ITAT Kolkata Judgments — November 2024

The Tribunal held that the assessment orders passed under Section 153A/144 of the Income Tax Act, 1961, for the assessment years under consideration are invalid and null and void for not obtaining the prior approval of the Joint Commissioner as required under Section 153D of the Act. The Tribunal relied on the manual of Office Procedure issued by the CBDT and the decision of the Orissa High Court in ACIT vs. Serajuddin & Ors., which held that the approval obtained under Section 153D must be mentioned in the assessment order, failing which the order would be invalid. The Tribunal noted that the requirement of prior approval under Section 153D is a mandatory requirement, not merely procedural. Consequently, the assessment orders were quashed. As the primary issue regarding the validity of the assessment orders was decided in favour of the assessee, other issues concerning additions/disallowances became academic and did not require adjudication. All appeals were allowed.

The Tribunal held that the assessee's case is covered by a Calcutta High Court judgment which stated that withdrawal of approval with retrospective effect is bad and does not affect the assessee's right to deduction if the donation was genuine. Therefore, the disallowance made by the AO and confirmed by the CIT(A) was deleted.

The Tribunal held that the addition under Section 50C was unwarranted due to a marginal difference (2.7%) between sale consideration and stamp duty value, relying on judicial precedents. It also allowed the Section 54F deduction, considering the two flats as a single unit and acknowledging substantive investment and partial deposit in CGAS.

The Tribunal held that the assessment orders passed under Section 153A/144 of the Income Tax Act, 1961, for the assessment years under consideration are invalid and null and void for not obtaining the prior approval of the Joint Commissioner as required under Section 153D of the Act. The Tribunal relied on the manual of Office Procedure issued by the CBDT and the decision of the Orissa High Court in ACIT vs. Serajuddin & Ors., which held that the approval obtained under Section 153D must be mentioned in the assessment order, failing which the order would be invalid. The Tribunal noted that the requirement of prior approval under Section 153D is a mandatory requirement, not merely procedural. Consequently, the assessment orders were quashed. As the primary issue regarding the validity of the assessment orders was decided in favour of the assessee, other issues concerning additions/disallowances became academic and did not require adjudication. All appeals were allowed.

The Tribunal held that the assessment orders passed under Section 153A/144 of the Income Tax Act, 1961, for the assessment years under consideration are invalid and null and void for not obtaining the prior approval of the Joint Commissioner as required under Section 153D of the Act. The Tribunal relied on the manual of Office Procedure issued by the CBDT and the decision of the Orissa High Court in ACIT vs. Serajuddin & Ors., which held that the approval obtained under Section 153D must be mentioned in the assessment order, failing which the order would be invalid. The Tribunal noted that the requirement of prior approval under Section 153D is a mandatory requirement, not merely procedural. Consequently, the assessment orders were quashed. As the primary issue regarding the validity of the assessment orders was decided in favour of the assessee, other issues concerning additions/disallowances became academic and did not require adjudication. All appeals were allowed.

The Tribunal held that the appeal filed by the Revenue is dismissed. The Tribunal noted that it is an admitted fact that no incriminating documents were found during the search pertaining to the assessee for the relevant assessment year. The additions were made based on statements recorded under Section 132(4)/131 of the Act. The Tribunal relied on the verdict of the Hon'ble Apex Court in the case of Abhisar Buildwell (P.) Ltd., which held that in the absence of any incriminating material unearthed during the search, the AO cannot assess or reassess income in respect of completed/unabated assessments. The Tribunal found that the CIT(A) had considered the facts of the case and the judgment of the Hon'ble Apex Court before allowing the assessee's appeal. Therefore, the Tribunal found no merit in the Revenue's appeal and no material to interfere with the order of the CIT(A). No issue was expressly left undecided.

The Tribunal held that the assessment orders passed under Section 153A/144 of the Income Tax Act, 1961, for the assessment years under consideration are invalid and null and void for not obtaining the prior approval of the Joint Commissioner as required under Section 153D of the Act. The Tribunal relied on the manual of Office Procedure issued by the CBDT and the decision of the Orissa High Court in ACIT vs. Serajuddin & Ors., which held that the approval obtained under Section 153D must be mentioned in the assessment order, failing which the order would be invalid. The Tribunal noted that the requirement of prior approval under Section 153D is a mandatory requirement, not merely procedural. Consequently, the assessment orders were quashed. As the primary issue regarding the validity of the assessment orders was decided in favour of the assessee, other issues concerning additions/disallowances became academic and did not require adjudication. All appeals were allowed.

The Tribunal held that the AO failed to record the necessary satisfaction under Section 14A(2) before invoking Rule 8D, which is a mandatory prerequisite. Consequently, the disallowance made under Section 14A was deleted.

For AY 2012-2013, the Tribunal found merit in the assessee's contention that the income was disclosed under different heads ('salary' and 'income from other sources') in the section 153A return, even if not under 'business income'. The Tribunal held that if the income was indeed declared under these heads, no addition should be made, as it would lead to double taxation. Consequently, the order of the CIT(Appeals) was set aside, and the issue was restored to the Assessing Officer for verification. The ratio is that income disclosed under different heads in a section 153A return should not be re-added as business income if it leads to double taxation. The operative direction is to verify and frame the assessment accordingly. For AY 2013-2014, the Tribunal held that the addition of Rs. 25,00,000/- was made in an unabated assessment year without any incriminating material found during the search. The addition was solely based on documents seized during a survey at the premises of a third party, which cannot be treated as incriminating material found during the search. The Tribunal relied on the Supreme Court judgment in Pr. CIT, Central -vs.- Abhisar Buildwell (P) Ltd. The addition was deemed to be without jurisdiction and unsustainable. The operative direction is to delete the additions.

The Tribunal held that the assessment orders passed under Section 153A/144 of the Income Tax Act, 1961, for the assessment years under consideration are invalid and null and void for not obtaining the prior approval of the Joint Commissioner as required under Section 153D of the Act. The Tribunal relied on the manual of Office Procedure issued by the CBDT and the decision of the Orissa High Court in ACIT vs. Serajuddin & Ors., which held that the approval obtained under Section 153D must be mentioned in the assessment order, failing which the order would be invalid. The Tribunal noted that the requirement of prior approval under Section 153D is a mandatory requirement, not merely procedural. Consequently, the assessment orders were quashed. As the primary issue regarding the validity of the assessment orders was decided in favour of the assessee, other issues concerning additions/disallowances became academic and did not require adjudication. All appeals were allowed.

The Tribunal held that the appeal filed by the Revenue was contrary to the policy decision of the Department as per the CBDT circular. Therefore, the appeal was dismissed in limine.

The Tribunal condoned the delay in filing the appeal. However, it noted that the appeal was not maintainable as per CBDT Instruction No. 9 of 2024 due to the low tax effect.

The Tribunal found that the assessee provided sufficient documentary evidence, including bank statements and contract notes, to establish the genuineness of the share transactions. The Tribunal concluded that the AO and CIT(A) failed to discard these evidences and allowed the appeal.

The Tribunal held that the penalty proceedings were initiated for concealment of income but confirmed by the CIT(A) for furnishing inaccurate particulars of income, without a fresh show cause notice. Citing judicial pronouncements, the Tribunal found the penalty initiation and confirmation to be against the law.

The tribunal held that the CIT(A) is obligated to decide the appeal on merits and cannot dismiss it for non-prosecution. The CIT(A) must pass a speaking order addressing all grounds raised by the assessee.

The Tribunal held that the assessment orders passed under Section 153A/144 of the Income Tax Act, 1961, for the assessment years under consideration are invalid and null and void for not obtaining the prior approval of the Joint Commissioner as required under Section 153D of the Act. The Tribunal relied on the manual of Office Procedure issued by the CBDT and the decision of the Orissa High Court in ACIT vs. Serajuddin & Ors., which held that the approval obtained under Section 153D must be mentioned in the assessment order, failing which the order would be invalid. The Tribunal noted that the requirement of prior approval under Section 153D is a mandatory requirement, not merely procedural. Consequently, the assessment orders were quashed. As the primary issue regarding the validity of the assessment orders was decided in favour of the assessee, other issues concerning additions/disallowances became academic and did not require adjudication. All appeals were allowed.

The Tribunal held that the notice issued under Section 143(2) was not in compliance with the mandatory CBDT instructions, rendering the assessment invalid. Consequently, the appeal was allowed on this ground.

For AY 2012-2013, the Tribunal found merit in the assessee's contention that the income was disclosed under different heads ('salary' and 'income from other sources') in the section 153A return, even if not under 'business income'. The Tribunal held that if the income was indeed declared under these heads, no addition should be made, as it would lead to double taxation. Consequently, the order of the CIT(Appeals) was set aside, and the issue was restored to the Assessing Officer for verification. The ratio is that income disclosed under different heads in a section 153A return should not be re-added as business income if it leads to double taxation. The operative direction is to verify and frame the assessment accordingly. For AY 2013-2014, the Tribunal held that the addition of Rs. 25,00,000/- was made in an unabated assessment year without any incriminating material found during the search. The addition was solely based on documents seized during a survey at the premises of a third party, which cannot be treated as incriminating material found during the search. The Tribunal relied on the Supreme Court judgment in Pr. CIT, Central -vs.- Abhisar Buildwell (P) Ltd. The addition was deemed to be without jurisdiction and unsustainable. The operative direction is to delete the additions.

The Tribunal noted that the issue of defective notice for penalty was decided by the jurisdictional High Court. However, since the assessee did not properly represent before the CIT(A) and the issue of notice defect was not raised, the matter was set aside to the CIT(A) for de novo adjudication.

The Tribunal held that the assessee is a registered cooperative society whose primary business is providing banking and credit facilities to its members, making it eligible for deduction under Section 80P. The Tribunal found no infirmity in the CIT(A)'s order allowing the appeal.

The Tribunal held that the levy of fee under Section 234E and consequential interest for the period prior to June 1, 2015, is not sustainable. The amendments to Section 200A enabling such computation were effective only from June 1, 2015.

The Tribunal noted that the issue of defective notice for penalty was decided by the jurisdictional High Court. However, since the assessee did not properly represent before the CIT(A) and the issue of notice defect was not raised, the matter was set aside to the CIT(A) for de novo adjudication.

The Tribunal held that a debatable claim for deduction under Section 54F cannot be disallowed in a Section 143(1) intimation, as such proceedings are limited to arithmetical errors or incorrect claims based on information in the return. The order of the lower authorities was set aside.

The Tribunal held that notional interest cannot be added to income in the absence of any real income having accrued or any corresponding liability on the part of the borrowers to pay interest. The AO lacked material to prove receipt of interest income, and the addition was based on presumption.

The Tribunal held that the assessment orders passed under Section 153A/144 of the Income Tax Act, 1961, for the assessment years under consideration are invalid and null and void for not obtaining the prior approval of the Joint Commissioner as required under Section 153D of the Act. The Tribunal relied on the manual of Office Procedure issued by the CBDT and the decision of the Orissa High Court in ACIT vs. Serajuddin & Ors., which held that the approval obtained under Section 153D must be mentioned in the assessment order, failing which the order would be invalid. The Tribunal noted that the requirement of prior approval under Section 153D is a mandatory requirement, not merely procedural. Consequently, the assessment orders were quashed. As the primary issue regarding the validity of the assessment orders was decided in favour of the assessee, other issues concerning additions/disallowances became academic and did not require adjudication. All appeals were allowed.

The Tribunal held that the 8% net profit rate was excessive given the assessee's past profit margins and reduced it to 5%. It also found that cash deposits were explained by cinema ticket sales and directed the deletion of the addition under Section 69A.

The Tribunal held that since the AO did not make any additions regarding the specific items of escaped income that formed the basis for reopening the assessment, the entire reopening proceedings and the consequent assessment were bad in law and without jurisdiction. The foundation of the proceedings was demolished.

The Tribunal found that the appeal did not fall under any exceptions to the low tax effect policy. The tax effect was below the revised monetary limit for appeals. Therefore, the appeal was dismissed in limine.

The Tribunal dismissed the appeal of the Revenue. This was based on a CBDT instruction not to challenge orders where the tax effect is below a certain threshold, unless specific exceptions apply.

The Tribunal found that the appeal did not fall under any exceptions to the low tax effect policy. The tax effect was below the revised monetary limit for appeals. Therefore, the appeal was dismissed in limine.

The Tribunal dismissed the Revenue's appeal as not maintainable due to the low tax effect, following CBDT instructions. Consequently, the assessee's cross-objection was also dismissed as infructuous.

The Tribunal recalled its previous order and decided to re-examine ground No.3. Following a co-ordinate bench's decision and a High Court ruling, the Tribunal allowed ground No.3, finding the supervision charges to be an allowable business expenditure.

The Tribunal found that the CIT(Appeals) dismissed the appeal ex-parte without providing sufficient opportunity to the assessee. Therefore, the matter was remitted back to the CIT(Appeals) for a fresh decision on merits.

The Tribunal, noting the assessee's non-appearance before lower authorities, decided to provide one more opportunity for the assessee to be heard. The matter was remitted back to the CIT(Appeals) for a fresh decision on merits.

The Tribunal held that the CIT(A) rightly treated the income as business income, and since the tax rate was the same for the relevant assessment year, there was no loss of revenue. The appeal was dismissed as not maintainable due to tax effect below the monetary threshold and not falling under exceptions in CBDT Circular No. 9/2024.

The Tribunal held that reopening the assessment beyond four years, after an assessment under Section 143(3), requires a specific finding that income escaped due to the assessee's failure to disclose material facts. Since this was not established, the reopening was deemed invalid.

The Tribunal dismissed the appeal of the Revenue due to the low tax effect, as per CBDT Instruction No. 9 of 2024. The Revenue can file a Miscellaneous Application for revival if facts are re-verified and the tax effect exceeds the threshold or falls under exceptions.

The Tribunal, while acknowledging the assessee's failure to appear before lower authorities, granted one more opportunity to meet the principles of natural justice. The matter was remitted back to the CIT(Appeals) for fresh examination and decision on merits.

The Tribunal noted the assessee's failure to adequately participate in earlier proceedings and granted an opportunity to present its case. The matter was remanded back to the CIT(A) for a fresh adjudication after allowing the assessee to submit evidence.

The Tribunal decided to remand the matter back to the CIT(Exemptions) to provide the assessee with another opportunity to present its case. The CIT(Exemptions) is expected to grant sufficient opportunity for the assessee to present its case.

The Tribunal decided to remand the matter back to the CIT(Exemptions) to provide the assessee with another opportunity to present its case. The CIT(Exemptions) is expected to grant sufficient opportunity for the assessee to present its case.

The Tribunal held that additional grounds of appeal can be raised at any appellate stage, citing the Supreme Court decisions in Jute Corporation of India Ltd. Vs CIT and National Thermal Power Co. Ltd v. CIT. The Tribunal found that the issue raised was a purely legal one, requiring no further factual verification. The undisputed facts were that the search under Section 132(1) was conducted on December 9, 2016, and the impugned assessment years were unabated and had attained finality. Crucially, there was no reference to any incriminating material found during the search that supported the additions made by the AO in the assessment framed under Section 153A read with Section 143(3). Consequently, the additions were considered without jurisdiction. The Tribunal relied on the Supreme Court's decision in PCIT v. Abhisar Buildwell P. Ltd. to hold that in cases of unabated and completed assessments on the date of search, no addition can be made in the absence of incriminating material. The Tribunal set aside the order of the CIT(A) and directed the AO to delete the additions. This decision was applied mutatis mutandis to the other appeals (IT(SS)A Nos. 176 to 178/KOL/2023).

The Tribunal held that additional grounds of appeal can be raised at any appellate stage, citing the Supreme Court decisions in Jute Corporation of India Ltd. Vs CIT and National Thermal Power Co. Ltd v. CIT. The Tribunal found that the issue raised was a purely legal one, requiring no further factual verification. The undisputed facts were that the search under Section 132(1) was conducted on December 9, 2016, and the impugned assessment years were unabated and had attained finality. Crucially, there was no reference to any incriminating material found during the search that supported the additions made by the AO in the assessment framed under Section 153A read with Section 143(3). Consequently, the additions were considered without jurisdiction. The Tribunal relied on the Supreme Court's decision in PCIT v. Abhisar Buildwell P. Ltd. to hold that in cases of unabated and completed assessments on the date of search, no addition can be made in the absence of incriminating material. The Tribunal set aside the order of the CIT(A) and directed the AO to delete the additions. This decision was applied mutatis mutandis to the other appeals (IT(SS)A Nos. 176 to 178/KOL/2023).

The Tribunal held that additional grounds of appeal can be raised at any appellate stage, citing the Supreme Court decisions in Jute Corporation of India Ltd. Vs CIT and National Thermal Power Co. Ltd v. CIT. The Tribunal found that the issue raised was a purely legal one, requiring no further factual verification. The undisputed facts were that the search under Section 132(1) was conducted on December 9, 2016, and the impugned assessment years were unabated and had attained finality. Crucially, there was no reference to any incriminating material found during the search that supported the additions made by the AO in the assessment framed under Section 153A read with Section 143(3). Consequently, the additions were considered without jurisdiction. The Tribunal relied on the Supreme Court's decision in PCIT v. Abhisar Buildwell P. Ltd. to hold that in cases of unabated and completed assessments on the date of search, no addition can be made in the absence of incriminating material. The Tribunal set aside the order of the CIT(A) and directed the AO to delete the additions. This decision was applied mutatis mutandis to the other appeals (IT(SS)A Nos. 176 to 178/KOL/2023).

The Tribunal held that Section 69C is for unexplained expenditure not recorded in books, and thus incorrectly applied to sales transactions. It directed that only a profit element (commission) on these accommodation sales should be added to the income.

The Tribunal held that additional grounds of appeal can be raised at any appellate stage, citing the Supreme Court decisions in Jute Corporation of India Ltd. Vs CIT and National Thermal Power Co. Ltd v. CIT. The Tribunal found that the issue raised was a purely legal one, requiring no further factual verification. The undisputed facts were that the search under Section 132(1) was conducted on December 9, 2016, and the impugned assessment years were unabated and had attained finality. Crucially, there was no reference to any incriminating material found during the search that supported the additions made by the AO in the assessment framed under Section 153A read with Section 143(3). Consequently, the additions were considered without jurisdiction. The Tribunal relied on the Supreme Court's decision in PCIT v. Abhisar Buildwell P. Ltd. to hold that in cases of unabated and completed assessments on the date of search, no addition can be made in the absence of incriminating material. The Tribunal set aside the order of the CIT(A) and directed the AO to delete the additions. This decision was applied mutatis mutandis to the other appeals (IT(SS)A Nos. 176 to 178/KOL/2023).

The Tribunal held that the interest income was not taxable in the hands of the assessee as it had already been assessed in the hands of the Netherlands entity. The mere crediting of the refund and interest to the assessee's bank account post-amalgamation did not determine the nature of the receipt.

The Tribunal held that the assessee had failed to provide sufficient documentary evidence to the AO and CIT(A) regarding the population criteria for its rural branches. However, the assessee has now submitted additional documents and therefore, the case is remitted back to the AO for fresh consideration.

The Tribunal condoned the delay in filing the appeal. It set aside the CIT(E)'s order and restored the case to the CIT(E)'s file, directing them to pass a fresh order after perusing the documents submitted by the assessee.

The Tribunal held that Section 69C is for unexplained expenditure not recorded in books, and thus incorrectly applied to sales transactions. It directed that only a profit element (commission) on these accommodation sales should be added to the income.