ITAT Jaipur Judgments — August 2024

The Tribunal upheld the rejection of registration under Section 12AB, citing the mandatory compliance with other applicable laws as per Section 12AB(1) and Supreme Court judgments. The application for exemption under Section 80G was also rejected as a consequence of the Section 12AB rejection.

The Tribunal upheld the rejection of registration under Section 12AB, citing the mandatory compliance with other applicable laws as per Section 12AB(1) and Supreme Court judgments. The application for exemption under Section 80G was also rejected as a consequence of the Section 12AB rejection.

The Tribunal noted contradictory findings from lower authorities regarding the cost of acquisition and Section 54F deduction. It decided to remand the matter back to the AO to examine these issues on merits, allowing the assessee a chance to present their case.

The Tribunal found that the CIT(A) dismissed the appeal without properly considering the assessee's adjournment request and the reduction in the quantum addition. Therefore, the matter was remanded back to the CIT(A) for a fresh hearing on merits.

The Tribunal held that the CIT(E) should have considered the assessee's own objects and activities rather than solely relying on the nature of the donee trust. The matter was set aside for fresh consideration.

The Tribunal noted that the assessee, acting as a commission agent, is not required to disclose turnover on which TDS was deducted under section 194Q. The commission received should be considered for income tax purposes. The Tribunal relied on a CBDT circular and a coordinate bench decision in a similar case.

The Tribunal noted that the CIT(A) had not considered submissions made by the assessee late but before the final decision, and had also not dealt with the fact that the addition was made in the hands of the mother for the full consideration of property sold by the father. Therefore, the matter was remanded back to the AO.

The Tribunal held that the assessee had discharged the burden of proof by explaining the source of the cash deposit as earlier withdrawals. The Tribunal found that the department failed to provide evidence that the cash was utilized elsewhere, and therefore, the addition was not sustainable.

The Tribunal held that the PCIT had the correct jurisdiction to revise the order. It also found that the assessee failed to prove that the earlier agreement dated 10.04.2015 related to the same property as the agreement dated 31.01.2018, thus upholding the PCIT's view on Section 56(2)(x).

The Tribunal held that since the assessee offered the excess stock as 'other income' and not as part of business income, and its source was not explained, it should be treated as unexplained income under Section 68 and taxed under Section 115BBE. The Assessing Officer's order was deemed erroneous and prejudicial to revenue.

The Tribunal directed the AO to apply the average profit rate of the last three years, which was found to be 5.87%. Since the assessee's declared profit rate of 5.99% was higher, no further addition was made. The rejection of books of accounts was also set aside.

The Tribunal held that the PCIT's revisionary action was based on borrowed satisfaction from an audit objection, not independent application of mind. The Assessing Officer had taken a possible view, and the PCIT could not substitute his own view. Therefore, the revision order was quashed.

The Tribunal held that the CIT(E) should have considered the assessee's own objects and activities rather than solely relying on the nature of the donee trust. The matter was set aside for fresh consideration.

The Tribunal held that the AO had applied his mind to the issue and taken a plausible view after considering the assessee's explanation regarding Section 115BBE. Therefore, the PCIT could not revise the assessment order under Section 263.

The Tribunal held that since the assessee offered the excess stock as 'other income' and not as part of business income, and its source was not explained, it should be treated as unexplained income under Section 68 and taxed under Section 115BBE. The Assessing Officer's order was deemed erroneous and prejudicial to revenue.

The Tribunal noted that the reasons for rejection were curable defects. Considering the principles of natural justice and the fact that the assessee has applied for registration under the Rajasthan Public Trust Act, 1959, the Tribunal decided to give the assessee one more chance to rectify the defects.

The Tribunal noted contradictory findings between the CIT(A) orders for the individual and the HUF. Due to the non-submission of details by the assessee before the AO, the Tribunal decided to remand the matter back to the AO to examine the allowability of the cost of acquisition and Section 54F deduction.

The Tribunal allowed the assessee's appeal on merits, thereby rendering the technical grounds (Grounds 1, 1.1, and 3) unnecessary for adjudication. Regarding Ground 2, the Tribunal noted that the addition of Rs. 1,76,342/- was based on an Excel sheet found during the search of Maverick Group, which indicated a 2.4% adjustment. The AO treated this as interest paid out of undisclosed income. However, the Tribunal referred to a co-ordinate bench's decision in the case of M/s. Maverick Share Brokers Private Limited (ITA Nos. 38 to 41). In that decision, the Tribunal held that additions cannot be made solely based on a pen drive if its veracity is not established, statements of relevant persons are not recorded, and no substantive addition is made in the hands of the alleged recipient of additional interest. The co-ordinate bench vacated the protective addition because the interest actually paid was recorded in books, TDS was deducted, and the additional interest demanded was not paid. Applying this precedent, the Tribunal found no reason to sustain the addition of Rs. 1,76,342/- in the hands of the assessee, as the revenue failed to establish that this additional interest was actually paid and was out of undisclosed sources. The Tribunal noted that the interest actually paid was duly recorded in the parties' accounts, and there was no evidence of payment of additional interest.

The Tribunal held that the AO's failure to tax the excess cash under Section 115BBE, despite acknowledging it as income from undisclosed sources, made the assessment order prejudicial to the revenue. However, regarding the excess stock, the AO had applied his mind and taken a plausible view, thus Section 263 was not applicable.

The Tribunal held that the PCIT's invocation of Section 263 was unsustainable as the Assessing Officer had conducted necessary inquiries and the PCIT could not substitute his view. The assessment order was not found to be erroneous or prejudicial to revenue.

The Tribunal held that the AO had applied his mind to the issue and taken a plausible view after considering the assessee's explanation regarding Section 115BBE. Therefore, the PCIT could not revise the assessment order under Section 263.

The Tribunal condoned the 415-day delay in filing the appeal, acknowledging the assessee's severe illness as a sufficient cause. The matter was restored to the Assessing Officer for a fresh decision, allowing the assessee another opportunity to present their case, with the stipulation against frivolous adjournments.

The Tribunal condoned the delay in filing the appeals, noting that the assessee was awaiting the disposal of their rectification application before the CIT(A). The Tribunal found that the lower authorities had misconstrued facts regarding the tax liability and the filing of the return.

The Tribunal held that the assessee had substantiated the sale transactions with documentary evidence, including bank transactions, and the Assessing Officer had not rejected the assessee's books of accounts. Therefore, making a separate addition without rejecting the books was incorrect.

The tribunal found that the CIT(A) erred in not following binding CBDT circulars and apex court decisions, particularly regarding consistency and the application of Section 271(1)(c) with Explanation 5A. The order was passed in disregard of established legal principles.

The Tribunal held that while the assessee's explanation for non-compliance was not satisfactory, the repeated notices for the same information constituted a single default. The penalty provisions are deterrent in nature, not for revenue generation. Therefore, a penalty for each non-compliance was not justified.

The Tribunal held that the CIT(A) erred in dismissing the appeal on a technical ground when the facts and nature of disallowance were sufficiently detailed. The Tribunal also noted that the CIT(A) failed to follow previous ITAT and CIT(A) orders on similar facts for the assessee's own case.

The Tribunal held that statements recorded during a survey under Section 133A have no evidentiary value. The documents relied upon were found to be estimates of construction and alteration costs, not actual expenditure incurred by the company.

The Tribunal noted a delay of 2 days in filing the appeal, which was condoned based on the assessee's counsel's office mistake. The Tribunal allowed an additional ground challenging the validity of the notice under section 148, stating that the approval for such a notice was required from the Joint Commissioner, not the Principal Commissioner, making the notice void ab initio.

The Tribunal held that the addition of Rs. 1,50,000/- on account of unexplained cash credit under Section 68 of the Income Tax Act, 1961, was not justified. The Tribunal found that the assessee had indeed provided evidence, including the sale deed of ancestral property and bank statements, to explain the source of the cash deposit. The Tribunal was of the view that the AO had failed to properly appreciate the documentary evidence placed before him and had made the addition on a misappreciation of facts. The Tribunal reasoned that once the assessee demonstrates the source of the cash credit, the onus shifts to the revenue to prove otherwise, which was not done in this case. Therefore, the addition made by the AO and sustained by the CIT(A) was deleted. The operative direction was the deletion of the addition.

The Tribunal held that the assessee's income should be taxed on commission basis, not as business turnover. It directed the Assessing Officer to consider commission at a rate of Rs. 300 per lakh of turnover, consistent with a previous similar case.

The Tribunal condoned the delay in filing the appeals, noting that the assessee was awaiting the disposal of their rectification application before the CIT(A). The Tribunal found that the lower authorities had misconstrued facts regarding the tax liability and the filing of the return.

The Department's representative had no objection to the withdrawal request. Therefore, the Tribunal allowed the assessee to withdraw the appeal.

The tribunal noted that the assessment was done ex-parte and the CIT(A) dismissed the appeal considering the assessee's submission as an afterthought. The tribunal decided to remand the matter back to the AO for a decision based on evidence and submissions.

The CIT(A) allowed the appeal, holding that the additions made by the AO were without jurisdiction. The CIT(A) relied on various High Court and ITAT judgments, stating that additions in reassessment proceedings can only be made based on the formation of belief on which the case was reopened, not on other transactions. The Tribunal upheld the CIT(A)'s order.

The Tribunal admitted additional evidence and found that the reasons for rejection were curable. The assessee was granted one more opportunity to present their case before the CIT(E).

The Tribunal noted that the assessee had raised a specific ground regarding the dismissal of the appeal ex-parte and claimed to have furnished a reply with documentary evidence. The Tribunal found merit in the assessee's contention that the CIT(A) had not considered the submissions and evidence.

The Tribunal condoned the delay in filing the appeal, stating that the assessee should not suffer due to the mistake of their counsel. The Tribunal then proceeded to consider the grounds of appeal on merits.

The Tribunal held that the assessee is a cooperative society and not a Regional Rural Bank. It noted that Section 22 of the Regional Rural Bank Act, 1976, deems Regional Rural Banks as cooperative societies for the purposes of the Income Tax Act, 1961. However, the Tribunal clarified that CBDT Circular No. 6/2010, which states that Regional Rural Banks are not eligible for deduction under Section 80P from AY 2007-08 onwards, does not override the provisions of the Act. The Tribunal emphasized that the circular's withdrawal of exemption was specifically for Regional Rural Banks and not for cooperative societies. Since the assessee is a cooperative society, and it deposited its surplus funds with cooperative banks, it is entitled to the deduction under Section 80P(2)(d) on the interest earned. The Tribunal found no infirmity in the order of the CIT(A) and dismissed the revenue's appeals. The decision in ITA No. 645/JP/2023 was applied mutatis mutandis to ITA No. 646/JP/2023.

The Tribunal found merit in giving the assessee one more chance to contest the case before the AO for fresh adjudication. A cost of Rs. 2,000/- was imposed on the assessee for their negligent action.

The Tribunal condoned the delay in filing the appeal, finding sufficient cause. It also allowed the assessee to submit additional evidence, deeming it crucial for a just disposal of the case, considering the assessee's circumstances and the nature of the evidence.

The Tribunal found that the difference in commission was duly reconciled with purchases, sales, and service tax, and reflected in the audited accounts. Therefore, the addition made under Section 69C was not sustainable.

The Tribunal condoned the delay in filing the appeal before the CIT(A) considering the COVID-19 period and the explanation provided by the assessee's counsel. The matter was remanded back to the Assessing Officer for fresh adjudication.

The Tribunal condoned the delay in filing the appeal, admitted additional evidence, and restored the matter to the Assessing Officer for fresh adjudication, granting one last opportunity to the assessee.

The Tribunal held that the assessee was not liable to deduct TDS on interest payments made to the cooperative society. The Tribunal also noted that the AO had not established whether the payee had failed to pay tax directly, which is a prerequisite for deeming the deductor as an assessee in default.

The Tribunal held that income-tax is a levy on actual income, not hypothetical income, following the principle that only real income is taxable. Based on this, the Tribunal allowed the grounds of appeal.

The Tribunal, following its own coordinate bench's decision in the assessee's own case for a prior assessment year with identical facts, allowed the exemption. The Tribunal noted that the Revenue had not presented any contrary material or evidence to challenge the prior decision.

The Tribunal held that statements recorded during a survey under Section 133A of the Act have no evidentiary value as the officer is not authorized to administer an oath. Furthermore, the addition on account of trading was not supported by tangible material. The Tribunal relied on judicial precedents to support its decision.

The Tribunal held that the penalty notice issued under Section 274 read with Section 271 of the Act was defective as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Consequently, no penalty could be levied on the basis of such a defective notice.

The Tribunal held that the assessee is a cooperative society and not a Regional Rural Bank. It noted that Section 22 of the Regional Rural Bank Act, 1976, deems Regional Rural Banks as cooperative societies for the purposes of the Income Tax Act, 1961. However, the Tribunal clarified that CBDT Circular No. 6/2010, which states that Regional Rural Banks are not eligible for deduction under Section 80P from AY 2007-08 onwards, does not override the provisions of the Act. The Tribunal emphasized that the circular's withdrawal of exemption was specifically for Regional Rural Banks and not for cooperative societies. Since the assessee is a cooperative society, and it deposited its surplus funds with cooperative banks, it is entitled to the deduction under Section 80P(2)(d) on the interest earned. The Tribunal found no infirmity in the order of the CIT(A) and dismissed the revenue's appeals. The decision in ITA No. 645/JP/2023 was applied mutatis mutandis to ITA No. 646/JP/2023.