ITAT Jaipur Judgments — July 2024

The Tribunal held that the issue of allowing or disallowing deduction is a matter of discussion and legal interpretation, and thus it is a debatable issue. A debatable issue cannot be rectified under Section 154 of the Income Tax Act, as it requires more than an apparent mistake from the record. The AO's action of re-examining the deduction under the guise of rectification was not in accordance with the purpose of Section 154.

The Tribunal held that the cash deposits made during the demonetization period could not be classified as unexplained income, provided the assessee had sufficient cash balance in their books. The Assessing Officer also erred in reducing monthly cash expenses based solely on suspicion without any material evidence.

The High Court directed that the issue of unverifiable purchases be decided in favor of the department and remitted the matter of bogus purchases back to the AO for leading evidence. The ITAT, in subsequent proceedings, reduced the GP rate to 20% and directed that the trading addition would cover any leakage. The current appeal deals with additions made under Section 69C and the application of GP rate.

The Tribunal noted that in the appeal concerning Section 12AB, the assessee claimed to have submitted documents, but a technical glitch in the department's system prevented them from being uploaded. The Ld. DR had no objection to remanding the matter. For the Section 80G appeal, the assessee had filed a fresh application which was admitted, rendering the appeal infructuous.

The Tribunal noted that the rejection orders were based on the assessee's failure to provide certain documents and that the issue of payment to trustees under section 13(3) should be decided on merits. The Tribunal held that the matter should be restored to the CIT(E) for a fresh decision.

The Tribunal condoned the delay in filing the appeal due to the assessee being an aged widow and the communication issues with her advocate. The Tribunal noted that the CIT(A) had dismissed the appeal due to non-appearance, and that the assessee's submissions regarding commission income were not considered. The matter was remanded to the Assessing Officer.

The Tribunal held that the AO's action of issuing a notice under section 148 and the subsequent assessment proceedings were illegal due to procedural irregularities, specifically the lack of proper application of mind by the approving authority and the failure to cite specific legal provisions for the addition. Additionally, the Tribunal found that the sale of agriculture land was not taxable, and the AO had not properly considered the evidence presented.

The Tribunal noted that the appeals were filed with significant delays at both the CIT(A) level and before the Tribunal. While the CIT(A) dismissed the appeals for delay, the Tribunal, considering the circumstances like changing branch managers, the complexity of tax matters for bank officials, and the potential for substantial justice, condoned the delay. The Tribunal found that the assessee had provided reasons for the delay and relied on judicial precedents. The Tribunal then decided to remand the matter to the CIT(A) for adjudication on merits.

The Tribunal noted that the appeals before it and the appeals before the CIT(A) were filed with inordinate delay. The delay was attributed to administrative reasons and issues with email communication. The Tribunal, considering the facts and the principles of substantial justice, condoned the delay at both stages. The appeals were allowed for statistical purposes, remanding the matter to the AO for fresh adjudication.

The Tribunal noted that the appeals were filed with considerable delay at both the CIT(A) stage and the present Tribunal stage. The assessee cited reasons such as a change in Branch Managers, lack of proper tax consultants, and technical issues with email notifications (spam folder). The Tribunal, after considering the cited case laws and the explanation provided, condoned the delay in filing the appeals at both levels.

The tribunal noted that the assessee had filed multiple appeals concerning the same orders and the same assessment year. The tribunal observed that since the provisional registration and approval had already lapsed and been cancelled by the CIT(E), the appeals filed by the assessee were rendered infructuous.

The Tribunal held that the assessee had demonstrated sufficient cause for the delay in filing the appeals, attributing it to non-receipt of notices and lack of awareness of the proceedings. The CIT(A) was not justified in dismissing the appeals solely on the ground of limitation.

The Tribunal noted that the appellant had not been registered under the Rajasthan Public Trust Act, 1959, which is a prerequisite for registration under section 12AB. While an application for registration under the RPT Act was pending, the appellant had also provided incorrect information regarding salary payments to a member. The Tribunal decided to remand the matter to the CIT(E) for fresh consideration.

The Tribunal noted that the assessee, a bank, faced challenges due to the transferable nature of its branch managers and the lack of a dedicated tax consultant, leading to delays in filing appeals at both the CIT(A) and Tribunal levels. The Tribunal, considering the principles of substantial justice and citing various judicial precedents, condoned the delays.

The CIT(A) dismissed the appeals solely on the grounds of delay without adjudicating on the merits. The Tribunal found that the assessee demonstrated sufficient cause for the delay in filing the appeals.

The Tribunal noted that the appeals filed before it and the CIT(A) were delayed. The assessee cited reasons such as changing branch managers, lack of a tax consultant, and technical issues with email leading to non-receipt of notices. The Tribunal found the explanation for the delay to be acceptable, citing a liberal approach to substantial justice, and condoned the delay.

The Tribunal held that the reopening of assessment beyond four years was invalid as the AO failed to record a finding that the assessee did not make a true and full disclosure of material facts necessary for assessment. The CIT(A)'s order was thus sustained.

The Tribunal noted that the appellant had applied for registration under the Rajasthan Public Trust Act and proceedings were ongoing. The Tribunal also observed that the issues of non-charitable activities and non-genuineness of activities were related. It was held that the matter should be remanded to the CIT(E) for a fresh decision after providing an opportunity to the appellant to submit relevant documents.

The tribunal noted that the assessee failed to appear and that their provisional registration had lapsed. Consequently, the appeals were deemed infructuous and dismissed.

The Tribunal found that the defects pointed out by the CIT(A) were not substantial, especially if the hardcopy of the appeal file was perused. The Tribunal also noted that the principles of natural justice were violated as the assessee was not given a sufficient opportunity to be heard. Therefore, the Tribunal set aside the order and remanded the matter back to the CIT(A) for a fresh decision.

The Bench noted that the reason provided for the delay in filing the appeal, which involved legal advice and technical glitches, lacked merit and was dismissed. Subsequently, the assessee's authorized representative applied for the withdrawal of the appeal, to which the DR had no objection.

The Appellate Tribunal held that the penalty order was rightly set aside by the Learned CIT(A) because the claim for deductions under section 54B of the Act was allowed by the Appellate Tribunal in a previous order dated 12.04.2019, which was subsequent to the penalty order dated 29.03.2019.

The Tribunal held that the assessee's AR admitted to inadvertent mistakes in the dates of the assessment order, penalty order, and their service. The Tribunal allowed the assessee to file rectified Form-35 before the CIT(A) and remanded the matter for decision on condonation of delay.

The tribunal acknowledged the admitted inadvertent mistakes in furnishing dates in Form-35 by the assessee. Considering these mistakes, the tribunal decided to remand the matters back to the CIT(A).

The Tribunal held that the addition of Rs. 17,63,000/- was made on the basis of a seized loose paper. However, the assessee contended that these transactions were recorded in the cash book and capital account of the concern. The Tribunal found that most of the entries in the seized paper matched with the cash book and capital account, and therefore, the rejection of the cash book and the addition were incorrect. Ground No. 1 was allowed.

The Tribunal held that the Pr. CIT erred in invoking the provisions of Section 263 of the IT Act and passing the impugned order. The investment in agricultural land was made from own funds, and there was no proximate relation of borrowed funds with the investment. Therefore, no interest expenditure could be disallowed under Section 14A. The amendment to Section 14A by the Finance Act, 2022, is prospective and not applicable to the assessment year in question.

The Tribunal held that the PCIT's order under Section 263 was not in accordance with the law as the twin conditions of the order being erroneous and prejudicial to the interest of revenue were not satisfied. The Tribunal found that the AO had conducted proper inquiries and applied his mind to the facts of the case.

The Tribunal held that the interest income earned on market lending after declaration under IDS, where the principal amount was declared and tax paid, should not be treated as unexplained cash credit. The immunity granted under IDS for not disclosing the names of borrowers extends to the interest earned on those advances. Therefore, the AO's action of treating the interest income as unexplained and taxing it under Section 115BBE was incorrect.

The Tribunal noted that the assessee explained the source of the cash deposit as savings and withdrawals from a joint account. Although the assessee had not filed ITRs for previous years, the explanation provided was not controverted. Therefore, the addition made was not sustained.

The Tribunal found that while the notices were initially issued online, the assessee's subsequent compliance upon receiving a physical notice indicated a genuine difficulty in accessing online communications. The Tribunal considered the assessee's explanation of being technologically challenged and having a cardiac patient husband as reasonable grounds for non-compliance with the online notices.

The Tribunal held that the reassessment proceedings initiated under section 147 were not valid as they were based on the same material that was already examined during the original assessment, constituting a change of opinion. Therefore, the assessment order passed under section 147 was quashed.

The Tribunal held that the applicant trust was not granted a reasonable opportunity of being heard before the rejection of its application. The short time between the show cause notice and the hearing date was insufficient for the applicant to respond adequately. Therefore, the case was fit for remand.

The Tribunal condoned the delay in filing the appeal, noting that the assessee had sufficient cause. The assessee then sought to withdraw the appeal as a fresh application had been filed in view of a CBDT circular and was pending.

The Tribunal noted that the assessee had not been properly served with notices and had been deprived of a fair chance to present his case. The Tribunal set aside the issue to the file of the AO for a fresh adjudication, allowing the assessee a reasonable opportunity of being heard. The Tribunal directed the AO to consider the assessee's claim in accordance with the law.