ITAT Kolkata Judgments — May 2023

The Tribunal held that the PCIT's revisionary jurisdiction was invalidly exercised because an appeal on the same issue was pending before the Commissioner of Income Tax (Appeals). The Tribunal also noted that the AO had taken a plausible view, and the PCIT failed to demonstrate how the assessment was erroneous and prejudicial to revenue.

The Tribunal held that the reopening of assessment after four years was invalid because the AO failed to demonstrate any failure on the part of the assessee to disclose material facts. The reasons recorded by the AO did not satisfy the conditions laid down in the proviso to Section 147 of the Act.

The Tribunal remitted the issues regarding bonus and TDS credit back to the AO for verification. The disallowance for PF/ESI was upheld following a Supreme Court decision. The issue of business expenditure was also remitted to the AO for consideration.

The Tribunal held that the reopening of assessment after four years was invalid because the AO failed to demonstrate any failure on the part of the assessee to disclose material facts. The reasons recorded by the AO did not satisfy the conditions laid down in the proviso to Section 147 of the Act.

The Tribunal set aside the CIT(A)'s ex parte order and restored the appeal to the CIT(A)'s file for fresh adjudication. The assessee was directed to diligently participate in the proceedings.

The Tribunal dismissed the grounds challenging the validity of reassessment proceedings. However, on the merits of the addition, the matter was remanded back to the AO to allow the assessee an opportunity to substantiate its claim that the written-back liability was capital in nature.

The Tribunal treated the appeal as withdrawn/not pressed due to low tax effect, as per CBDT Circular No. 17/2019. Consequently, the appeal filed by the Revenue was dismissed.

The Tribunal held that the CIT(A) passed an ex-parte order without considering the merits of the case or the delay condonation application. Therefore, the matter was remanded back to the CIT(A) for fresh adjudication.

The Tribunal held that the penalty notice issued under Section 271AAB was defective as it did not specify the relevant clause under which the penalty was proposed. This substantive defect was considered incurable and rendered the penalty order invalid.

The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was invalid because it failed to specify the exact limb (concealment of income or furnishing inaccurate particulars) for which penalty proceedings were initiated. This failure violates the principles of natural justice.

The Tribunal held that the CIT(A) cannot enhance income by introducing new issues not germane to the assessment order passed by the Assessing Officer. Such an exercise of power is not tenable in law.

The Tribunal held that the Assessing Officer's conclusion was contradictory as directors had appeared and provided documents. The non-service of notices under Section 133(6) was not a sufficient ground to invoke Section 68 when the assessee had discharged its onus.

The Tribunal held that the AO failed to conduct proper inquiries and examine the evidence filed by the assessee. The Tribunal noted that the assessee had provided substantial evidence regarding the identity, creditworthiness, and genuineness of the transactions, which were not properly considered by the lower authorities.

The Tribunal followed the Supreme Court's decision in Chekmate Services Pvt. Ltd. vs. CIT, holding that deduction under Section 36(1)(va) for delayed deposit of employees' contribution to PF cannot be claimed even if deposited before the due date of filing the return.

The Tribunal found it proper to dismiss the current appeal. Liberty was granted to the assessee to file a fresh appeal before the appropriate Bench with a prayer for condonation of delay.

The Tribunal held that the CPC's adjustment was invalid as it failed to provide prior intimation to the assessee as required by the first proviso to Section 143(1)(a). The Tribunal also agreed that income should be understood in its commercial sense and that the delay in filing was covered by CBDT instructions and the amended Section 12(1)(ba).

The Tribunal held that the assessee was engaged in the development of an infrastructural facility and was eligible for deduction under Section 80-IA(4). The Tribunal followed its co-ordinate bench's decisions on similar facts.

The Tribunal held that the Rs. 15,00,000/- was a refund of share application money paid in the previous year and was adequately explained. It also held that no disallowance under Section 14A is warranted when no exempt income is earned.

The Tribunal held that the assessee had a reasonable cause for the failure to get his accounts audited, as he was under a bona fide belief that the provisions of Section 44AB were not applicable. Therefore, the penalty imposed under Section 271B was not sustainable.

The tribunal allowed the appeal regarding the disallowance under Section 43B, finding that the dues were paid before the due date of filing the return. However, it dismissed the appeal concerning the employees' PF contribution, holding it was not allowable under Section 36(1)(va) due to delayed deposit.

The tribunal allowed the appeal regarding the disallowance under Section 43B, finding that the dues were paid before the due date of filing the return. However, it dismissed the appeal concerning the employees' PF contribution, holding it was not allowable under Section 36(1)(va) due to delayed deposit.

The Tribunal held that the assessee's explanation for the delay was vague and did not demonstrate responsible conduct. The Tribunal found no reason to interfere with the CIT(A)'s decision to dismiss the appeals due to the inordinate delay.

The Tribunal held that disallowance of employee contributions to EPF/ESIC not deposited by the due date is confirmed, following the Supreme Court ruling in Checkmate Services Pvt. Ltd. However, the addition on account of 'claw back' was deleted as it represented a higher amount retained by the insurance company, implying a lesser expenditure debited by the assessee.

The Tribunal found that the CIT(A)'s basis for allowing the appeal was incorrect. The Tribunal held that the identity, creditworthiness, and genuineness of the sundry creditors, which were claimed as the source of investment, were not satisfactorily explained as required by Section 68 of the Act.

The Tribunal held that a debit balance cannot be treated as income under Section 41(1) of the Act. The addition made by the AO and confirmed by the CIT(A) was deleted due to this factual error.

The Tribunal held that after the amendment to Section 11(6), the assessee had not claimed the acquisition of property as an application of income. Therefore, the disallowance of depreciation was incorrect.

The Tribunal held that disallowance of employee contributions to EPF/ESIC not deposited by the due date is confirmed, following the Supreme Court ruling in Checkmate Services Pvt. Ltd. However, the addition on account of 'claw back' was deleted as it represented a higher amount retained by the insurance company, implying a lesser expenditure debited by the assessee.

The Tribunal held that the assessee's explanation for the delay was vague and did not demonstrate responsible conduct. The Tribunal found no reason to interfere with the CIT(A)'s decision to dismiss the appeals due to the inordinate delay.

The Tribunal allowed the appeals for statistical purposes. The Tribunal noted that the assessment orders were framed under section 143(3)/153A/144. While acknowledging that the assessment orders were ex-parte, the Tribunal found that the service of notices was not proper. The affidavit filed by the assessee's Authorized Representative indicated that e-mail IDs were registered on the Income Tax Portal, but no notices were ever issued or served on these registered e-mails after the initial physical notices in September 2019, which were replied to with requests for adjournment. Following the shift to electronic service of notices due to COVID-19, the Department failed to issue notices on the registered e-mail IDs. Consequently, the orders of the CIT(Appeals) were deemed unsustainable. To avoid multiplicity of proceedings and the need for a remand report from the Assessing Officer, the Tribunal set aside the impugned orders and remitted all proceedings back to the Assessing Officer for fresh adjudication in accordance with the law.

The Tribunal allowed the appeals for statistical purposes. The Tribunal noted that the assessment orders were framed under section 143(3)/153A/144. While acknowledging that the assessment orders were ex-parte, the Tribunal found that the service of notices was not proper. The affidavit filed by the assessee's Authorized Representative indicated that e-mail IDs were registered on the Income Tax Portal, but no notices were ever issued or served on these registered e-mails after the initial physical notices in September 2019, which were replied to with requests for adjournment. Following the shift to electronic service of notices due to COVID-19, the Department failed to issue notices on the registered e-mail IDs. Consequently, the orders of the CIT(Appeals) were deemed unsustainable. To avoid multiplicity of proceedings and the need for a remand report from the Assessing Officer, the Tribunal set aside the impugned orders and remitted all proceedings back to the Assessing Officer for fresh adjudication in accordance with the law.

The Tribunal allowed the appeals for statistical purposes. The Tribunal noted that the assessment orders were framed under section 143(3)/153A/144. While acknowledging that the assessment orders were ex-parte, the Tribunal found that the service of notices was not proper. The affidavit filed by the assessee's Authorized Representative indicated that e-mail IDs were registered on the Income Tax Portal, but no notices were ever issued or served on these registered e-mails after the initial physical notices in September 2019, which were replied to with requests for adjournment. Following the shift to electronic service of notices due to COVID-19, the Department failed to issue notices on the registered e-mail IDs. Consequently, the orders of the CIT(Appeals) were deemed unsustainable. To avoid multiplicity of proceedings and the need for a remand report from the Assessing Officer, the Tribunal set aside the impugned orders and remitted all proceedings back to the Assessing Officer for fresh adjudication in accordance with the law.

The Tribunal allowed the appeals for statistical purposes. The Tribunal noted that the assessment orders were framed under section 143(3)/153A/144. While acknowledging that the assessment orders were ex-parte, the Tribunal found that the service of notices was not proper. The affidavit filed by the assessee's Authorized Representative indicated that e-mail IDs were registered on the Income Tax Portal, but no notices were ever issued or served on these registered e-mails after the initial physical notices in September 2019, which were replied to with requests for adjournment. Following the shift to electronic service of notices due to COVID-19, the Department failed to issue notices on the registered e-mail IDs. Consequently, the orders of the CIT(Appeals) were deemed unsustainable. To avoid multiplicity of proceedings and the need for a remand report from the Assessing Officer, the Tribunal set aside the impugned orders and remitted all proceedings back to the Assessing Officer for fresh adjudication in accordance with the law.

The Tribunal allowed the appeals for statistical purposes. The Tribunal noted that the assessment orders were framed under section 143(3)/153A/144. While acknowledging that the assessment orders were ex-parte, the Tribunal found that the service of notices was not proper. The affidavit filed by the assessee's Authorized Representative indicated that e-mail IDs were registered on the Income Tax Portal, but no notices were ever issued or served on these registered e-mails after the initial physical notices in September 2019, which were replied to with requests for adjournment. Following the shift to electronic service of notices due to COVID-19, the Department failed to issue notices on the registered e-mail IDs. Consequently, the orders of the CIT(Appeals) were deemed unsustainable. To avoid multiplicity of proceedings and the need for a remand report from the Assessing Officer, the Tribunal set aside the impugned orders and remitted all proceedings back to the Assessing Officer for fresh adjudication in accordance with the law.

The Tribunal allowed the appeals for statistical purposes. The Tribunal noted that the assessment orders were framed under section 143(3)/153A/144. While acknowledging that the assessment orders were ex-parte, the Tribunal found that the service of notices was not proper. The affidavit filed by the assessee's Authorized Representative indicated that e-mail IDs were registered on the Income Tax Portal, but no notices were ever issued or served on these registered e-mails after the initial physical notices in September 2019, which were replied to with requests for adjournment. Following the shift to electronic service of notices due to COVID-19, the Department failed to issue notices on the registered e-mail IDs. Consequently, the orders of the CIT(Appeals) were deemed unsustainable. To avoid multiplicity of proceedings and the need for a remand report from the Assessing Officer, the Tribunal set aside the impugned orders and remitted all proceedings back to the Assessing Officer for fresh adjudication in accordance with the law.

The Tribunal allowed the appeals for statistical purposes. The Tribunal noted that the assessment orders were framed under section 143(3)/153A/144. While acknowledging that the assessment orders were ex-parte, the Tribunal found that the service of notices was not proper. The affidavit filed by the assessee's Authorized Representative indicated that e-mail IDs were registered on the Income Tax Portal, but no notices were ever issued or served on these registered e-mails after the initial physical notices in September 2019, which were replied to with requests for adjournment. Following the shift to electronic service of notices due to COVID-19, the Department failed to issue notices on the registered e-mail IDs. Consequently, the orders of the CIT(Appeals) were deemed unsustainable. To avoid multiplicity of proceedings and the need for a remand report from the Assessing Officer, the Tribunal set aside the impugned orders and remitted all proceedings back to the Assessing Officer for fresh adjudication in accordance with the law.

The Tribunal held that the CIT(A) order was not infirm, relying on Gujarat High Court's decision that filing Form 10B is directory. The Tribunal also noted that subsequent CBDT circulars allowed for condonation of delay up to three years.

The Tribunal held that since the issues of share capital, unsecured loans, and expenditure were subsequently examined and accepted by the Assessing Officer in later assessment proceedings based on documentary evidence, the additions made in the earlier ex parte assessment were not sustainable.

The tribunal dismissed the appeal as the assessee failed to prosecute it and did not respond to notices. The assessee also did not provide necessary documents like the assessment order.

The Tribunal held that the assessee had discharged its primary onus by filing all necessary details to explain the nature and source of the share application money. The mere non-appearance of the directors of the shareholder companies, when all other required documents were provided and independently replied to by the companies, could not be a sole ground to treat the share application money as unexplained.

The Tribunal condoned the delay in filing the appeal, noting the assessee's rural background and the COVID period. It held that the CIT(Appeals) failed to re-appreciate the evidence and that the deposit was likely from the husband's savings or past loans, not unexplained investment.

The Tribunal held that issuing notices and framing assessments in the name of a non-existent company constitutes a substantive illegality and goes to the root of the matter, rendering the assessment null and void. It is not a procedural or technical lapse that can be cured under section 292B of the Act. The Tribunal relied on the Supreme Court's decision in PCIT vs. Maruti Suzuki India Limited, which held that assessment orders in the name of non-existent entities must be quashed as this is a substantive illegality, not a procedural lapse. The participation of the assessee in the assessment proceedings does not cure this substantive illegality, as there is no estoppel against law. The Tribunal distinguished the Delhi High Court's decision in Sky Light Hospitality LLP by noting that the Supreme Court in Maruti Suzuki India Limited had discussed and distinguished that case. Consequently, the assessment orders were quashed, and the orders of the CIT(Appeals) were reversed. The legal ground raised by the assessees was allowed. Since the appeals were allowed on legal grounds, the grounds raised on merits were not decided.

The Tribunal held that issuing notices and framing assessments in the name of a non-existent company constitutes a substantive illegality and goes to the root of the matter, rendering the assessment null and void. It is not a procedural or technical lapse that can be cured under section 292B of the Act. The Tribunal relied on the Supreme Court's decision in PCIT vs. Maruti Suzuki India Limited, which held that assessment orders in the name of non-existent entities must be quashed as this is a substantive illegality, not a procedural lapse. The participation of the assessee in the assessment proceedings does not cure this substantive illegality, as there is no estoppel against law. The Tribunal distinguished the Delhi High Court's decision in Sky Light Hospitality LLP by noting that the Supreme Court in Maruti Suzuki India Limited had discussed and distinguished that case. Consequently, the assessment orders were quashed, and the orders of the CIT(Appeals) were reversed. The legal ground raised by the assessees was allowed. Since the appeals were allowed on legal grounds, the grounds raised on merits were not decided.

The Tribunal held that for unabated assessment years, additions can only be made on the basis of incriminating material seized during the course of a search and not otherwise. The Tribunal observed that the search action was conducted on February 3, 2017, and at that point, the assessment had attained finality in terms of Section 153A of the Act. The additions made by the AO were based on information gathered from the annual audited accounts and books of accounts of the assessee concerning unsecured loans and other items, which the Tribunal opined do not constitute incriminating material. The Tribunal found support for its view in several judicial precedents, including the Hon'ble Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. Consequently, the Tribunal held that the additions made by the AO were without valid jurisdiction. The appeals of the assessees were allowed, and the order of the CIT(Appeals) was set aside on this legal issue. The appeal filed by the Revenue was dismissed.

The Tribunal held that issuing notices and framing assessments in the name of a non-existent company constitutes a substantive illegality and goes to the root of the matter, rendering the assessment null and void. It is not a procedural or technical lapse that can be cured under section 292B of the Act. The Tribunal relied on the Supreme Court's decision in PCIT vs. Maruti Suzuki India Limited, which held that assessment orders in the name of non-existent entities must be quashed as this is a substantive illegality, not a procedural lapse. The participation of the assessee in the assessment proceedings does not cure this substantive illegality, as there is no estoppel against law. The Tribunal distinguished the Delhi High Court's decision in Sky Light Hospitality LLP by noting that the Supreme Court in Maruti Suzuki India Limited had discussed and distinguished that case. Consequently, the assessment orders were quashed, and the orders of the CIT(Appeals) were reversed. The legal ground raised by the assessees was allowed. Since the appeals were allowed on legal grounds, the grounds raised on merits were not decided.

The Tribunal held that for unabated assessment years, additions can only be made on the basis of incriminating material seized during the course of a search and not otherwise. The Tribunal observed that the search action was conducted on February 3, 2017, and at that point, the assessment had attained finality in terms of Section 153A of the Act. The additions made by the AO were based on information gathered from the annual audited accounts and books of accounts of the assessee concerning unsecured loans and other items, which the Tribunal opined do not constitute incriminating material. The Tribunal found support for its view in several judicial precedents, including the Hon'ble Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. Consequently, the Tribunal held that the additions made by the AO were without valid jurisdiction. The appeals of the assessees were allowed, and the order of the CIT(Appeals) was set aside on this legal issue. The appeal filed by the Revenue was dismissed.

The Tribunal held that for unabated assessment years, additions can only be made on the basis of incriminating material seized during the course of a search and not otherwise. The Tribunal observed that the search action was conducted on February 3, 2017, and at that point, the assessment had attained finality in terms of Section 153A of the Act. The additions made by the AO were based on information gathered from the annual audited accounts and books of accounts of the assessee concerning unsecured loans and other items, which the Tribunal opined do not constitute incriminating material. The Tribunal found support for its view in several judicial precedents, including the Hon'ble Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. Consequently, the Tribunal held that the additions made by the AO were without valid jurisdiction. The appeals of the assessees were allowed, and the order of the CIT(Appeals) was set aside on this legal issue. The appeal filed by the Revenue was dismissed.

The Tribunal held that for unabated assessment years, additions can only be made on the basis of incriminating material seized during the course of a search and not otherwise. The Tribunal observed that the search action was conducted on February 3, 2017, and at that point, the assessment had attained finality in terms of Section 153A of the Act. The additions made by the AO were based on information gathered from the annual audited accounts and books of accounts of the assessee concerning unsecured loans and other items, which the Tribunal opined do not constitute incriminating material. The Tribunal found support for its view in several judicial precedents, including the Hon'ble Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. Consequently, the Tribunal held that the additions made by the AO were without valid jurisdiction. The appeals of the assessees were allowed, and the order of the CIT(Appeals) was set aside on this legal issue. The appeal filed by the Revenue was dismissed.

The Tribunal held that for unabated assessment years, additions can only be made on the basis of incriminating material seized during the course of a search and not otherwise. The Tribunal observed that the search action was conducted on February 3, 2017, and at that point, the assessment had attained finality in terms of Section 153A of the Act. The additions made by the AO were based on information gathered from the annual audited accounts and books of accounts of the assessee concerning unsecured loans and other items, which the Tribunal opined do not constitute incriminating material. The Tribunal found support for its view in several judicial precedents, including the Hon'ble Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. Consequently, the Tribunal held that the additions made by the AO were without valid jurisdiction. The appeals of the assessees were allowed, and the order of the CIT(Appeals) was set aside on this legal issue. The appeal filed by the Revenue was dismissed.

The Tribunal held that for unabated assessment years, additions can only be made on the basis of incriminating material seized during the course of a search and not otherwise. The Tribunal observed that the search action was conducted on February 3, 2017, and at that point, the assessment had attained finality in terms of Section 153A of the Act. The additions made by the AO were based on information gathered from the annual audited accounts and books of accounts of the assessee concerning unsecured loans and other items, which the Tribunal opined do not constitute incriminating material. The Tribunal found support for its view in several judicial precedents, including the Hon'ble Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. Consequently, the Tribunal held that the additions made by the AO were without valid jurisdiction. The appeals of the assessees were allowed, and the order of the CIT(Appeals) was set aside on this legal issue. The appeal filed by the Revenue was dismissed.

The Tribunal held that for unabated assessment years, additions can only be made on the basis of incriminating material seized during the course of a search and not otherwise. The Tribunal observed that the search action was conducted on February 3, 2017, and at that point, the assessment had attained finality in terms of Section 153A of the Act. The additions made by the AO were based on information gathered from the annual audited accounts and books of accounts of the assessee concerning unsecured loans and other items, which the Tribunal opined do not constitute incriminating material. The Tribunal found support for its view in several judicial precedents, including the Hon'ble Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. Consequently, the Tribunal held that the additions made by the AO were without valid jurisdiction. The appeals of the assessees were allowed, and the order of the CIT(Appeals) was set aside on this legal issue. The appeal filed by the Revenue was dismissed.