ITAT Guwahati Judgments — January 2025

The Tribunal observed that the assessee failed to prove the source of the cash deposits and eligibility for exemption under section 10(26). The Trade License produced by the assessee was for AY 2018-19, not the relevant AY 2017-18, thus failing to substantiate the claim for the impugned year. Consequently, the Tribunal upheld the addition made by the AO, concluding that the assessee failed to explain the source of her cash deposits.

The Tribunal dismissed the appeal as withdrawn, acknowledging the assessee's participation in the VSVS 2024 Scheme. However, the Tribunal granted the assessee the liberty to file a miscellaneous application to revive the appeal if they are unsuccessful in the VSVS-24 for any reason.

The Tribunal found that the CIT(A) enhanced income without considering the assessee's submissions and that the accounting treatment of cash sales (included in total sales and also added u/s 68) was not in consonance with accounting principles. It directed that if sales were treated as unexplained cash credit, they should be reduced from reported sales and the P&L recast. The Tribunal set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for de novo consideration, with directions to provide another opportunity to the assessee.

The Tribunal upheld the CIT(A)'s deletion of the Rs. 3,62,00,000/- addition, affirming that it was not based on incriminating material found during the search and seizure operation. While the initiation of proceedings under Section 153C was deemed valid due to incriminating material, the specific addition itself was based on pre-existing records rather than the seized material, which is not permissible for completed assessments without specific incriminating evidence. The Tribunal dismissed the Revenue's appeal, effectively confirming the deletion of the addition, and partly allowed the assessee's cross-objection, by allowing the challenge to the addition but dismissing the ground regarding mechanical approval under Section 153D.

The Tribunal acknowledged that criminal proceedings against the assessee were still ongoing, with appeals pending in higher courts, and no final quantification of pecuniary gains. It ruled that no income could be deemed to have accrued until a clear finding from the competent criminal courts. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the appeals back to the CIT(A) for fresh adjudication after the conclusion of the criminal proceedings.

The Tribunal observed that the criminal proceedings against the assessee regarding the alleged frauds were not yet finalized, and no clear finding on the actual benefit accrued to the assessee had been delivered by the competent courts. It held that additions to income based on estimations from such unconcluded criminal matters were not justified. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the appeals back to the CIT(A) with directions to await the final orders of the competent courts before reassessing the income.

The Tribunal determined that while Section 69C might not be strictly applicable as the expenditure was recorded in books, the assessee failed to produce primary evidence (vouchers) for the claimed business expenses. Applying the principle that a wrong section citation does not invalidate an order if jurisdiction exists, the Tribunal sustained 10% of the original disallowed amount (Rs. 29,71,678/-) due to the lack of supporting vouchers, while deleting the remaining 90%.

The Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for fresh adjudication. The assessee is instructed to submit the correct Audit Reports and a certificate from the Tax Auditor explaining the error. The CIT(A) is directed to decide the case on merits in accordance with the law after providing the assessee a fair hearing, and the appeals were allowed for statistical purposes.

The Tribunal observed that the assessee's income was exempt from tax under Section 10(26), leading to a reasonable belief that there were no tax implications for the transaction. Applying Section 273B, the Tribunal found that the assessee had a 'reasonable cause' for the failure to comply with the provisions of Section 269SS. Consequently, the Tribunal set aside the CIT(A)'s finding and directed the Assessing Officer to delete the penalty levied under Section 271D of the Act.

The Tribunal noted that CBDT Circular No. 07/2024, issued on the same day as the rejection order, extended the due date for Form 10AB applications until 30.06.2024. Considering this, the Tribunal found no delay in the assessee's filing and set aside the CIT(Exemption)'s order, remanding the matter for a fresh decision on merits in accordance with law.

The Tribunal condoned the delay in filing the appeal, referencing Supreme Court and High Court judgments on condonation and finding that proper notices were not served as per Section 282(1) of the IT Act and Rule 127(1) of the IT Rules. The Tribunal set aside the NFAC's order and remitted the matter back for de novo adjudication on merits, ensuring reasonable opportunities for the assessee.

The Tribunal held that the Tripura State Co-operative Bank, from which the assessee derived interest income, operates as a co-operative bank engaged in banking business, and therefore, the provisions of section 80P(4) of the Act apply. Section 80P(4) specifically excludes co-operative banks (other than primary agricultural credit societies) from the benefits of section 80P. Given the legislative intent to treat co-operative banks at par with commercial banks post-2007 amendments, interest income from such banks is not eligible for deduction under section 80P(2)(d).

The Tribunal observed that the assessee had, in fact, submitted relevant documentary evidence to the AO which was overlooked by the lower authorities. As the books of account were also not rejected, the Tribunal set aside the CIT(A)'s findings and restored the issues to the CIT(A) for fresh (de novo) adjudication, directing them to consider all documentary evidence.

The Tribunal found an apparent error in the AO's assessment regarding a loan from Shanti Kumar Jain, where Rs.4.00 crore was mistakenly recorded instead of Rs.4.00 lakh, leading to the deletion of Rs.3.96 crore from the addition. For the remaining unsecured loans of Rs.3,75,74,960/-, the matter was remanded to the Jurisdictional Assessing Officer for fresh verification as the details of identity, creditworthiness, and genuineness were not clearly discernible from the lower orders. The Tribunal also directed the rectification of the AO's mistake in showing Nil returned income despite the assessee having declared a loss.

The Tribunal held that the CIT(A) erred by dismissing the appeal for non-prosecution without passing a speaking order on merits, which is mandated by Section 250(6) of the Income Tax Act. Citing legal precedents, it affirmed that the CIT(A) must adjudicate appeals on merits after providing a reasonable opportunity of hearing. Consequently, the case was remitted back to the CIT(A) for fresh adjudication in accordance with the law.

The Tribunal set aside the CIT(A)'s order, remitting the issues back for fresh consideration. It directed the CIT(A) to provide the assessee an opportunity to file the correct Audit Report and a certificate from the Tax Auditor explaining the mistake, and then decide the matter in accordance with law.

The Tribunal found that the assessee had, in fact, properly filed the necessary documents before the CIT(A)/NFAC. Consequently, the Tribunal set aside the CIT(A)/NFAC's order and remanded both the quantum and penalty appeals for de-novo adjudication. The CIT(A)/NFAC was directed to pass a speaking order after affording reasonable opportunities of hearing.

The Tribunal found that the assessee had, in fact, properly filed all necessary documents before the CIT(A), contrary to the CIT(A)'s finding. Therefore, the ITAT set aside the CIT(A)'s orders for both the quantum and penalty appeals and remitted the matters back to the CIT(A)/NFAC for de novo adjudication on merits, with directions to provide reasonable opportunities of hearing to the assessee.

The Income Tax Appellate Tribunal upheld the decision of the Addl/JCIT(A), confirming that the assessee had filed the Audit Report in Form 10B within the extended due date as per section 139(1) of the Act. The Tribunal found no infirmity in the Addl/JCIT(A)'s order allowing the exemption under section 11 and therefore dismissed the Revenue's appeal.

The Tribunal noted the assessee's claim of being a Tribal person eligible for Section 10(26) exemption and that Lushai Engineers is a proprietary concern. Due to the assessee's lack of awareness and non-participation, the Tribunal remitted the matter back to the NFAC for de novo adjudication, granting the assessee a fresh opportunity to present evidence and substantiate claims. The CIT(A) order was set aside.

The Tribunal, with no objection from the Departmental Representative, set aside the orders of both the CIT(A) and the Assessing Officer. The matter was remitted back to the AO for a fresh assessment (de novo) to provide the assessee a proper opportunity to present evidence regarding the Section 10(26) exemption claim, which had not been submitted to the lower authorities.

The Income Tax Appellate Tribunal (ITAT) remanded both appeals back to the Assessing Officer (AO) for a proper investigation into the assessee's accounts. The AO is directed to assess the true and correct income after providing the assessee adequate opportunity, expecting cooperation from the assessee.

The Tribunal noted the assessee's non-cooperation with the AO during assessment proceedings. While acknowledging that a retracted statement alone may not be sufficient for additions, the ITAT found that the CIT(A) underplayed the assessee's non-compliance. Therefore, the ITAT remanded both matters back to the AO for a proper investigation, instructing the AO to give adequate opportunity to the assessee, who in turn should cooperate.

The Tribunal held that the assessee is an educational institution, and the cash deposit of Rs. 12,97,000/-, being less than the total fees received from students (Rs. 82,08,600/-), could be presumed to be from student fees. It clarified that registration u/s 12A/12AA is not a prerequisite for exemption u/s 10(23C)(iiiad) if the institution exists solely for educational purposes and its receipts are below the prescribed limit. The CIT(A)'s order was set aside, and the AO was directed to delete the addition.