ITAT Jaipur Judgments — July 2023

The Tribunal condoned the delay in the assessee's appeal. It upheld the CIT(A)'s deletion of additions related to clandestine removal and initial investment, citing the setting aside of the Central Excise order. The Tribunal directed that the sustained addition be adjusted against the declared loss.

The Tribunal condoned the delay in the assessee's appeal. It upheld the CIT(A)'s deletion of additions related to clandestine removal and initial investment, citing the setting aside of the Central Excise order. The Tribunal directed that the sustained addition be adjusted against the declared loss.

The Tribunal restored the matter to the AO for adjudication on merits, allowing the assessee to present additional evidence. The CIT(A)'s ex-parte order was set aside.

The Income Tax Appellate Tribunal (ITAT) held that the PCIT failed to satisfy the twin conditions of the assessment order being erroneous and prejudicial to the interest of the revenue. The tribunal found that the AO had conducted due inquiry and the PCIT's allegations were not substantiated.

The Tribunal found that the lower authorities had not properly appreciated the evidence submitted by the assessee to explain the source of the cash deposits. The Tribunal noted that the AO's order lacked a reasoned finding for rejecting the assessee's explanation.

The Tribunal found that the assessee had sufficient withdrawals to justify the cash deposits, considering her past savings and income. The Tribunal also noted the assessee's severe health issues and financial hardship, which prevented proper compliance with lower authorities.

The Tribunal held that the requirement to file Form 67 before the due date for filing the return of income is directory and not mandatory, as Rule 128 does not prescribe any adverse consequences for delayed filing. Therefore, the assessee is eligible for FTC.

The Tribunal held that the CIT(E) erred in rejecting the application solely based on the format of fee details. The affiliation with a university and the nature of the objects were considered sufficient to establish the genuineness of the activities, especially when the students were from economically weaker sections.

The Tribunal noted the assessee's lethargic behavior and non-cooperation. While rejecting adjournment requests, the Tribunal restored the appeals to the AO for fresh adjudication, granting one more opportunity to the assessee.

The Tribunal held that the assessee failed to demonstrate sufficient cause for the inordinate delay in filing the appeal. The explanation provided was not considered a valid reason for condonation, as it did not show diligent efforts or a lack of bona fides. Therefore, the delay was not condoned.

The Tribunal held that the assessee's method of accounting, which involved making a provision for expected losses and then reversing it in the subsequent year, was consistently followed and neutralized the accounting impact. The AO had not controverted these arguments.

The Tribunal held that the disallowance of expenses related to an increase in authorized share capital, including ROC filing fees, is a debatable issue. Therefore, it cannot be rectified under Section 154, which is meant for mistakes apparent from the record.

The Tribunal held that while the certificate provided by the payee was not in the prescribed format, it contained all the required data. The disallowance would lead to double taxation, which is against the spirit of law. Therefore, the appeal was allowed for statistical purposes.

The Tribunal held that the penalty under Section 271AAB was not sustainable. The undisclosed income was found recorded in 'other documents' maintained in the normal course, and thus did not fall within the definition of 'undisclosed income' as per the section.

The Tribunal held that filing Form 10DA before the completion of assessment is sufficient for claiming deduction under Section 80JJAA, and the PCIT's order was not in accordance with Section 263 as the issues were already examined by the Assessing Officer.

The Tribunal held that the AO did not conduct independent investigation and relied solely on third-party statements. Given that the assessee's declared profit was higher than the industry norm and the books were not found defective, the addition was not justified.

The Tribunal noted that the Assessing Officer had followed the CIT(A)'s direction regarding rental income. However, for TDS credit, the matter was remanded to the Assessing Officer for fresh verification and allowance in accordance with the law.

The Tribunal held that the PCIT was justified in revising the assessment order. The assessee failed to establish the nature of sundry creditors versus unsecured loans, and the Assessing Officer did not adequately examine these discrepancies.

The Tribunal held that the CIT(A) lacked jurisdiction to pass a rectification order under Section 154 to initiate penalty proceedings under Section 270A when no proceedings were pending before them. Such an action was considered beyond the scope of rectification and an improper revision of the earlier appellate order.

The Tribunal held that the rectification order passed by the AO was bad in law as it was not a rectification of a 'mistake apparent from the records'. The excess stock was considered to be business income taxable under normal provisions, not under Section 115BBE.

The Tribunal found that the CIT(A)'s findings were contrary to the facts, as the AO had perused Form 10DB, contradicting the CIT(A)'s statement that it was not filed. Therefore, the penalty was deemed unfounded.

The Tribunal held that the notice issued under Section 153C was bad in law and the assessment order was void ab initio due to the absence of a valid satisfaction note and incriminating material. The Supreme Court's decision in DCIT vs. M/s. U.K. Paints (Overseas) Ltd. was relied upon.

The Tribunal held that no adjustment can be made under Section 143(1) without providing a prior intimation to the assessee. The Tribunal relied on Supreme Court and coordinate bench decisions emphasizing the mandatory nature of this procedural requirement.

The Tribunal held that while the assessee's income exceeded the basic exemption limit, the penalty under Section 271F was set aside considering the bona fide mistake and no loss to the revenue as TDS was already deducted.

The Tribunal held that the delay in filing the audit report (Form 10/10B) is a procedural lapse and does not warrant denial of exemption under Section 11, provided the report is available before the Assessing Officer or appellate authority. The Tribunal also found that the CIT(A) correctly followed judicial precedents regarding the specification of purposes for accumulation.

The Tribunal held that the addition made under Section 41(1) was not justified as the assessee had provided reconciliation and evidence of payment in a subsequent financial year. The lower authorities did not follow the directions of the ITAT to call for confirmation from the creditor.

The Tribunal upheld the orders of the CIT(E) as the assessee failed to provide any controverting documents or submissions. Consequently, both appeals filed by the assessee were dismissed.

The Tribunal found that the CIT(A) passed an ex-parte order due to non-submission of documents, depriving the assessee of a proper hearing. Therefore, the appeal was restored to the CIT(A) for a fresh hearing.

The Tribunal found that the CIT(E) rejected the application even when the assessee sought withdrawal. Relying on a High Court judgment regarding the dissolution clause, the Tribunal decided to give the assessee another opportunity.

The Tribunal held that the income surrendered on account of Long-Term Capital Gain does not fall under the definition of undisclosed income for penalty under Section 271AAB. However, cash found during the search is considered undisclosed income subject to penalty.

The Tribunal held that Section 56(2)(vii)(b) was not applicable for the assessment year 2012-13 as it was introduced later. It also noted that the AO did not invoke Section 68 and that the share premium is a capital receipt. Therefore, the addition made by the AO was not justified.

The Tribunal held that the assessee's claim for deduction under Section 54 was not a fresh claim but a correct claim in lieu of a wrongly claimed Section 54F. The Tribunal relied on judicial precedents and departmental circulars emphasizing liberal interpretation and assisting taxpayers. The Tribunal concurred with the CIT(A)'s decision to delete the addition.

The Tribunal held that the penalty under Section 271(1)(c) cannot be levied on income declared in a return filed under Section 153A, especially when the assessee has satisfied the conditions for immunity. The CIT(A)'s order deleting the penalty was upheld.

The Tribunal held that the penalty under Section 271(1)(c) cannot be levied on income declared in a return filed under Section 153A, especially when the assessee has satisfied the conditions for immunity. The CIT(A)'s order deleting the penalty was upheld.

The Tribunal held that the PCIT erred in assuming jurisdiction under Section 263. The issues raised by the PCIT regarding closing stock valuation and conversion of stock-in-trade to investment were found to be based on consistent methodology accepted in prior years and did not cause prejudice to revenue.

The Tribunal held that the assessment order passed under Section 143(3) read with Section 153C was bad in law due to non-issuance of a mandatory notice under Section 143(2) and also due to procedural irregularities in the approval under Section 153D. Consequently, the assessment order was quashed.

The Tribunal found that the CIT(A) had dismissed the assessee's appeal on technical grounds without considering the merits, especially in light of the COVID-19 pandemic. The Tribunal restored the matter to the CIT(A) for a decision on merits.

The Tribunal held that the CIT(A) failed to decide the appeal on merits and did not consider the evidence submitted by the assessee. The CIT(A) merely relied on the AO's order without providing a speaking order.

The Tribunal held that the initial penalty order dated 28.03.2016 had become infructuous because the original assessment order was set aside and a fresh assessment order was passed. Therefore, the CIT(A)'s order confirming the infructuous penalty order was upheld.

The Tribunal held that entries in seized documents representing commission sales, in the absence of real transactions, do not constitute undisclosed income as defined under Section 271AAB(1A). Therefore, the penalty levied under this section is not sustainable.

The Tribunal held that the entries representing commission sales, in the absence of real transactions, do not constitute 'undisclosed income' as defined in Section 271AAB(1A). Therefore, the penalty levied under this section is not sustainable.

The Tribunal held that the assessment order passed under Section 143(3) read with Section 153C was bad in law due to non-issuance of a mandatory notice under Section 143(2) and also due to procedural irregularities in the approval under Section 153D. Consequently, the assessment order was quashed.

The tribunal held that the disallowance of delayed employee contributions to PF/ESI is applicable even for intimation processed under Section 143(1), following the Supreme Court's decision in Checkmate Services Pvt. Ltd. The tribunal found that the adjustment made by the CPC was within its powers.

The Tribunal held that no disallowance under Section 14A is warranted if the investment is made from interest-free funds and no exempt income is earned. The Tribunal relied on Supreme Court decisions that presume investments are made from interest-free funds when they exceed such funds.

The Tribunal held that the disallowance for late deposit of employee's contribution to ESI/PF is valid, following the Supreme Court's decision in Checkmate Services Pvt. Ltd. The adjustment made under Section 143(1) was also considered within the AO's powers.

The Tribunal held that the Principal Commissioner of Income Tax (Pr. CIT) erred in assuming jurisdiction under Section 263 of the Income Tax Act, 1961. The Tribunal found that the Assessing Officer (AO) had conducted an enquiry during the assessment proceedings, as evidenced by the issuance of a detailed questionnaire under Section 142(1) and the assessee's subsequent reply. The assessment was completed in a 'faceless manner' by the NFAC, which involves multiple units and officers, suggesting a thorough application of mind rather than a lack of enquiry. The Tribunal relied on judicial precedents, including decisions of the Coordinate Bench, which state that an order cannot be considered erroneous merely because the Pr. CIT disagrees with the AO's conclusion, especially when two views are possible and the AO has taken one view that is sustainable in law. The Tribunal emphasized that the assessment order cannot be held erroneous solely on the allegation of inadequate enquiry unless there is an established case of total lack of enquiry. Therefore, the Pr. CIT's assumption of jurisdiction under Section 263 was quashed. The Tribunal clarified that its decision was restricted to the invocation of Section 263 and did not comment on the merits of any contemplated additions.