ITAT Jaipur Judgments — October 2024

The Tribunal noted that the assessee had not complied with notices and failed to provide proper opportunity for hearing. The lower appellate authority dismissed the appeal ex-parte. The Tribunal, considering the grounds of appeal relating to natural justice and opportunity of hearing, set aside the order and restored the matter to the file of the CIT(A).

The Tribunal noted that the CIT(E) rejected the application solely on the ground of non-registration under the Rajasthan Public Trust Act, 1959, and that the assessee was granted registration under the said Act after the impugned order. The Tribunal also observed that the assessee claimed to be deprived of an adequate opportunity to be heard.

The Tribunal held that the reassessment proceedings were not sustainable in the eyes of the law. The reasons recorded by the AO were found to be not in accordance with law as they failed to demonstrate independent application of mind. The AO relied solely on information received from the investigation wing without independent verification.

The Tribunal noted that the assessee was ex-parte before both the AO and CIT(A). While acknowledging the assessee's lethargy, the Tribunal emphasized the need to decide the case on merits. Therefore, the matter was restored to the AO for a fresh decision with one more opportunity for hearing, subject to the assessee's cooperation.

The ITAT noted that the CIT(A) dismissed the appeal without considering the assessee's adjournment application and without providing an opportunity of hearing. The tribunal restored the matter to the file of the CIT(A) for adjudication on merits, emphasizing principles of natural justice.

The Tribunal held that while the assessee has a duty to appear, dismissing the appeal without deciding on merits is not appropriate. They emphasized the importance of natural justice and decided to restore the matter to the AO for fresh adjudication.

The Tribunal held that the additions for AY 2016-17 and 2017-18 concerning Hawala commission income were not sustainable due to lack of specific incriminating material for those periods. However, the addition for AY 2018-19 was partly upheld. The addition of Rs. 4 crores made on a protective basis was not sustained.

The Tribunal held that the denial of exemption based on a technical error (not selecting a section from a dropdown menu) was incorrect, especially when the expenditure details were available in the audit report and Form 10BB. The reasons provided by the CPC and the AO were contradictory and did not consider the factual aspects already on record.

The Tribunal partially allowed the appeal. It set aside the addition of Rs. 54,000/-, finding that the assessee's explanation regarding loan repayment to M/s Mohan Broker Agency was not adequately considered. However, the addition of Rs. 12,20,600/- for the purchase of immovable property was sustained as the source of funds remained unexplained.

The Tribunal held that the assessee failed to provide a satisfactory explanation for the source of investment in property and certain credits. The Assessing Officer's additions based on these unexplained amounts were challenged by the assessee, who argued she had sufficient income and savings. The Tribunal found that the assessee had indeed made payments for property and other transactions, but her capacity to do so from declared income and past savings was questionable.

The Tribunal admitted the appeal after considering the application for condonation of delay, noting the respondent did not object or provide contrary evidence. Subsequently, the appellant sought to withdraw the appeal.

The Tribunal noted that maintaining a day-to-day stock register for a restaurant business is practically impossible. The decline in GP rate was minimal and attributable to increased turnover. Relying on case laws, the Tribunal found that mere deficiency in books of accounts or rejection thereof does not automatically lead to additions.

The CIT(A) held that the assessee had already offered the gain to tax in the revised return voluntarily and much before the notice for reassessment. Therefore, the penalty under Section 271(1)(c) was not sustainable as there was no concealment of income or furnishing of inaccurate particulars.

The Tribunal held that the AO's investigation during the remand proceedings was misdirected as it focused on the genuineness of purchases rather than the nature and sources of the investment. The tribunal noted that the assessee had provided explanations and supporting documents for the sale proceeds of marble idols, which were the claimed source for the credit card payments. The CIT(A) had also considered these evidences while deleting a part of the addition.

The Tribunal held that the AO's action was based on a general report from the Investigation Wing without specific evidence linking the assessee's transactions. The assessee was a trader who incurred a genuine business loss, not a capital gain, and did not claim any capital loss in his ITR. The transactions were conducted through a recognized stock exchange, and the assessee provided supporting documents. The addition by the AO and confirmation by the CIT(A) lacked application of mind and proper appreciation of facts.

The Tribunal held that 'Dharmada' collected by the assessee from customers on sale of goods is not part of the sale consideration and therefore not taxable income. The Tribunal relied on various Supreme Court and High Court judgments which established that such amounts, even if collected compulsorily or not spent immediately, are held in trust for charitable purposes and do not form part of the business income.

The Tribunal condoned the delay in filing the appeal, noting the absence of mala fide intention and considering the CBDT's benevolent circular extending the time limit. The Tribunal also restored the application for deciding afresh on merits, giving another opportunity to the applicant to produce the required documents.

The Tribunal noted that the CIT(E) had rejected the application without providing adequate opportunity of hearing to the assessee. The Bench felt that the assessee should be given another chance to present their case before the CIT(E).

The tribunal held that the activities mentioned in objects 3 and 6 were not conducted by the trust and there was no evidence of profit-making. Furthermore, a subsequent CBDT circular extended the time for filing such applications, making the rejection on time-barred grounds unsustainable.

The Tribunal held that for a penalty under Section 271AAB to be leviable, the income must be 'undisclosed income' as defined in the Act, not merely a surrender made by the assessee. The surrender in this case was not substantiated by incriminating material and thus did not qualify as undisclosed income. The penalty was therefore deleted.

The Tribunal held that the first ground for rejection (commercial/business objects) was not supported by evidence, as the income and expenditure accounts did not depict such activities. The second ground for rejection (activities not in accordance with objects) was also found to be unsubstantiated, as pamphlets indicated external organization of events and no expenses were shown to be incurred by the trust. Regarding the section 80G rejection, the Tribunal noted a subsequent CBDT circular extending the due date for such applications.

The Tribunal held that the reassessment proceedings were initiated without a valid notice under section 148 of the Act and that the approval for reopening was not proper, lacking independent application of mind by the competent authority. The notice was also not served properly and was time-barred.

The Tribunal condoned the delay of 9 days in filing the appeal. The Tribunal held that the notice u/s 148 was not served within the prescribed time limit and lacked a PAN, making the subsequent assessment order illegal and liable to be quashed. Ground No. 3 was partly allowed, and Ground No. 4 was dismissed as general.

The Tribunal held that the service of notice provisions under section 282 r.w.r. 127 do not presume communication by placing notice on an e-portal. Following the principles of natural justice and a High Court judgment, the Tribunal found that the assessee could not be expected to constantly monitor the e-portal for notices. The CIT(A) erred in deciding the appeal ex-parte without granting adequate opportunity of hearing.

The Tribunal held that in the absence of registration u/s 12AA of the Income Tax Act, 1961, the entire income of the appellant trustee shall be subject to Normal Tax Rate as per the proviso to section 164(2) of the Act, as applicable in the case of an AOP. The impugned order passed by the CIT(A) was found to be infirmity and perverse.

The Tribunal held that the disallowance made under section 143(1) for delayed deposit of employee's contribution to PF and ESI is permissible. It followed the decisions of the Apex Court in Checkmate Services (P) Ltd. and the Bombay High Court in Roshan Korgaonkar.

The CIT(A) deleted the addition of Rs. 79,81,000/- as unexplained cash deposits, holding that the assessee had demonstrated the sources and provided supporting documents. The CIT(A) also deleted the disallowance of Rs. 6,48,20,559/- under Section 40A(3), finding that the cash deposited into the bank was not an expenditure and that the AO had not properly considered the evidence.

The Tribunal held that the entries in question were already considered and accepted by the firm in its settlement petition, which was subsequently confirmed by the ITSC. Since the revenue did not dispute the acceptance of these entries by the firm and ITSC, the protective additions made in the hands of the assessee could not be sustained.

The Tribunal observed that the assessee failed to provide documentary evidence to substantiate the source of the cash deposit. However, taking a liberal view, the assessee was granted an opportunity to be heard and furnish explanations before the CIT(A). The order of the CIT(A) was set aside, and the matter was remanded back for fresh adjudication.