ITAT Jaipur Judgments — June 2024

The tribunal condoned the delay in filing the appeals, finding merit in the assessee's submission regarding the illness of a trustee during the COVID period. The tribunal held that even if the 12A registration was granted subsequent to the assessment period, the benefit of Sections 11 and 12 should be allowed if the objects and activities of the trust remained the same and the application was filed with a bona fide intent. Relying on amended provisions and judicial precedents, the tribunal directed the AO to treat the assessee as registered for the relevant assessment years.

The Tribunal held that the CIT(TDS) order was passed against well-settled law. The Assessing Officer had conducted proper enquiry and verification before passing the original order. Therefore, the CIT(TDS) was not justified in setting aside the order solely based on a difference of opinion or by observing that proper enquiry was not made, especially when it was evident that enquiry was indeed conducted.

The tribunal held that the Ld. CIT(E)'s comments on the merits of the case after allowing the withdrawal of the application were against the principles of natural justice. Therefore, the matter was remanded back to the Ld. CIT(E) to be heard afresh.

The Tribunal held that the delay in filing the appeal was condoned due to sufficient cause, specifically the ill health and demise of a trustee during the COVID period. Regarding the substantive issue, the Tribunal noted that the assessee had eventually obtained Section 12A registration, albeit retrospectively, and that amendments to the law provided relief in such genuine hardship cases.

The Tribunal held that although registration under section 12A is a condition precedent for claiming benefits under sections 11 and 12, the benefit can be granted even if registration is obtained subsequent to the assessment, provided the trust's objects and activities remain the same. The recent amendments to the law also provide relief in genuine hardship cases. Therefore, the delay in obtaining registration was condoned, and the benefit of exemption was extended to the assessment year in question.

The Tribunal, after hearing both parties, noted that the assessee was not provided with adequate opportunity. The appeal was allowed for statistical purposes, restoring the matter to the CIT(E) for a fresh decision with one more opportunity to the assessee, subject to a cost of Rs. 3000/- to be deposited in the Prime Minister Relief Fund.

The Tribunal condoned the delay in filing the appeal, citing reasons like the trustee's age and illness during the COVID period. Regarding the substantive issue, the Tribunal acknowledged that while Section 12A registration is a prerequisite for exemption under Sections 11 and 12, recent amendments and judicial precedents allow for granting exemption even if registration is obtained retrospectively. The Tribunal directed the AO to treat the assessee as registered for the relevant year.

The CIT(A) dismissed the appeal ex-parte for non-prosecution, citing the assessee's failure to respond to hearing notices. The Tribunal noted that the quantum proceedings were set aside and to be framed afresh, rendering the penalty appeal infructuous.

The Tribunal held that the reopening of assessment after four years was not justified as the assessee had made a full and true disclosure of all material facts necessary for the original assessment. The revenue failed to demonstrate any non-disclosure by the assessee. The Tribunal also noted that similar issues had been decided in favour of the assessee by the ITAT in earlier years.

The Tribunal noted that the assessee had amended its trust deed to restrict activities to India and included an irrevocability clause. It also observed that the CIT(E) had not given sufficient opportunity for the assessee to prove the genuineness of its activities.

The Tribunal acknowledged the appellant's submission that it is a State Government undertaking and that the dismissal of appeals had significant consequences. While noting the initial claim of 'mistake' evolving into an admission of 'negligence', the Tribunal decided to grant one last opportunity for a hearing.

The tribunal noted that the claim of missed notices was raised for the first time in written submissions and not in the original appeals. Despite admitting negligence, the tribunal decided to allow one more opportunity for the appellant to be heard, considering it a state government undertaking.

The Tribunal noted that the appellant's sole argument was that certain notices were missed due to negligence. While acknowledging the appellant's status as a State government undertaking, the Tribunal found that the failure to respond to notices was admitted negligence. The Tribunal decided to restore the appeals to the CIT(APPEAL) for a fresh adjudication.

The Tribunal found that the appellant was not afforded a reasonable opportunity of being heard. The impugned order was set aside, and the matter was restored to the file of the CIT(A) for a fresh decision.

The Tribunal noted that the reason for non-response to notices was not initially pleaded in the memorandum of appeals, but was raised later. The Tribunal also observed that the email address for receiving notices was provided and acknowledged, and the responsibility to check emails lay with the concerned person. The appellant candidly admitted negligence.

The Tribunal noted that the appellant's argument of notices being missed was raised for the first time in written submissions and not in the original appeal memorandum. However, considering the appellant is a state undertaking and the potential impact of dismissal, the Tribunal decided to grant one last opportunity.

The Tribunal condoned the delay in filing the appeal subject to a cost of Rs. 1,000/-. The Tribunal observed that the CIT(A) had dismissed the appeal for non-prosecution and not on merits, and importantly, had not considered the remand report despite calling for it. Therefore, the impugned order was set aside.

The Tribunal held that the interest expenditure claimed for loans from Smt. Manbhar Devi and Shri Chirag Gupta was not disallowed on a notional basis without supporting reasons. The disallowance of notional interest on interest-free advances to employees and Govindi Devi Trust was also directed to be deleted. The appeal was allowed.

The Tribunal noted that the assessee was unable to provide complete reconciliation of the total quantum of crypto purchase and the amounts debited to the bank account. Due to technical latches and server issues with the cryptocurrency broker, the assessee was deprived of justice. The Tribunal decided to set aside the matter to the AO for fresh adjudication.

The Tribunal found that the CIT(A) did not specify the dates of the notices issued to the assessee and did not consider the grounds of appeal on merits. The Tribunal also noted that the Assessing Officer, while passing the section 154 order for AY 2014-15, may not have considered the effect of a previous Appellate Tribunal order.

The Tribunal held that the CIT(A) had dismissed the appeal solely due to the assessee's non-appearance despite notices, without properly adjudicating the grounds of appeal. The Tribunal also noted that the Assessing Officer's show cause notice for penalty did not specify whether the penalty was for concealment or furnishing inaccurate particulars.

The CIT(A) upheld the AO's order. The Tribunal noted that the AO did not refer the matter to the DVO for determination of FMV under section 50C(2) and that the capital gain on compulsory acquisition is exempt under section 10(37). The Tribunal also found issues with the calculation of capital gains and the denial of deduction under section 54F.

The Tribunal condoned a 5-day delay in filing the appeal. However, it noted the assessee's consistent failure to cooperate with the AO and CIT(A). The Tribunal decided to remand the matter back to the AO for fresh adjudication, granting the assessee a reasonable opportunity to present their case.

The Tribunal held that since the authorities below accepted a significant portion of the cash deposit (Rs. 37,74,000/-) as valid, it was difficult to accept their reasoning for deeming the remaining amount of Rs. 11,50,000/- as unexplained. The Tribunal found that the assessment order and impugned order were not justified in applying the 'Human Probability Test' to the remaining sum.

The Tribunal set aside the impugned order and remitted the matter back to the AO. The delay before the CIT(A) was condoned, and the AO was directed to reconsider the issues after providing an adequate opportunity of hearing to the assessee.

The Tribunal held that the Pr. CIT erred in exercising revisional jurisdiction under Section 263. The AO had conducted inquiries regarding the investment and the Section 54 claim, and based on the information available, took a plausible view. The Pr. CIT's conclusion that the AO had not made proper inquiries was not substantiated by material evidence. The Tribunal found that the conditions for invoking Section 263 were not fulfilled.

The Tribunal held that the CIT(A) erred in rejecting additional evidence and deciding the appeals without waiting for remand reports. This violated principles of natural justice.

The tribunal noted that separate appeals concerning the quantum proceedings for the same assessment years had already been set aside and restored to the Assessing Officer for fresh decision. Consequently, the penalty orders also deserve to be set aside for fresh consideration after affording the assessee a reasonable opportunity of being heard.

The Tribunal held that once the assessee explains the source of cash deposits as withdrawals from the same bank account, the onus shifts to the revenue authorities to prove otherwise. In this case, the revenue failed to provide any material evidence to disprove the assessee's explanation.

The Tribunal upheld the decision of the CIT(A) regarding the disallowance of excessive salary paid to trustees. While a 10% increase was allowed for AY 2015-16, a 14% increase was allowed for AY 2016-17. The total disallowance was restricted accordingly for both years. The tribunal found that the increased salaries were not in furtherance of the trust's objects.

The CIT(A) dismissed the assessee's appeal, finding no merit in the contention regarding jurisdiction and upholding the addition made by the AO. The ITAT noted that the assessee failed to adequately explain the source of cash deposits and withdrawals and that opportunities provided by the AO and CIT(A) were not fully utilized to substantiate the claims.

The Tribunal held that the CIT(A) was justified in restricting the disallowance of excessive salary paid to trustees. The department's appeal was dismissed, and the assessee's cross-objections were also dismissed.

The tribunal held that while some increase in the trustees' salaries might be justifiable considering the trust's receipts, the quantum of increase and the basis for it were not adequately explained by the assessee. The tribunal upheld the CIT(A)'s view that a 10% increase for AY 2015-16 and a 14% increase for AY 2016-17 were reasonable.

The ITAT noted that the assessee consistently denied any transactions with Shri Trilok Goel and provided bank statements and an affidavit to support this claim. The Tribunal found that the addition was made by the Revenue Authorities despite the assessee's detailed reply and supporting documents. The Bench observed that if the Department finds no evidence of dealing, the addition should be deleted.

The Tribunal noted that this was the second round of litigation and that the assessee had not appeared or provided any submissions or documents to support their grounds of appeal in either the CIT(A) stage or before the Tribunal. Therefore, in the absence of any material, the Tribunal had no alternative but to confirm the action of the CIT(A).

The Departmental Representative (DR) had no objection to the withdrawal of the appeal. Consequently, the Tribunal allowed the assessee to withdraw the appeal.

The Tribunal noted that the assessee had provided all necessary details and additional evidence during the appellate proceedings, which were admitted but not properly considered by the CIT(A). The Tribunal found that the rejection of books of accounts was not justified as there were no defects noted and the assessee had provided explanations for non-compliance. The AO's estimation of GP rate at 3% without basis was also questioned.