pendency of a Special Leave Petition (SLP) before the Supreme Court against the decision in PCIT vs. Ojjus Medicare Pvt. Ltd. is not a ground to adopt a different approach when a binding decision of the jurisdictional High Court exists. The Tribunal upheld the learned CIT(A)'s decision to quash the Section 153C assessments. The reasoning was based on recent judicial precedents, including CIT-7 vs. RRJ Securities Ltd. and PCIT vs. Ojjus Medicare (P) Ltd., which established that the relevant date for calculating the block period under Section 153C(1), read with the first proviso, is the date of receiving the concerned seized material by the assessees' jurisdictional Assessing Officers. The Tribunal found no merit in the Revenue's contention that the block period should be calculated from the date of the search, as the CIT(A) had correctly determined that none of the assessment years involved fell within the specified period based on the date of receipt of seized material. All other pleadings on merits were rendered academic.
The Tribunal dismissed all ten appeals filed by the Revenue. The Tribunal held that the mere pendency of a Special Leave Petition (SLP) before the Supreme Court against the decision in PCIT vs. Ojjus Medicare Pvt. Ltd. is not a ground to adopt a different approach when a binding decision of the jurisdictional High Court exists. The Tribunal upheld the learned CIT(A)'s decision to quash the Section 153C assessments. The reasoning was based on recent judicial precedents, including CIT-7 vs. RRJ Securities Ltd. and PCIT vs. Ojjus Medicare (P) Ltd., which established that the relevant date for calculating the block period under Section 153C(1), read with the first proviso, is the date of receiving the concerned seized material by the assessees' jurisdictional Assessing Officers. The Tribunal found no merit in the Revenue's contention that the block period should be calculated from the date of the search, as the CIT(A) had correctly determined that none of the assessment years involved fell within the specified period based on the date of receipt of seized material. All other pleadings on merits were rendered academic.
The Tribunal held that the additions made by the AO were not justified. The Tribunal found that the AO relied heavily on digital and physical evidence like WhatsApp chats and retracted statements, rather than conducting independent inquiries. The 'Cash Books' relied upon contained both cash and bank transactions, and the AO failed to reconcile bank entries with regular books or bank statements. The Tribunal noted that for AY 2016-17, payments exceeded receipts, making the net profit addition uncalled for. Furthermore, the Tribunal observed inconsistencies in the AO's figures and the actual cash book totals. The Tribunal also emphasized that projections of later-year practices (from WhatsApp chats) backwards to earlier assessment years were not permissible without year-specific material. The Tribunal noted that the AO's estimation of 15% profit lacked a factual basis, and the CIT(A) correctly identified this lack of basis. Consequently, the Tribunal found that the Revenue failed to establish actual unaccounted sales or receipts attributable to the assessment years. The grounds raised by the assessee were sustained on merits, and the grounds raised by the revenue were dismissed.
The Tribunal held that the additions made by the AO were not justified. The Tribunal found that the AO relied heavily on digital and physical evidence like WhatsApp chats and retracted statements, rather than conducting independent inquiries. The 'Cash Books' relied upon contained both cash and bank transactions, and the AO failed to reconcile bank entries with regular books or bank statements. The Tribunal noted that for AY 2016-17, payments exceeded receipts, making the net profit addition uncalled for. Furthermore, the Tribunal observed inconsistencies in the AO's figures and the actual cash book totals. The Tribunal also emphasized that projections of later-year practices (from WhatsApp chats) backwards to earlier assessment years were not permissible without year-specific material. The Tribunal noted that the AO's estimation of 15% profit lacked a factual basis, and the CIT(A) correctly identified this lack of basis. Consequently, the Tribunal found that the Revenue failed to establish actual unaccounted sales or receipts attributable to the assessment years. The grounds raised by the assessee were sustained on merits, and the grounds raised by the revenue were dismissed.
The Tribunal held that the addition of Rs. 18,00,000/- under Section 68 of the Income Tax Act, 1961, was unsustainable. The assessee had discharged its onus by providing the ITRs, bank statements, and audited accounts of the three purchasing companies. The AO's sole reason for rejecting the explanation was the non-response to notices under Section 133(6). The Tribunal noted that the AO had not recorded any adverse comments on the furnished documents and that the purchase of shares by the assessee in earlier years was not disputed. Therefore, the addition of Rs. 18,00,000/- was directed to be deleted. Consequently, the addition of Rs. 36,000/- under Section 69C, which was consequential to the Section 68 addition, was also directed to be deleted. The Tribunal set aside the impugned order and allowed the appeal.
The Tribunal dismissed all ten appeals filed by the Revenue. The Tribunal held that the mere pendency of a Special Leave Petition (SLP) before the Supreme Court against the decision in PCIT vs. Ojjus Medicare Pvt. Ltd. is not a ground to adopt a different approach when a binding decision of the jurisdictional High Court exists. The Tribunal upheld the learned CIT(A)'s decision to quash the Section 153C assessments. The reasoning was based on recent judicial precedents, including CIT-7 vs. RRJ Securities Ltd. and PCIT vs. Ojjus Medicare (P) Ltd., which established that the relevant date for calculating the block period under Section 153C(1), read with the first proviso, is the date of receiving the concerned seized material by the assessees' jurisdictional Assessing Officers. The Tribunal found no merit in the Revenue's contention that the block period should be calculated from the date of the search, as the CIT(A) had correctly determined that none of the assessment years involved fell within the specified period based on the date of receipt of seized material. All other pleadings on merits were rendered academic.
The Tribunal held that while the assessee had provided a cash summary, it did not account for monthly drawings for household expenses, which would reduce the available cash balance. Therefore, the Tribunal made an ad-hoc and reasonable estimate of Rs. 2 lakhs per annum for household expenses for the year under consideration, deeming it to meet the ends of justice. Consequently, out of the sustained addition of Rs. 5,47,165, a sum of Rs. 2 lakhs was upheld, and the remaining Rs. 3,47,165 was deleted. The Tribunal found that the grounds raised by the assessee were partly allowed. The operative direction was to delete Rs. 3,47,165 from the addition.
The Tribunal held that once a resolution plan is duly approved by the Adjudicating Authority under Section 31 of the Insolvency and Bankruptcy Code, 2016, the claims as provided in the resolution plan become frozen and binding on all stakeholders, including the Central Government. Any claims not part of the resolution plan stand extinguished, and no person can initiate or continue proceedings for such claims. This principle applies to all dues, including statutory dues owed to the Central Government, if they are not part of the resolution plan. The Tribunal cited the Supreme Court's decisions in Ghanshyam Mishra and Essar Steel India Limited, and High Court decisions in TUF Metallurgical Pvt. Ltd. and Subhlabh Steels (P.) Ltd. to support this view. Consequently, the appeals filed by the Department were dismissed, as the tax claims pertaining to the assessment years involved were deemed to have been extinguished upon the approval of the resolution plan, as no such claims were part of the plan.
The Tribunal considered the findings of the lower authorities and the arguments presented by both sides. The Tribunal was of the view that the matter should be remanded back to the file of the CIT(A) for fresh adjudication. The Tribunal directed the CIT(A) to provide adequate opportunity of being heard to the appellant and also directed the assessee to file all relevant details and documents in time. The specific findings on the additions made under Section 69 and the validity of the ex-parte order were not definitively decided but were to be re-examined by the CIT(A). No issue was expressly left undecided.
The Tribunal held that the penalty levied under Section 271(1)(c) of the Act was untenable in law and directed its deletion. The primary reasoning was based on the fact that the Hon'ble Delhi High Court had admitted substantial questions of law in appeals concerning the quantum additions for all the assessment years under consideration. The Tribunal relied on the High Court's own precedents, specifically CIT vs. Liquid Investment and Trading Co. and Principal Commissioner of Income Tax, (Central)-2 vs. Harsh International (P.) Ltd., which established that if the assessment itself is debatable, as evidenced by the admission of substantial questions of law by the High Court, then penalty proceedings cannot survive. The Tribunal noted that the Hon'ble Delhi High Court, in a related matter, had observed that if the assumption of jurisdiction by the AO is found to be unlawful, the assessment orders and any findings of concealment would be without basis. Therefore, the penalty was deleted as it had become debatable. The issue of violation of principles of natural justice and precise charge was not explicitly decided due to the focus on the debatable nature of the issue.
The Tribunal held that the reopening of assessment u/s 147 was not permissible as it was based on the same set of material considered during the original assessment u/s 143(3). The Tribunal, respectfully following the judgments of the Hon'ble Supreme Court in CIT vs Kelvinator of India Ltd. and the jurisdictional High Court, opined that reassessment proceedings initiated without fresh tangible material in the possession of the AO after the completion of the original assessment are contrary to law. Such reopening vitiates the entire reassessment proceedings, which are hereby quashed. The legal grounds of appeal taken by the assessee are allowed. The issue of condonation of delay before the CIT(A) was not adjudicated on merits by the Tribunal as the primary issue of invalid reopening was decided in favour of the assessee. The Tribunal did not decide on the merits of the additions or the claim for depreciation or accumulation.
The Tribunal dismissed all ten appeals filed by the Revenue. The Tribunal held that the mere pendency of a Special Leave Petition (SLP) before the Supreme Court against the decision in PCIT vs. Ojjus Medicare Pvt. Ltd. is not a ground to adopt a different approach when a binding decision of the jurisdictional High Court exists. The Tribunal upheld the learned CIT(A)'s decision to quash the Section 153C assessments. The reasoning was based on recent judicial precedents, including CIT-7 vs. RRJ Securities Ltd. and PCIT vs. Ojjus Medicare (P) Ltd., which established that the relevant date for calculating the block period under Section 153C(1), read with the first proviso, is the date of receiving the concerned seized material by the assessees' jurisdictional Assessing Officers. The Tribunal found no merit in the Revenue's contention that the block period should be calculated from the date of the search, as the CIT(A) had correctly determined that none of the assessment years involved fell within the specified period based on the date of receipt of seized material. All other pleadings on merits were rendered academic.
The Tribunal dismissed all ten appeals filed by the Revenue. The Tribunal held that the mere pendency of a Special Leave Petition (SLP) before the Supreme Court against the decision in PCIT vs. Ojjus Medicare Pvt. Ltd. is not a ground to adopt a different approach when a binding decision of the jurisdictional High Court exists. The Tribunal upheld the learned CIT(A)'s decision to quash the Section 153C assessments. The reasoning was based on recent judicial precedents, including CIT-7 vs. RRJ Securities Ltd. and PCIT vs. Ojjus Medicare (P) Ltd., which established that the relevant date for calculating the block period under Section 153C(1), read with the first proviso, is the date of receiving the concerned seized material by the assessees' jurisdictional Assessing Officers. The Tribunal found no merit in the Revenue's contention that the block period should be calculated from the date of the search, as the CIT(A) had correctly determined that none of the assessment years involved fell within the specified period based on the date of receipt of seized material. All other pleadings on merits were rendered academic.
The Tribunal noted that the CIT(E) rejected the application for registration under Section 12A(1)(ac)(iii) by solely relying on the past cancellation order dated 26.9.2025, without independently evaluating the current application on its merits. It was also undisputed that the Tribunal had previously restored the erstwhile cancellation of registration vide its order dated 5.8.2026 in ITA No. 6766/Del/2025. In light of this, and in the interest of justice, the Tribunal decided to remit both issues back to the file of the CIT(E). The CIT(E) was directed to adjudicate the issues afresh, considering the Tribunal's order dated 5.8.2026, and to determine if the assessee trust fulfilled all statutory conditions. The assessee was also to be afforded an adequate opportunity of being heard and was directed to furnish complete details/evidences. The appeal concerning Section 12A registration (ITA No. 6096/Del/2026) and the appeal concerning Section 80G approval (ITA No. 6095/Del/2026) were both allowed for statistical purposes, with the operative direction being a remand.
The Tribunal considered the findings of the lower authorities and the reasons provided by the assessee for the belated filing of the appeal before the Ld. CIT(A). The Tribunal found sufficient reasons for the delay in filing the appeal before the Ld. CIT(A). Consequently, the Tribunal condoned the delay and remanded the matter back to the file of the Ld. CIT(A) for adjudication. The Ld. CIT(A) was directed to provide an adequate opportunity to the assessee to present its case. The assessee was also directed to file all required details and documents in a timely manner. The Tribunal allowed the appeal filed by the assessee for statistical purposes.
The Tribunal held that the services provided by the assessee to Jet Airways do not fall under the category of FTS under Article 12(5) of the India-Netherlands DTAA or Section 9(1)(vii) of the Act. The Tribunal noted that the assessee provides a software system on a subscription basis, and the revenue is earned per passenger. The assessee's assertion of no human intervention and the use of a standard facility for services, with servers located outside India, was not rebutted by the Revenue. The Tribunal relied on judicial precedents, including *Bharti Cellular Ltd. v CIT*, *Skycell Communications Ltd.*, and *Kotak Securities Ltd.*, which emphasize the necessity of human interface or direct and constant involvement of human endeavor for services to be classified as technical services. Furthermore, the Tribunal found that the 'make available' clause was not fulfilled, as Jet Airways does not apply the technology independently, is not privy to it, and the assessee retains intellectual property rights. Training and support services were limited to system usage and did not transfer technology. Therefore, the consideration received does not qualify as FTS. Grounds 1 to 5 were allowed. Ground 6 (interest under Section 234B) and Ground 7 (penalty under Section 270A) were noted as consequential and premature, respectively.
For AY 2015-16 to 2017-18, the Tribunal held that there was absolutely no material before it or in the impugned orders of the lower authorities to suggest that the AO had relied on any seized material or called for explanations based on incriminating material found during the search of the group. The Tribunal found no substance in the grounds raised by the department and agreed with the CIT(A)'s finding that in the absence of incriminating material found or seized during the search, the additions could not be sustained for these AYs. The Tribunal thus upheld the deletion of additions by the CIT(A). For AY 2018-19 to 2020-21, the Tribunal noted the admitted position that the assessee trust runs educational institutions. The AO alleged diversion of funds to other entities controlled by the chairman for personal benefit. Specifically, for AY 2018-19, an allegation of diversion of Rs. 100,00,00,000/- to M/s Tirupati Realbuild Pvt. Ltd. was made, with the AO observing that this entity and others were used as conduits for channeling funds. The judgment does not explicitly state the Tribunal's final decision on the denial of exemption and taxation of surplus for these years, but it details the allegations and the AO's observations regarding fund diversion. The operative part of the judgment for these years is not fully elaborated in the provided text, but the Tribunal's reasoning for AY 2015-16 to 2017-18 suggests a focus on the absence of incriminating material.
The Tribunal held that the Ld. CIT(A) rightly deleted the addition of unsecured loan under Section 68 of the Act. The assessee had discharged its burden by establishing the identity of the creditor, the creditworthiness of the creditor (considering earning capacity and ability to make payment), and the genuineness of the transaction. The loan was received and repaid through banking channels, supported by bank statements and ledger accounts. The Tribunal followed the coordinate bench decision in Real Innerspring Technologies (P.) Ltd., which held that loans repaid along with interest through banking channels indicate genuine transactions, and every transaction must be evaluated on its merit rather than suspicion. Consequently, the grounds raised by the Revenue were dismissed. The issue regarding commission under Section 69C was implicitly decided in favour of the assessee as the Tribunal dismissed all grounds raised by the Revenue, implying agreement with the Ld. CIT(A)'s deletion of this addition. The appeals for both AYs 2019-20 and 2020-21 were dismissed.
The Tribunal held that the Ld. CIT(A) rightly deleted the addition of unsecured loan under Section 68 of the Act. The assessee had discharged its burden by establishing the identity of the creditor, the creditworthiness of the creditor (considering earning capacity and ability to make payment), and the genuineness of the transaction. The loan was received and repaid through banking channels, supported by bank statements and ledger accounts. The Tribunal followed the coordinate bench decision in Real Innerspring Technologies (P.) Ltd., which held that loans repaid along with interest through banking channels indicate genuine transactions, and every transaction must be evaluated on its merit rather than suspicion. Consequently, the grounds raised by the Revenue were dismissed. The issue regarding commission under Section 69C was implicitly decided in favour of the assessee as the Tribunal dismissed all grounds raised by the Revenue, implying agreement with the Ld. CIT(A)'s deletion of this addition. The appeals for both AYs 2019-20 and 2020-21 were dismissed.
The Tribunal held that the Revenue's appeal is not maintainable. The reasoning was based on the concession made by the learned Departmental Representative that the total tax effect of Rs. 6,93,420/- is below the minimum monetary limit of Rs. 60 lakhs stipulated in CBDT Circular No. 9/2024, dated 17.09.2024. The Tribunal further noted that the Departmental Representative acknowledged the retrospective applicability of this circular to all pending appeals. Consequently, the Tribunal rejected the Revenue's appeal on this precise ground, subject to all just exceptions. No other issues were decided.
The Tribunal held that the possibility of communication gaps, especially with the newly introduced virtual hearing mechanism, could not be ruled out. In the larger interest of justice, it was deemed appropriate to restore the assessee's appeal back to the CIT(A)/NFAC for fresh adjudication. The CIT(A)/NFAC was directed to provide three effective opportunities of hearing to the appellant, at the appellant's risk and responsibility, for consequential proceedings. The Tribunal allowed the assessee's appeal for statistical purposes. No specific issue regarding the merits of the additions made under section 147 was decided.
The Tribunal held that once a resolution plan is duly approved by the Adjudicating Authority under Section 31 of the Insolvency and Bankruptcy Code, 2016, the claims as provided in the resolution plan become frozen and binding on all stakeholders, including the Central Government. Any claims not part of the resolution plan stand extinguished, and no person can initiate or continue proceedings for such claims. This principle applies to all dues, including statutory dues owed to the Central Government, if they are not part of the resolution plan. The Tribunal cited the Supreme Court's decisions in Ghanshyam Mishra and Essar Steel India Limited, and High Court decisions in TUF Metallurgical Pvt. Ltd. and Subhlabh Steels (P.) Ltd. to support this view. Consequently, the appeals filed by the Department were dismissed, as the tax claims pertaining to the assessment years involved were deemed to have been extinguished upon the approval of the resolution plan, as no such claims were part of the plan.
The Tribunal held that grounds 1 to 3 were not pressed by the assessee's counsel and were therefore decided against the assessee. Regarding grounds 4 and 5, the Tribunal noted that the assessee's surrendered income pertained to a period before 11-08-2016. Following the decisions of the Madras High Court in S.M.I.L.E. Microfinance Ltd. v. ACIT and the co-ordinate bench in Vijay Kumar Bansal v. Deputy Commissioner, the Tribunal held that the amended provisions of Section 115BBE, prescribing a 60% tax rate, would only come into effect for transactions on or after 01-04-2017. Since the assessee's transactions were prior to this date, the Tribunal directed the Assessing Officer to tax the additional income under the normal provisions of tax, without recourse to Section 115BBE. Consequently, grounds 4 and 5 were allowed. The appeal was partly allowed.
The Tribunal allowed Ground No. 1 of the appeal. It held that the assessee died during the penalty proceedings. The penalty order was passed on 26-08-2021, and notices were issued on 16-03-2021 and 17-05-2021, all in the name of the deceased assessee. The Tribunal, respectfully following the decision in Mangadu Natarajan Balasundharam v. The Income Tax Officer (Chennai), held that legal heirs are not liable for penalty proceedings after the assessee's demise, particularly when the assessment was completed in the assessee's name, but the penalty was levied against a dead person. The reasoning is that the proceedings were conducted against a deceased individual, making them invalid. The Tribunal did not decide on the other grounds raised by the assessee.
The Tribunal held that the appeal filed by the assessee was not maintainable. The primary reasons for this decision were the delay in filing the appeal before the ITAT (3 days) for which no condonation petition was filed, and the fact that the assessee did not appear before the Tribunal. Furthermore, the Tribunal noted that the assessee's earlier appeal before the NFAC was dismissed due to a significant delay of 795 days, which the NFAC had not condoned. The Tribunal also observed that the notice sent to the assessee was returned unserved with the remark 'no such firm', and the assessee had not provided an updated address. These factors led the Tribunal to conclude that the assessee was not interested in pursuing the appeal. Therefore, the appeal was dismissed on procedural grounds.
The Tribunal held that the AO erred in law and on facts by passing the assessment order without proper jurisdiction. The assessment order was based on a notice issued by an ITO who did not have jurisdiction over the assessee's case, and there was no order under Section 127 for the transfer of the case. Therefore, the assessment order was void ab initio. The Tribunal also noted that the SEBI report, which formed the basis for the additions, was later revoked by SEBI, further weakening the AO's findings. Regarding the additions under Section 68, the Tribunal found that the assessee had provided substantial documentary evidence, including bank statements, D-mat statements, contract notes, and broker statements, which the AO failed to controvert. The Tribunal observed that the AO's reasoning that a prudent person would not make such an investment was subjective and not a valid ground to disregard the evidence. Crucially, the Tribunal held that Section 68 is applicable only when books of account are maintained by the assessee and a sum is found credited therein. Since the assessee did not maintain books of account, the provisions of Section 68 were not applicable, neither for the full transaction amount nor for a part of it. Consequently, the addition made under Section 68 was deleted. As the addition under Section 68 was deleted, the consequential addition made under Section 69C for commission was also deleted as it was based on the presumption of commission on the unexplained expenditure. The appeal of the assessee was allowed in its entirety.
The Tribunal held that the protective addition made in the hands of the assessee is not sustainable. The Assessing Officer had made a protective addition of Rs. 20.98 crore in the assessee's hands, considering the assessee as a conduit for transferring funds to M/s Rajyog Buildtech Private Limited, where a substantive addition was made. However, it was noted that the substantive addition made in the hands of M/s Rajyog Buildtech Private Limited for AY 2014-15 had been deleted by the CIT(A) and this deletion was upheld by the ITAT. The Tribunal relied on the settled legal principle that a protective addition must have a substantive addition as its foundation. Since the substantive addition in the case of M/s Rajyog Buildtech Private Limited had ceased to exist, the protective addition in the assessee's case also did not survive. The Tribunal cited decisions in Kanaw Metals Vs. ITO and DCIT Vs. Artline Vinimay Pvt. Ltd. to support this view. Therefore, the Tribunal affirmed the order of the CIT(A) and deleted the protective addition.
The Tribunal held that the CIT(A) had indeed obtained a remand report from the AO and considered the assessee's rejoinder. The AO's report indicated that for AY 2023-24, a Show Cause Notice (SCN) was issued, and earlier notices under Section 142(1) were also served. The AO acknowledged potential constraints and suggested further opportunity if natural justice was not observed. However, the Tribunal noted that the CIT(A) found the expenditure debited to the P&L account in respect of commission paid to the five parties was Rs. 43,42,602/-, not Rs. 2,43,23,025/- as disallowed. TDS at 5% had been deducted on this amount. The AO had not brought any adverse evidence on record, either during the original assessment or remand proceedings, to prove the expenditure was non-genuine or the parties were non-existent. The Tribunal concluded that the mere fact that parties were non-filers could not be a reason to disallow the expenditure in the hands of the assessee. Therefore, the order of the CIT(A) was considered well-reasoned and justified.
The Tribunal held that the reopening of the assessment was bad in law. The original assessment for AY 2012-13 was completed under Section 143(3) of the Act on January 28, 2015. The notice under Section 148 was issued on March 31, 2019, which is beyond four years from the end of the relevant assessment year. The first proviso to Section 147 of the Act stipulates that no action can be taken under Section 147 after the expiry of four years from the end of the relevant assessment year unless income chargeable to tax has escaped assessment due to the assessee's failure to disclose fully and truly all material facts. The Revenue failed to establish any such failure on the part of the assessee. The Tribunal relied on the Supreme Court's decision in CIT vs. Foramer France, which affirmed that if the original assessment was under Section 143(3) and the reopening is beyond four years, the notice under Section 148 is illegal if there was no failure on the part of the assessee to disclose material facts. Consequently, the reopening was quashed, and the jurisdictional issue was decided in favour of the assessee. The Tribunal did not adjudicate the issues on merits as the reopening was quashed.
The Tribunal upheld the CIT(A)'s decision. Regarding the first issue, the Tribunal noted that the assessment was based on incriminating material seized from the laptop of Sh. Saurabh Gupta, an employee of M/s OPG Securities Pvt. Ltd., which is a third-party premise. It is well-settled law that even in coordinated searches, incriminating material derived from third-party premises can only be assessed under section 153C of the Act, as supported by the Delhi High Court's decision in Anand Kumar Jain HUF. Therefore, the Tribunal affirmed the CIT(A)'s finding that proceedings should have been under section 153C and rejected the Revenue's grounds. On the merits of the case, the Tribunal noted that the protective addition of Rs. 7.50 crore was made in the assessee's hands. However, the substantive addition of Rs. 7.50 crore was made in the hands of Sanjay Singhal for AY 2015-16. The Tribunal further noted that a Coordinate Bench of the Delhi Tribunal had quashed the entire assessment proceedings in the case of Sanjay Singhal. Relying on the principle that if a substantive addition does not survive, a protective addition also does not survive, and citing the Delhi High Court's decision in PCIT vs. Electrical and Electronic India Ltd., the Tribunal held that the protective addition in the assessee's case was not sustainable. Consequently, the CIT(A)'s deletion of the addition was affirmed. The appeals for both assessment years were dismissed.
The Tribunal restored the issue to the NFAC for a decision on merit, granting the assessee a final opportunity to present its case. This was done because the assessee's quantum appeal had been restored before the NFAC.
The Tribunal, respectfully following its co-ordinate bench's decision in the assessee's own case for AYs 2013-14 to 2016-17 (ITA Nos. 807 to 810/Del/2023), decided to restrict the Gross Profit (GP) rate. The co-ordinate bench had observed that while parties did not respond to notices under section 133(6) and the AO could not verify genuineness, the assessee had provided VAT registration and bank account details, proving identity and creditworthiness. The Tribunal noted that the AO had accepted sales against purchases and all transactions were through banking channels. However, the co-ordinate bench also emphasized that the onus to prove the genuineness of expenditure lies with the assessee, including the source of payments for purchases. Applying the GP rate of 2.88% on alleged bogus purchases was deemed excessive. Therefore, in the interest of justice, the GP rate was restricted to 1%, aligning with the average GP declared by the assessee (0.67% to 1.52%) during AYs 2013-14 to 2016-17. This decision was made with the rider that it would not be treated as a precedent. Necessary computations were to follow as per law. The grounds raised by the assessee were partly allowed.
The Tribunal held that both the order of the AO and the order of the CIT(A) were passed ex parte. In the interest of justice and fair play, the Tribunal deemed it fit and appropriate to restore the appeal to the file of the AO for denovo adjudication in accordance with the law. The assessee was to be given a reasonable opportunity of being heard and was at liberty to furnish fresh evidence. The assessee was also directed to cooperate with the AO for expeditious disposal of the assessment proceedings without seeking unwarranted adjournments, except in exceptional or bonafide circumstances. The assessee was entitled to file additional evidence. The grounds raised by the assessee were allowed for statistical purposes.
The Tribunal upheld the CIT(A)'s decision. Regarding the first issue, the Tribunal noted that the assessment was based on incriminating material seized from the laptop of Sh. Saurabh Gupta, an employee of M/s OPG Securities Pvt. Ltd., which is a third-party premise. It is well-settled law that even in coordinated searches, incriminating material derived from third-party premises can only be assessed under section 153C of the Act, as supported by the Delhi High Court's decision in Anand Kumar Jain HUF. Therefore, the Tribunal affirmed the CIT(A)'s finding that proceedings should have been under section 153C and rejected the Revenue's grounds. On the merits of the case, the Tribunal noted that the protective addition of Rs. 7.50 crore was made in the assessee's hands. However, the substantive addition of Rs. 7.50 crore was made in the hands of Sanjay Singhal for AY 2015-16. The Tribunal further noted that a Coordinate Bench of the Delhi Tribunal had quashed the entire assessment proceedings in the case of Sanjay Singhal. Relying on the principle that if a substantive addition does not survive, a protective addition also does not survive, and citing the Delhi High Court's decision in PCIT vs. Electrical and Electronic India Ltd., the Tribunal held that the protective addition in the assessee's case was not sustainable. Consequently, the CIT(A)'s deletion of the addition was affirmed. The appeals for both assessment years were dismissed.
The Tribunal considered the findings of the Ld. CIT(A)/NFAC in dismissing the appeal in limine on the ground of delay and also reviewed the reasons provided by the assessee's counsel for the delay. The Tribunal was of the considered view that the delay in filing the appeal could be condoned. Consequently, the matter was restored to the file of the Ld. CIT(A)/NFAC for adjudication of the case afresh, with an adequate opportunity to be provided to the assessee. The assessee was also directed to file all relevant details and documents before the Ld. CIT(A)/NFAC in a timely manner. The Tribunal explicitly stated that the appeal was allowed for statistical purposes, implying that the substantive issues were not adjudicated on merits by the ITAT itself, but rather the procedural hurdle was overcome to allow for a fresh hearing before the lower appellate authority. No issue was expressly left undecided, as the primary decision was to remand.
The Tribunal held that the ex-gratia compensation received by the assessee under the BSNL Voluntary Retirement Scheme, 2019, is in the nature of retrenchment compensation and falls under the provisions of Section 10(10B) of the Act, not Section 10(10C). Consequently, such compensation is in the nature of a capital receipt and is exempt from tax. The Tribunal's reasoning was based on following the decisions of coordinate benches of the ITAT, including those in Pune, Ahmedabad, and Chandigarh, which had consistently decided similar issues in favour of the assessees. The Tribunal noted that the Revenue had not presented any contrary High Court decisions. The Tribunal also referred to the Supreme Court's judgment in Mahendra Singh Dhantwal v. Hindustan Motors Ltd., which emphasized that the substance, rather than the form, matters in defining retrenchment compensation, and that a pragmatic approach should be taken for employees in the lower rung of hierarchy. The Tribunal set aside the impugned findings of the CIT(A). As an operative direction, the assessee(s) were directed to place a revised computation of income before their respective Jurisdictional Assessing Officers claiming the exemption under Section 10(10B), after which the Revenue authorities would compute the tax liability and grant any refund due after due verification. No issue was expressly left undecided.
The Tribunal held that the ex-gratia compensation received by the assessee under the BSNL Voluntary Retirement Scheme, 2019, is in the nature of retrenchment compensation and falls under the provisions of Section 10(10B) of the Act, not Section 10(10C). Consequently, such compensation is in the nature of a capital receipt and is exempt from tax. The Tribunal's reasoning was based on following the decisions of coordinate benches of the ITAT, including those in Pune, Ahmedabad, and Chandigarh, which had consistently decided similar issues in favour of the assessees. The Tribunal noted that the Revenue had not presented any contrary High Court decisions. The Tribunal also referred to the Supreme Court's judgment in Mahendra Singh Dhantwal v. Hindustan Motors Ltd., which emphasized that the substance, rather than the form, matters in defining retrenchment compensation, and that a pragmatic approach should be taken for employees in the lower rung of hierarchy. The Tribunal set aside the impugned findings of the CIT(A). As an operative direction, the assessee(s) were directed to place a revised computation of income before their respective Jurisdictional Assessing Officers claiming the exemption under Section 10(10B), after which the Revenue authorities would compute the tax liability and grant any refund due after due verification. No issue was expressly left undecided.
The Tribunal acknowledged the possibility of communication gaps at various levels, which could not be entirely ruled out. Therefore, in the larger interest of justice, it was deemed appropriate to restore the assessee's appeal back to the Commissioner of Income Tax (Appeals) for fresh adjudication. The CIT(A) was directed to provide three effective opportunities of hearing to the appellant, at the appellant's risk and responsibility, for consequential proceedings. The Tribunal allowed the assessee's appeal for statistical purposes. No specific issue was left undecided, as the primary decision was to remand the matter for a fresh hearing.
The Tribunal noted that the assessee claimed the increase in share capital was through conversion of unsecured loans from directors. However, the assessee failed to provide sufficient evidence to substantiate this claim, leading to the addition being upheld.
The Tribunal held that penalty proceedings are distinct from assessment proceedings and the PCIT cannot direct the Assessing Officer (AO) to initiate penalty proceedings under Section 263. The revisionary order was quashed as the PCIT's jurisdiction was not justified.
The Tribunal held that the assessee had technically violated Section 13(1)(d) by holding investments not specified under Section 11(5). However, following the Supreme Court's decision in CIT vs. Fr. Mullers Charitable Institution, the Tribunal found that such a violation does not result in the denial of exemption for the entire income of the trust. The forfeiture is confined only to the income arising from the offending investments, which is taxable at the maximum marginal rate. The Tribunal noted that the income and expenditure account for the relevant AYs showed no dividend income, capital gain, interest income, or any other revenue credited in respect of the shares held in Glori Oil Ltd., TIMES (Kuwait), or ONGC TERI Biotech Ltd. Since no income arose from these investments during the relevant period, no amount was liable to be taxed. Therefore, the denial of exemption under Sections 11 and 12 in its entirety by the AO was held to be legally unsustainable. The AO was directed to allow the benefit of exemption under Section 11 of the Act on the entire income of the assessee.
The Tribunal held in favour of the assessee on all grounds. Regarding employees' benefits expenses, the Tribunal found that the AO and CIT(A) did not consider the details and documents filed by the assessee, which showed that the total salary of the employees did not attract TDS. Therefore, the disallowance was unsustainable. For the interest on unsecured loans, the Tribunal noted that the disallowance by both lower authorities was made on an estimated basis without proper reasoning. The Tribunal stated that if the payment was not justified, the entire interest should have been disallowed, not a portion on an ad-hoc basis. Similarly, concerning outstanding creditors, the Tribunal found that the 25% disallowance was made on an ad-hoc/estimated basis without any material on record to prove that the creditors were not genuine. The Ld. DR could not rebut these contentions. Accordingly, the disallowance of creditors was also deemed unjustified. The appeal was allowed on all issues.
The Tribunal held that the assessee had technically violated Section 13(1)(d) by holding investments not specified under Section 11(5). However, following the Supreme Court's decision in CIT vs. Fr. Mullers Charitable Institution, the Tribunal found that such a violation does not result in the denial of exemption for the entire income of the trust. The forfeiture is confined only to the income arising from the offending investments, which is taxable at the maximum marginal rate. The Tribunal noted that the income and expenditure account for the relevant AYs showed no dividend income, capital gain, interest income, or any other revenue credited in respect of the shares held in Glori Oil Ltd., TIMES (Kuwait), or ONGC TERI Biotech Ltd. Since no income arose from these investments during the relevant period, no amount was liable to be taxed. Therefore, the denial of exemption under Sections 11 and 12 in its entirety by the AO was held to be legally unsustainable. The AO was directed to allow the benefit of exemption under Section 11 of the Act on the entire income of the assessee.
The Tribunal acknowledged that the assessee did not file the required details before the AO, leading to the additions. It also noted that the CIT(A) did not accept the additional evidence filed by the assessee and confirmed the AO's order. Considering the principle of natural justice, the Tribunal decided to remand the issue back to the file of the CIT(A) for fresh adjudication. The Tribunal accepted all additional papers and documents filed before it and directed the assessee to resubmit all required details and documents before the CIT(A). The CIT(A) is instructed to pass a fresh adjudication order after providing the assessee with an adequate opportunity to be heard as required by law. The appeal is allowed for statistical purposes. No specific issue was expressly left undecided.
The Tribunal held that the assessee could not be denied the benefit of Section 54 merely because the purchase could not be completed due to circumstances beyond her control, especially when payments were made within the stipulated period. The matter was restored to the AO for verification of LTCG computation and consideration of the Section 54 claim.
The Tribunal held that the order passed by the Ld. CIT(A) deleting the penalty was just and proper and did not warrant interference. The Tribunal considered the facts that the short-term capital loss was disclosed, there was no suppression of income, and the loss was neither utilized for set-off nor carried forward in reality. The "wrong claim" in the e-return filed under Section 148 was explained as system-driven and legally non-operative in view of Section 80 of the Act. Furthermore, no tax advantage accrued, and the reassessment concluded at the original returned loss. Therefore, the Tribunal found that the mens rea or deliberate furnishing of inaccurate particulars was not present. The Tribunal respectfully relied on the Bombay High Court's decision in CIT vs. First India Private Limited and the Apex Court's decision in Reliance Petroproducts Pvt. Ltd. 322 ITR 158 (SC), which held that mere rejection of a claim does not automatically attract penalty and that penalty provisions cannot be invoked merely because an assessee made a claim which did not ultimately result in tax benefits. The Tribunal concluded that the CIT(A)'s order was sound.