ITAT Mumbai Judgments — March 2025

The Tribunal held that merely making a claim in the return of income that is not sustainable under the Act does not amount to furnishing inaccurate particulars, and mere non-acceptance of a claim by the revenue cannot attract penalty. The Tribunal further held that the exceptions under Section 270A(6)(a) are applicable when the assessee offers a bonafide explanation and discloses all material facts, and that levying penalty under Section 270A is not automatic but discretionary.

The Tribunal set aside the order of the CIT(E) and directed the CIT(E) to decide the application afresh. The CIT(E) is to consider the correct Form 10AC and grant the assessee a reasonable opportunity of being heard.

The Tribunal held that the AO was incorrect in denying the carry forward of losses through rectification orders in subsequent years. The right to carry forward losses must be determined in the year the loss is incurred and allowed. The AO's denial based on rectification orders for later AYs was unsustainable.

The Tribunal held that the CIT(E) erred by not providing an opportunity of being heard. However, the Tribunal found that the amended objects of the trust, specifically clause 12, were not in consonance with the main purpose of granting exemption under Section 11(1)(a) of the Act, which could hinder final registration. The application for 80G was also rejected.

The Tribunal held that the CIT(A) was justified in admitting additional evidence and that the assessee had substantiated the genuineness of the advances. The Tribunal noted that these advances were part of the assessee's regular business, were subsequently converted into sales, and the sales were offered to tax. Therefore, making an addition for these advances would lead to double taxation.

The Tribunal held that the notice issued under section 148 was invalid because the prior approval was not obtained from the Principal Chief Commissioner as required by the amended provisions of section 151(ii) of the Act, given the notice was issued beyond three years from the end of the assessment year.

The Tribunal held that the denial of carry forward of losses by the AO based on rectification orders in subsequent assessment years was incorrect. The right to carry forward losses can only be denied in the year the loss is first incurred, and not in a later year through a rectification order.

The Tribunal noted that the assessee was denied an effective opportunity for cross-examination of parties whose statements were relied upon by the lower authorities. This violation of natural justice rendered the assessment order questionable. Therefore, the matter was remanded back to the AO.

The Tribunal allowed the assessee to withdraw the appeal, with liberty to recall the order if circumstances warrant. The grounds raised were dismissed as withdrawn.

The Tribunal held that the partial furnishing of reasons for reopening the assessment is fatal to the assessment order. The assessee's argument that complete reasons were not provided was accepted, leading to the quashing of the assessment order.

The Tribunal allowed the assessee to withdraw the appeal, with liberty to recall if circumstances warranted. Consequently, the grounds raised were dismissed as withdrawn, and the appeal was dismissed.

The Tribunal noted that lower authorities failed to consider CBDT Circular No. 3/2017, which allowed acceptance of cash deposits up to Rs. 2,50,000/- during demonetization without explanation or documentary evidence. Therefore, the assessee is entitled to relief up to Rs. 2,50,000/-.

The Tribunal found that the assessee had provided necessary documentation, but it appeared not to have been considered by the CIT(Exemption). Therefore, the Tribunal set aside the matter for fresh consideration by the CIT(Exemption) with an opportunity to the assessee.

The Tribunal held that the reassessment order and the additions made were unsustainable in law due to lack of nexus between the reasons recorded for reopening and the additions made. Furthermore, for other assessment years, additions were made based on Section 153A without any incriminating material found during the search.

The Tribunal held that the denial of carry forward of STCL by the AO through a rectification order in a subsequent year is not sustainable. The right to carry forward losses can only be denied in the year the loss is first incurred, and it must be allowed if validly carried forward in the earlier years. Therefore, the CIT(A)'s decision to allow the carry forward of losses was upheld.

The Tribunal noted that the assessment and appellate orders were passed ex-parte. While acknowledging the assessee's failure to appear, the Tribunal granted one more opportunity in the interest of natural justice, but imposed a cost of Rs. 10,000/- on the assessee. The issues were remitted to the CIT(A) for adjudication on merits.

The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was vague and did not specify the exact limb of charge. Relying on High Court decisions, the Tribunal found that such a notice, without striking off inapplicable portions, betrays a non-application of mind and is bad in law.

The Tribunal held that the assessee was denied the opportunity for effective cross-examination of key witnesses, violating principles of natural justice. The CIT(A)'s finding that corroboration with other evidence negated the need for cross-examination was deemed unjustifiable. Therefore, the case was remanded to the AO for fresh assessment.

The Tribunal held that the CIT(A)'s findings were objective and based on proper consideration of evidence. The Assessing Officer relied on generic information without substantiating the claim that the transactions were bogus or that the sale proceeds were unexplained cash credits.

The Tribunal held that the initial manual appeal was timely, and the subsequent e-filing was done without delay following the CIT(A)'s instruction. Therefore, the CIT(A) was not justified in dismissing the appeal on procedural grounds of delay without considering its merits. The Tribunal allowed the assessee's appeal, setting aside the CIT(A)'s order and directing the CIT(A) to decide the matter on its merits.

The tribunal noted that the CIT(A) order did not provide details of hearing or notices and that the email address for notices was incorrect. The tribunal set aside the CIT(A)'s order and restored the issues to the AO for fresh adjudication after granting an opportunity of being heard.

The tribunal noted that the order giving effect to the PCIT's order was acceptable to the assessee. Consequently, the assessee did not wish to proceed with the appeal, and the grounds raised were dismissed as withdrawn.

The Tribunal found that the AO did not conduct independent verification and relied solely on the Investigation Wing report. The CIT(A) also failed to adjudicate the issue properly. The matter was remitted to the AO for fresh adjudication.

The Tribunal condoned the delay of 475 days in filing the appeal, emphasizing the principle of advancing substantial justice over technicalities, citing various Supreme Court and High Court pronouncements. On the merits of the case, the Tribunal noted that lower authorities had not considered relevant CBDT circulars and directed the Assessing Officer to re-verify the demonetised cash deposits, requiring the assessee to furnish PAN and KYC details of all depositors.

The Tribunal held that the assessee failed to furnish a return of income without reasonable cause, attracting Explanation 3 to Section 271(1)(c), deeming it a case of concealment. The penalty initially levied was sustained to the extent of Rs. 6,53,800/-.

The Tribunal found it appropriate to dismiss the appeals as withdrawn, given the assessee's option to resolve the dispute under the VSV Scheme. The appeals were dismissed with liberty to restore if the scheme's application did not materialize.

The Tribunal condoned the 137-day delay in filing the appeals, citing the principle of substantial justice over technical considerations. The appeals were set aside and restored to the file of the CIT(A) for fresh adjudication on merits, with directions for the Assessee to cooperate and be vigilant in proceedings.

The Tribunal held that dismissing an appeal without deciding on merits, especially when the assessee failed to appear or comply, violates principles of natural justice. While the assessee has a duty to comply, the appellate authority must decide on merits. The order of CIT(A) was set aside for fresh adjudication.

The Tribunal held that the transactions were conducted on a regulated stock exchange through registered brokers, supported by documentary evidence, and routed through banking channels. The AO failed to provide cogent material to prove the transactions were sham or that the assessee was involved in price rigging.

The Tribunal dismissed grounds 1 to 5 of the Revenue's appeal as they did not arise from the lower authorities' orders. Regarding ground 6, concerning the disallowance under Section 14A, the Tribunal followed previous decisions of the co-ordinate bench and its own orders, holding that Section 14A is not applicable to insurance companies.

The Tribunal held that the assessee was not granted adequate opportunity to present their case before the CIT(A), and the CIT(A) merely reiterated the AO's findings without independent analysis. Therefore, the matter was set aside.

The Tribunal held that the notice issued under Section 148 was beyond the period of limitation as per the new regime and therefore invalid. Consequently, the assessment order passed under Section 147 was quashed.

The Tribunal found that the CIT(A) had not decided the ground of appeal concerning the levy of interest under Section 234B. Therefore, the matter was set aside to the CIT(A) for fresh adjudication on this specific issue.

The Tribunal held that the penalty was wrongly levied. It found that the appellant's mistake in revising the return was bonafide, as he relied on the TDS Traces portal and his tax representative's advice. Full taxes were paid on the additional income.

The Tribunal admitted additional evidence from the assessee regarding fixed deposits and the affidavit concerning cash deposits. It remanded the issues of unexplained fixed deposits (Section 69), unexplained cash deposits (Section 69A), and unexplained investment in the flat (Section 69) back to the Assessing Officer for fresh examination and verification, citing a lack of proper inquiry and cryptic order by the CIT(A) for the flat investment. The ground regarding the non-issue of notice under Section 143(2) was left open, and both appeals were allowed for statistical purposes.

The Ld. Commissioner of Income Tax (Appeals) deleted the addition, finding that the Assessee had prima facie discharged its onus under Section 68 by providing sufficient evidence that the AO failed to rebut. The Income Tax Appellate Tribunal upheld this decision, concluding that the Assessee proved the identity, creditworthiness, and genuineness of the transactions and that the addition was unsustainable.

The Tribunal held that Section 249(4)(b) is applicable only when there is an obligation to pay advance tax. Since the assessee had a net loss in the preceding financial year, there was no obligation to pay advance tax, and thus the CIT(A)'s dismissal on technical grounds was incorrect.

The Tribunal condoned the delay in filing the appeal, acknowledging the sufficient cause presented. Subsequently, based on the assessee's submission about the Vivad se Viswas Scheme, the appeal was dismissed as withdrawn.