ITAT Indore Judgments — April 2025

The Tribunal noted that the assessee was not disputing the legal position that 'Provision for Bad & Doubtful debts' is not an allowable deduction for its business as per the lower authorities' view. However, the assessee's primary contention was that it had already made a suo motu disallowance of Rs. 47,31,00,000/- before filing its return of income. The assessee supported this claim with a 'Computation of Total Income' sheet. Both the assessee and the revenue agreed that the issue should be remitted to the AO for fresh adjudication after factual verification of the assessee's claim. Consequently, the Tribunal remanded the issue to the AO for fresh adjudication. The assessee was directed to make an adequate representation and avail opportunities without unnecessary adjournments, and the AO was directed to provide proper opportunities. The appeal was allowed for statistical purposes.

The Tribunal found that the Ld.CIT(A) erred in admitting additional evidence, including corrected financials and a confirmation ledger, without allowing the AO an opportunity to examine them or calling for a specific report. The Ld.CIT(A) did not follow the procedure under Rule 46A(3) of the Income Tax Rules, 1962.

The Tribunal accepted the submissions made by both parties. It was held that the learned CIT(A) had dismissed the assessee's first appeal on a wrong assumption of fact, believing that the assessee had settled its case under the 'Vivad Se Vishwas Scheme, 2020'. The Tribunal acknowledged the assessee's clarification that the settlement under VsV pertained to the dispute arising from the assessment order, not the penalty order that was under appeal before the CIT(A). Consequently, the Tribunal set aside the impugned order passed by the CIT(A). The CIT(A) was directed to re-fix the assessee's first appeal and dispose of it on its merits after hearing the assessee. The Tribunal did not decide the merits of the penalty proceedings themselves.

The Tribunal found that the assessee raised contentions regarding lack of proper opportunity and jurisdiction. The Tribunal set aside the impugned order and remanded the matter back to the CIT(A) for a fresh adjudication on merits, allowing the assessee to refile submissions.

The Tribunal found that the CIT(A) order was passed in violation of natural justice as the assessee did not receive proper notices. Therefore, the impugned order was set aside.

The Tribunal held that the impugned order had not examined the merits of the case as required by law and that no opportunity of hearing was afforded to the assessee. Therefore, the Tribunal set aside the impugned order and remanded the case back to the CIT(A) for a fresh order after giving a reasonable opportunity to the assessee.

The Tribunal held that the impugned order did not examine the merits of the case and the assessee could not avail the opportunity of hearing due to bonafide reasons. Therefore, the Tribunal set aside the impugned order and remanded the case back to the AO for a fresh assessment.

The Tribunal allowed the withdrawal of the appeal, noting that the departmental representative did not object to the request. The appeal was dismissed as withdrawn.

The Tribunal allowed the assessee to withdraw the current appeal. The Tribunal noted that the assessee would be free to recall the order if its application under the scheme was rejected by the revenue.

The Tribunal held that the CIT(A) erred by not granting an opportunity of hearing to the assessee before dismissing the appeal as time-barred, thus breaching principles of natural justice. The Tribunal set aside the CIT(A)'s order and remanded the case back.

The Tribunal condoned the delay in filing the appeal, acknowledging the genuine cause shown by the assessee due to the death of the original assessee. The Tribunal set aside the impugned order and remanded the case back to the CIT(A) for a fresh hearing on a denovo basis, providing one last opportunity to the legal heir to present the case.

The Tribunal held that the CIT(Appeals) erred in dismissing the appeal on technical grounds without considering the merits. The obligation to pay advance tax is triggered only when there is a taxable income, which the assessee claimed was not the case.

The Tribunal allowed the withdrawal of the appeal as the assessee did not wish to pursue it, having applied under the 'Direct Tax Vivad se Vishwas Yojana, 2024'. The Tribunal noted that the assessee could seek recall if their application under the scheme was rejected.

The Tribunal held that the assessee failed to establish the source of cash deposits. The AO's addition of the unexplained cash deposits as income was upheld.

The Tribunal held that the AO's order was cryptic and non-speaking, showing a total non-application of mind to the applicability of Section 14A. Therefore, the PCIT was justified in remanding the matter for re-examination of this issue.

The Tribunal held that the reopening of assessment was illegal and bad in law due to the lack of proper reasons to believe and application of mind by the AO. Consequently, the reassessment proceedings were quashed. Even on merits, the Tribunal deleted the disallowance of purchases, relying on the fact that part of the purchases from the same party were accepted and no rejection of books of accounts occurred.

The Tribunal set aside the impugned order passed by the CIT(A) and remanded the case back for a fresh decision on merits. The Tribunal found that the CIT(A) had not examined the merits of the case and that the assessee was not afforded an effective opportunity of hearing.

The Tribunal decided the issues as follows: Issue No. (i) (Jurisdiction): The Tribunal held that the PCIT(Central) did not have the jurisdiction to cancel the approval granted under Section 10(23C)(vi). The judicial view consistently supports this, and the revenue's reliance on a CBDT letter dated 19.01.2024 was not sufficient to establish jurisdiction. The Tribunal noted that a similar issue was pending before the Hon'ble High Court of Madhya Pradesh. Consequently, the Tribunal quashed the impugned order passed by the PCIT(Central) on this ground. The Tribunal accepted the assessee's alternative proposal to keep this issue open undecided, directing the AO to take up the matter after the High Court's decision, if warranted, and in conformity with it. Issue No. (ii) (Reference under Section 143(3)): The Tribunal decided this issue in favour of the assessee, quashing the impugned order. The reasoning is implicitly linked to the jurisdictional issue, as a defective reference would render subsequent proceedings without jurisdiction. Issue No. (iii) (Applicability of 15th Proviso): The Tribunal decided this issue in favour of the assessee, quashing the impugned order. The reasoning is that the 15th Proviso to Section 10(23C) was introduced by the Finance Act, 2022, effective from 01.04.2022, and therefore, it was not applicable to the assessment years prior to AY 2022-23 for which the approval was cancelled. Issue No. (iv) (Impact of alleged violations): The Tribunal agreed with the assessee's submission that the issues raised regarding alleged violations (rent and salary payments) would be considerable for assessment purposes but were not required for the adjudication of the present appeal concerning the cancellation of approval. Therefore, the Tribunal refrained from making any adjudication on this ground in the present appeal. Operative Directions: The Tribunal quashed the impugned order on grounds of jurisdiction and applicability of the 15th Proviso. The issue of jurisdiction was left open to be decided after the Hon'ble High Court's decision. The alleged violations were not adjudicated in the present appeal.

The Tribunal, in view of the submissions of both the assessee and the revenue, deemed it fit to remand the matter back to the file of the Assessing Officer for adjudication afresh. The Tribunal noted that the assessee had not made any representation to the AO during the assessment proceedings but submitted explanations and documents for the first time before the CIT(A). Although the CIT(A) forwarded these to the AO for a remand report, and the AO submitted adverse comments, the assessee failed to respond to the CIT(A)'s notices seeking a reply to the remand report. The revenue's Senior DR suggested restoring the matter to the AO for proper examination and adjudication, to which the assessee's AR had no objection. Therefore, the appeal was allowed for statistical purposes, with directions for the AO to give the assessee an opportunity of hearing and pass an appropriate order uninfluenced by the earlier order. The assessee was directed to ensure participation and avoid unnecessary adjournments.

The Tribunal condoned the delay of 190 days in filing the appeal, finding that the assessee had a sufficient cause for the delay due to notices being sent to an incorrect email address. The Tribunal relied on Section 253(5) of the Act and the principle of substantial justice over technical considerations, as laid down by the Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others. The Tribunal also agreed to the joint request of both parties to remand the matter back to the CIT(A) for fresh adjudication on merits. The CIT(A) was directed to provide the assessee with an opportunity of hearing and to pass an appropriate order. The assessee was cautioned against seeking unnecessary adjournments. The appeal was allowed for statistical purposes.

The Tribunal held that the first appeal filed by the assessee before the CIT(A) was valid. The reasoning was based on the assessee's submission and the agreement of the Revenue's representative. The Tribunal noted that the assessment order was passed on 23.03.2016 and served on 02.04.2016. The assessee filed a physical appeal on 25.04.2016 and subsequently e-filed it on 13.06.2016. The Tribunal acknowledged CBDT Circular No. 20/2016, which mandated e-filing of first appeals from 01.03.2016 and extended the deadline to 15.06.2016 to address system issues. Since the assessee's e-filing on 13.06.2016 was before the extended deadline of 15.06.2016, the appeal was considered to be filed within the permitted time. The CIT(A) was directed to treat the appeal as valid and adjudicate it on merits. The matter was restored to the file of the CIT(A) for this purpose. No issue was expressly left undecided.

The Tribunal observed that the CIT(A) decided the appeal ex-parte without the assessee making submissions, despite opportunities given over several years and a delay due to the pandemic. Considering principles of natural justice, the matter was remanded.

The Tribunal allowed the assessee's request to withdraw the appeal, noting that the departmental representative did not object. The assessee was also granted the liberty to recall the order if the scheme application was rejected.

The Tribunal held that since the contingent liability was not debited to the assessee's Profit and Loss account but was merely disclosed in the notes to accounts and the audit report, its disallowance by the CPC was not sustainable.

The Tribunal, considering the assessee's submissions about mental depression, medical complications, and loss of email password, and in the interest of justice, decided to remand the case back to the AO. Both parties agreed to this course of action.

The Tribunal observed that the CIT(A) dismissed the appeal based on the assessee's repeated adjournment requests, which constituted non-prosecution. Upholding the principle of natural justice, the Tribunal decided to remand the case back to the CIT(A) for fresh adjudication, instructing the CIT(A) to provide a proper opportunity of hearing and directing the assessee not to seek unnecessary adjournments.

The Tribunal held that the delay in filing the appeal was inordinate, arising from negligence and lack of due diligence. The reasons provided in the affidavit were found to be insufficient and factually incorrect.

The Tribunal held that the Principal CIT (Central) did not have the jurisdiction to cancel the registration granted under Section 12AA/12A. The power to grant and cancel such registrations vests with the 'Prescribed Authority', which in this case was the CIT (Exemption), as per CBDT notifications. The transfer of the case for assessment purposes did not automatically transfer the power to cancel registration.

The Tribunal held that the invocation of Section 263 was not expressly decided as an issue, but the appeal was partly allowed on other grounds. Regarding the capital gains, the Tribunal found that the land sold in FY 2013-14 was situated in the village of Hukmakhedi, which was not part of the Indore municipal corporation on the date of sale. The land was located outside eight km from municipal limits with a population of 2500, as per the Gram Panchayat certificate. Therefore, it was rural agricultural land and not a capital asset. The addition of Rs. 39.83 lakhs on account of capital gains was deleted, and this ground of appeal was allowed. Concerning the addition of Rs. 20 lakhs under Section 68, the Tribunal noted that the AO's notice for personal appearance was issued with a short time gap of four days, and the order was passed within seven days, violating principles of natural justice. Proper opportunity was not granted to the assessee and the creditor. Therefore, this ground was set aside to the jurisdictional AO for fresh consideration after affording a proper and reasonable opportunity of being heard. The Tribunal expressly left undecided the legality of the Section 263 invocation, as the appeal was decided on merits of other grounds.

The Tribunal condoned the delay and held that for the assessment year in question, the annual receipts of each educational institution should be considered separately for exemption under Section 10(23C)(iiiad). The disallowance made by the Assessing Officer was therefore incorrect.

The Tribunal held that the assessee should be given one last opportunity to explain the delay of 1222 days in filing the first appeal before the CIT(A). The assessee was allowed to file a condonation of delay application which would be heard and decided on merits.

The Tribunal held that the impugned assessment order was passed under Section 144 of the Act due to non-compliance by the assessee. However, the assessee submitted 12 new documents before the Tribunal that were not produced before the AO or CIT(A). Therefore, the Tribunal set aside the order and remanded the matter back to the AO for a de novo assessment, considering all the material.

The Tribunal allowed the assessee's request to withdraw the appeal, noting that the departmental representative did not oppose it. The Tribunal also clarified that the assessee can file a recall application if their scheme application is rejected.

The tribunal found that the reasons recorded for issuing the notice under Section 148 were based on unverified information from the department's database. The Assessing Officer did not conduct any verification from the bank before forming the belief that income had escaped assessment.

The Tribunal held that the CIT(A)'s order was in violation of the principles of natural justice as no opportunity of hearing was afforded to the assessee. The Tribunal also noted that the appeal was not disposed of on merits as required by law.

The Tribunal held that the CIT(A) erred in passing an ex-parte order without considering the assessee's request for adjournment due to old documents. The order was set aside, and the case was remanded to the CIT(A) for a fresh decision on merits after providing an opportunity to the assessee.

The Tribunal observed that the assessee did not provide credible evidence to establish that the sold lands were agricultural and thus not capital assets. The original cost of acquisition was also missing. Therefore, the matter was remanded for fresh consideration.

The Tribunal allowed the withdrawal of the appeal. It noted that the assessee has the liberty to recall the order if their application under the scheme is rejected by the revenue.

The Tribunal noted that the assessee wished to withdraw the appeal and the Revenue had no objection. Consequently, the Tribunal allowed the withdrawal and dismissed the appeal.

The Tribunal allowed the assessee's request to withdraw the appeal. The appeal was accordingly dismissed as withdrawn, based on the consent of both parties.

The Tribunal held that the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, is not sustainable in law. The reasoning was based on the fact that the show-cause notices issued by the Assessing Officer for initiating penalty proceedings were vague and did not specify the exact charge against the assessee, i.e., whether it was for concealment of income or furnishing of inaccurate particulars. This lack of specificity was found to be in violation of the principles of natural justice. The Tribunal relied heavily on the decisions of the Karnataka High Court in CIT vs. Manjunatha Cotton Ginning Factory and CIT vs. SSA's Emerald Meadows, both of which were upheld by the Supreme Court. These judgments established that a defective show-cause notice, which fails to specify the grounds for penalty, renders the penalty imposed bad-in-law. Consequently, the Tribunal allowed the appeals of the assessee and set aside the orders of penalty. The Tribunal also noted that no substantial question of law arose in these appeals. The appeals of the assessee were allowed.

The Tribunal allowed the assessee's request to withdraw the appeal, noting that the revenue did not object. The assessee was allowed to withdraw the appeal as per the scheme.

The Tribunal allowed the assessee's request to withdraw the appeal, noting that the department did not object. The appeal was dismissed as withdrawn.

The Tribunal held that the penalty levied under Section 271(1)(c) was not sustainable because the penalty show-cause notices were vague and did not specify the grounds for imposing the penalty, thus violating the principles of natural justice.

The Tribunal held that the penalty levied under Section 271(1)(c) was not sustainable because the penalty show-cause notices were vague and did not specify the grounds for imposing the penalty, thus violating the principles of natural justice.

The assessee's authorized representative requested to withdraw the appeals, stating that the assessee has opted for the "Vivad se Vishwas Scheme, 2024." The departmental representative did not object to this request. The Tribunal allowed the withdrawal of the appeals, dismissing them as such, and clarified that the assessee remains free to file a recall application if their Vivad se Vishwas application is rejected by the revenue.

The Tribunal set aside the order of the CIT(A) and remanded the case back for a denovo hearing. The CIT(A) was directed to provide the assessee an opportunity of hearing on the issue of delay and pass an appropriate order. The Tribunal made no observations on the merits of the case.

The Tribunal held that the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, is not sustainable in law. The reasoning was based on the fact that the show-cause notices issued by the Assessing Officer for initiating penalty proceedings were vague and did not specify the exact charge against the assessee, i.e., whether it was for concealment of income or furnishing of inaccurate particulars. This lack of specificity was found to be in violation of the principles of natural justice. The Tribunal relied heavily on the decisions of the Karnataka High Court in CIT vs. Manjunatha Cotton Ginning Factory and CIT vs. SSA's Emerald Meadows, both of which were upheld by the Supreme Court. These judgments established that a defective show-cause notice, which fails to specify the grounds for penalty, renders the penalty imposed bad-in-law. Consequently, the Tribunal allowed the appeals of the assessee and set aside the orders of penalty. The Tribunal also noted that no substantial question of law arose in these appeals. The appeals of the assessee were allowed.

The Tribunal held that the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, is not sustainable in law. The reasoning was based on the fact that the show-cause notices issued by the Assessing Officer for initiating penalty proceedings were vague and did not specify the exact charge against the assessee, i.e., whether it was for concealment of income or furnishing of inaccurate particulars. This lack of specificity was found to be in violation of the principles of natural justice. The Tribunal relied heavily on the decisions of the Karnataka High Court in CIT vs. Manjunatha Cotton Ginning Factory and CIT vs. SSA's Emerald Meadows, both of which were upheld by the Supreme Court. These judgments established that a defective show-cause notice, which fails to specify the grounds for penalty, renders the penalty imposed bad-in-law. Consequently, the Tribunal allowed the appeals of the assessee and set aside the orders of penalty. The Tribunal also noted that no substantial question of law arose in these appeals. The appeals of the assessee were allowed.