ITAT Jaipur Judgments — January 2024

The Tribunal held that the assessee's application for registration under section 12AB was rejected on grounds of non-registration with the RPT Act and genuineness of activities. The approval under section 80G was rejected primarily because registration under section 12AB was a prerequisite and the application for permanent registration was filed with a delay.

The CIT(A) confirmed the disallowance made by the AO. However, the Tribunal noted that the CIT(A) had deleted a portion of the addition due to a mistake in DLC valuation. The Tribunal directed the AO to verify the DLC rate and calculate the correct value of the property, stating that the department cannot take advantage of a computational mistake by the stamp duty authority.

The CIT(A) erred in not condoning the delay and dismissing the appeal on admission stage without considering the merits. The assessee contended that the tax was deducted and deposited in time, and any delay in filing TDS statements was a venial breach without loss of revenue. The assessee also argued that Section 234E was applicable only from July 1, 2012, and late fees could not be recovered if not collected at the time of delivering TDS statements.

The Tribunal noted that the assessee had raised several grounds of appeal, including jurisdictional issues, procedural lapses in reopening the assessment, and the denial of capital loss. The Tribunal found that the assessee was deprived of an opportunity to substantiate its case before the AO and that the CIT(A) had decided the appeal based on available records. The Tribunal, considering the facts and circumstances, felt that the appeal should be restored to the file of the AO to decide afresh.

The Tribunal condoned the delay of 1288 days in filing the appeal, considering that the assessee was prevented by sufficient cause, as notices were not properly served. However, due to the ex-parte nature of the assessment order and lack of representation on merit before the CIT(A), the issue was set aside to the Assessing Officer for a fresh decision.

The assessee failed to file returns and respond to statutory notices from both the AO and the CIT(A). The CIT(A) dismissed the appeal ex-parte. The Tribunal observed the assessee's lethargic approach but, considering the assessee's plea for an opportunity to present arguments and evidence, decided to restore the matter to the AO.

The Tribunal held that the income offered on estimation of profit from the short stock does not fall within the definition of 'undisclosed income' as contemplated in Section 271AAB of the Income Tax Act. Therefore, the penalty levied cannot be sustained.

The Tribunal held that the AO's action in reopening the assessment was in accordance with the law, as there were sufficient grounds to believe that income had escaped assessment. However, the Tribunal allowed the appeal on Ground No. 2, stating that the denial of additional evidence by the CIT(A) was not justified. It also allowed Ground No. 3 regarding the addition of Rs. 35,36,100/-, deleting the addition entirely. Ground No. 4 concerning cash deposits was partly allowed, sustaining an addition of Rs. 2,00,000/- out of Rs. 5,00,000/-.

The Tribunal held that the procedure laid down for reference to a Valuation Officer under Section 142A r.w.s Section 55A of the Income Tax Act was not followed. The reference was made to a private registered valuer during the search, without a fresh reference to a Valuation Officer. The addition was made solely on the basis of this private valuer's report, without any corroborative evidence or incriminating material. The Tribunal also noted that the report was prepared in a single day, raising doubts about its thoroughness.

The Tribunal noted that the assessee, a firm run by two lady entrepreneurs, one facing medical issues, had multiple opportunities to present its case but failed to comply. The expenses were not properly substantiated, and virtual hearings were missed. However, considering it was the first year of operation and the assessee claimed to be deprived of justice due to non-examination of facts by the CIT(A), the matter was remanded back.

The Tribunal held that the assessee had provided sufficient evidence, including confirmations and PAN details of the individuals who had repaid the advances. The AO and CIT(A) had failed to rebut this evidence and had not issued summons to the individuals for further verification, which could have been done under sections 133(6) and 131 of the Income Tax Act. The Tribunal found that the addition was based on surmises and conjectures.

The Tribunal noted that the CIT(E)'s reasons for rejection were not sufficient based on the facts. The assessee's activities were found to be focused on the development of the Bhiwadi area, and any profit generated was considered incidental to its primary objective of public utility. The Tribunal relied on various judicial precedents, including Supreme Court judgments concerning statutory authorities, to support its decision.

The tribunal noted that the appeal was dismissed by the CIT(A) for non-prosecution. The assessee's AR submitted that due to the illness of the assessee's husband, the assessee could not appear. The tribunal, considering these reasons, decided to give one more opportunity to the assessee to present evidence and arguments.

The Tribunal noted that the CIT(E) rejected the application primarily on grounds of absence of dissolution clause, genuineness of activities, and commercial objects. The Tribunal found that the issues raised by the CIT(E) might be curable if the assessee is given another opportunity.

The Tribunal held that the reassessment proceedings were bad in law as the reasons for reopening were not provided to the assessee. Relying on the judgment of the Supreme Court in GKN Driveshafts (India) Ltd. vs. ITO, the Tribunal quashed the reassessment order. Furthermore, the Tribunal admitted additional evidence for AY 2017-18 and directed the AO to compute the income based on verified turnover at 8% of total turnover.

The Tribunal held that the AO had wrongly made the addition by invoking Section 68 as the books of accounts were rejected under Section 145(3). It was further held that once books of accounts are rejected, Section 68 cannot be invoked, and the addition was liable to be deleted. The appeal was allowed.

The Tribunal noted that the CIT(A) had elaborated on the issues and found no infirmity in the CIT(A)'s order. Therefore, the grounds raised by the Revenue regarding the additions made under Section 43CA and for unexplained capital were dismissed.

The Tribunal noted that the appeal was dismissed by the CIT(A) without affording the assessee an opportunity of being heard. The assessee's primary contention is that the transfer of disputed rights in the immovable property does not constitute a transfer for capital gains tax purposes because the cost of acquisition is indeterminate. The Tribunal found that the assessee was deprived of justice due to non-receipt of hearing notices by the CIT(A).

The Tribunal held that the assessee had provided sufficient evidence to explain the cash deposits as proceeds from cash sales of his business. The purchases were vouched, sales were supported, and VAT returns were consistent with accounting records. The AO's addition was based on suspicion rather than concrete findings.

The Tribunal condoned the delay of one day in filing the appeal. The Tribunal noted that the assessee's representative was absent during the hearing and no submissions or evidence were produced. However, considering the assessee is a small private individual, the Tribunal decided to remand the matter back to the AO for a fresh decision on merits after affording proper opportunity of hearing.

The Tribunal noted that the source of cash deposit of Rs. 9,85,000/- was not satisfactorily explained by the assessee. However, considering the assessee is a small person working privately and the previous disallowance of expenses was deleted by the CIT(A), the bench decided to hear the appeal on merit.

The Tribunal noted that the assessee did not appear or file replies during the assessment proceedings, leading to an ex-parte assessment. Similarly, the appeal was dismissed by the CIT(A) for non-prosecution. While the assessee claimed denial of natural justice, the Tribunal found that the assessee failed to provide proper explanation and documentary evidence. However, to provide an opportunity, the matter was restored to the file of the AO.