ITAT Indore Judgments — December 2024

The Tribunal noted that the assessee had a meritorious case and that substantial justice should be preferred over technical considerations. It observed that the assessee was entitled to exemption under Section 11/12 based on the proviso to Section 12A(2), as assessment proceedings were pending when registration was granted. The delay was condoned subject to payment of costs.

The tribunal noted the assessee's submission regarding the Vivad Se Vishwas Scheme application. Recording these details, the tribunal decided to dismiss the appeal as withdrawn. The assessee was also informed that they could revive the appeal if their scheme application was rejected.

The Tribunal held that the CIT(A) had overlooked crucial facts and evidence, specifically the statement of the assessee's Saving Bank Account from which Rs. 12,20,000/- was withdrawn on 24.02.2016. The Tribunal also noted that the purchase of agricultural land occurred prior to this withdrawal, negating the Revenue's claim that the withdrawn amount was used for the land purchase.

The Tribunal noted that the addition by the AO was based on surrounding circumstances without direct material, and the CIT(A) dismissed the appeal ex-parte for non-prosecution. The assessee was not given a fair opportunity to present their case.

The Tribunal held that the assessee demonstrated a bona fide inadvertent human mistake in declaring the total cash and cash equivalent balance as cash in hand in the return of income, rather than segregating cash in hand, bank balances, and FDRs. This mistake was evident from the detailed breakup of accounts and was not a mala fide attempt to inflate cash in hand.

The Tribunal held that the CIT(A) erred in confirming the addition without proper verification. While the CIT(A) correctly identified Section 69A as the appropriate section, the matter required detailed verification of the transactions, especially considering the volume of documents produced. The Tribunal noted that merely depositing in Specified Bank Notes should not be a ground for addition if the source is explained.

The Tribunal held that the CIT(E) erred in denying registration u/s 12AB solely based on the potential for commercial activities in the assessee's objects, as Section 2(15) allows for commerciality up to 20% and the assessee had not yet engaged in such activities. For the 80G approval, the matter was remanded to the CIT(E) due to a new CBDT circular extending the time limit for fresh applications.

The Tribunal noted that the assessee had filed a valid belated return for AY 2019-20 based on a CBDT order extending the due date. It was held that the disallowance made by the CPC under Section 143(1) on the grounds of delayed filing was not tenable as per the provisions of Section 143(1) existing at that time, and also considering a consistent view from the ITAT, Rajkot.