ITAT Mumbai Judgments — July 2025

The Tribunal held that payments made for domestic roaming charges and interconnect charges to Other Telecom Operators (OTOs) and Foreign Telecom Operators (FTOs) are not in the nature of royalty under Section 9(1)(vi) of the Act, nor are they fees for technical services under Section 194J. The Tribunal relied on the Hon'ble Apex Court's decision in Bharti Cellular Ltd. and the Karnataka High Court's decision in Vodafone Idea Ltd. vs. DCIT, which held that such services are automated, involve no human intervention, and are akin to standard telecommunication services. The Tribunal noted that the Hon'ble Apex Court had remanded the Bharti Cellular Ltd. issue for factual verification of human interface, but subsequent decisions, including the dismissal of SLP against the Karnataka High Court's order, favored the assessee's position. The Tribunal also referred to the Delhi High Court's decision in CIT vs. Tata Teleservices Limited, which held no TDS was required on interconnect user charges as they were not 'fees in technical service'. For payments to FTOs, the Tribunal, relying on its own orders in similar cases and the decision in ACIT vs. Viacom18 Media (P.) Ltd., held that such payments do not fall within the ambit of royalty under Section 9(1)(vi) or as per DTAAs. The Tribunal also noted that the amendment to Section 9(1)(vi) was not applicable retrospectively. The issue regarding the year-end provision for commission and Section 35DD deduction were not explicitly decided in the provided excerpt, with the Tribunal noting the CIT(A)'s directions for verification on these points. The operative direction was to allow the appeal on the grounds concerning roaming and interconnect charges.

The Tribunal held that the NPK Fertiliser Unit qualifies as a specified business under Section 35AD, and incidental use of assets does not violate the provisions. Minor stock differences were deemed not a basis for disallowance, and Section 14A cannot be applied when no exempt income is earned.

The Tribunal held that the NPK Fertiliser Unit qualifies as a "specified business" under Section 35AD(8)(c)(vii), and all conditions for claiming weighted deduction were satisfied. Incidental use of certain assets for another fertilizer unit within the same business does not violate Section 35AD(7A)/(7B). Furthermore, the condition of "claimed and allowed" in prior years was not met in AY 2017-18, making the disallowance under Section 35AD legally untenable. Therefore, the disallowance under Section 35AD was directed to be deleted. Regarding the stock difference for AY 2019-20, the Tribunal found that minor timing discrepancies between physical stock and book records are common and cannot be the basis for disallowance, especially when the difference was marginal (0.70% of total inventory) and plausibly explained as a timing issue. The AO's ad-hoc rate for computing disallowance was also deemed unjustified. Consequently, the disallowance made by the AO and the consequential adjustment under Section 115JB were deleted. The Tribunal noted that the issue regarding additions being beyond the scope of Section 153A due to lack of incriminating material was kept open as the additions were decided on merits. For AY 2019-20, the Tribunal confirmed the deletion of disallowance under Section 14A, holding that in the absence of any dividend income, the invocation of Section 14A is legally untenable, and the amendment by the Finance Act, 2022, is prospective. The appeals filed by the assessee were allowed, and the appeal filed by the Revenue was dismissed.

The Tribunal held that the NPK Fertiliser Unit qualifies as a specified business under Section 35AD, and incidental use of assets does not violate the provisions. Minor stock differences were deemed not a basis for disallowance, and Section 14A cannot be applied when no exempt income is earned.

The Tribunal restored the matter back to the file of the CIT(A) to provide the assessee with one more opportunity to represent their case, acknowledging that there was a reasonable cause for not appearing.

The Tribunal noted that the assessee was proceeded against ex-parte and the application for additional evidence was rejected on technical grounds. Considering the substantial rights involved, the assessee was granted one more opportunity to contest the case on merit.

The Tribunal noted that the assessee was proceeded against ex-parte and the application for additional evidence was rejected on technical grounds. Considering the substantial rights involved, the assessee was granted one more opportunity to contest the case on merit.

The Tribunal admitted additional evidence submitted by the assessee regarding the inheritance claim and restored the issue to the AO for fresh verification. The addition related to house property income was also restored to the AO.

The Tribunal held that the notice issued under Section 148 was invalid because it was issued beyond three years from the end of the assessment year without obtaining prior approval from the appropriate authority as stipulated in Section 151 of the Act. Consequently, the reassessment proceedings initiated based on this invalid notice were quashed.

The Tribunal admitted additional evidence submitted by the assessee regarding the inheritance claim and restored the issue to the AO for fresh verification. The addition related to house property income was also restored to the AO.

The Tribunal admitted additional evidence submitted by the assessee regarding the inheritance claim and restored the issue to the AO for fresh verification. The addition related to house property income was also restored to the AO.

The Tribunal noted that the CIT(A) denied TDS credit for want of a bank statement to prove receipt of rent net of TDS. The assessee has now furnished this as additional evidence. The Tribunal found that this evidence goes to the root of the matter and admitted it. It directed the Assessing Officer to verify the facts regarding the TDS credit claim.

The Tribunal admitted additional evidence submitted by the assessee regarding the inheritance claim and restored the issue to the AO for fresh verification. The addition related to house property income was also restored to the AO.

The Tribunal admitted additional evidence submitted by the assessee regarding the inheritance claim and restored the issue to the AO for fresh verification. The addition related to house property income was also restored to the AO.

The Tribunal admitted additional evidence submitted by the assessee regarding the inheritance claim and restored the issue to the AO for fresh verification. The addition related to house property income was also restored to the AO.

The Tribunal admitted additional evidence submitted by the assessee regarding the inheritance claim and restored the issue to the AO for fresh verification. The addition related to house property income was also restored to the AO.

The Tribunal condoned the delay in filing the appeal by liberally construing 'sufficient cause' in favor of substantial justice. The appeals were restored to the CIT(Exemptions) for fresh adjudication on merits after providing an opportunity of hearing to the assessee.

The Tribunal condoned the delay in filing the appeal by liberally construing 'sufficient cause' in favor of substantial justice. The appeals were restored to the CIT(Exemptions) for fresh adjudication on merits after providing an opportunity of hearing to the assessee.

The Tribunal held that share of profit from partnership firms is exempt income and therefore, investments in such firms should be included for calculating disallowance under Section 14A read with Rule 8D(2)(iii). The disallowance was re-calculated considering only those investments that yielded exempt income.

The Tribunal held that the mistake in selecting the wrong sub-clause was inadvertent and not fatal. It directed the CIT(E) to treat the application as filed under the correct sub-clause, consider it on its merits after providing an opportunity of hearing, and decide the case accordingly.

The Tribunal condoned the delay in filing the appeal, finding that substantial justice should be preferred over technicalities. The matter was restored to the AO for fresh adjudication after providing an opportunity for the assessee to present evidence, with a cost of Rs. 2000/- to be deposited.

The Tribunal held that the disallowance under section 14A read with Rule 8D cannot exceed the exempt income earned by the assessee. Relying on coordinate bench decisions and High Court pronouncements, the Tribunal decided to restrict the disallowance to the extent of exempt income.

The Tribunal held that the delay in filing the appeal was bona fide and due to circumstances beyond the appellant's control. Considering the principles of substantial justice, the Tribunal condoned the delay.

The Tribunal held that the requirement of filing the audit report in Form 10B is directory and not mandatory. The exemption under Section 11 of the Income Tax Act cannot be denied solely on account of a delay in filing the audit report, especially when the delay is due to a sufficient cause like technical glitches.

The Tribunal held that the AO had conducted sufficient inquiry and taken a plausible view in allowing the deduction. The PCIT's action under Section 263 was not sustainable as the twin conditions of the section were not met.

The Tribunal held that the violation of Section 11 cannot be the sole ground for rejecting a registration application under Section 12A, especially when the assessee has initiated steps to amend the offending clause.

The Tribunal condoned the delay in filing the appeal, finding sufficient cause. The Tribunal restored the matter back to the file of the CIT(A) to provide the assessee with an opportunity to represent their case effectively. The decision was not to be construed as an expression on the merits of the dispute.

The Tribunal condoned the delay in filing the appeal, finding sufficient cause. The Tribunal restored the matter back to the file of the CIT(A) to provide the assessee with an opportunity to represent their case effectively. The decision was not to be construed as an expression on the merits of the dispute.

The Tribunal noted that the Ld.CIT(A) had already remanded the matter back to the Assessing Officer for a de novo assessment. Since the original assessment order was no longer in existence, the penalty levied was not maintainable.

The Tribunal noted that the assessee had opted for the Vivad se Vishwas Scheme and filed a declaration. Consequently, the appeal was rendered infructuous.

The Tribunal decided on several grounds. Regarding the claim for deduction of discount pertaining to earlier years on a payment basis (Ground I for AY 2011-12), the CIT(A) directed verification, and the Tribunal upheld this direction. For domestic roaming charges (Ground II for AY 2011-12), the Tribunal held that the CIT(A) erred in holding the disallowance, implying the payment was not royalty and the amendment to Section 40(a)(ia) was applicable. For international roaming charges (Ground III for AY 2011-12), the Tribunal held that the CIT(A) erred in upholding the disallowance, suggesting the payments were not royalty under DTAAs. For international interconnection charges (Ground IV for AY 2011-12), the Tribunal held that the CIT(A) erred in enhancing the assessment and disallowing the charges, indicating they were not royalty under DTAAs. For the year-end provision of commission (Ground V for AY 2011-12), the Tribunal held that the CIT(A) erred in upholding the disallowance, allowing the deduction as the payees were not identifiable at the time of provision, citing the principle from Mahanagar Gas Ltd. (supra). For the deduction of provision of commission disallowed in AY 2010-11 (Ground VI for AY 2011-12), the CIT(A) directed verification, which the Tribunal upheld. For deduction under Section 35DD (Ground VII for AY 2011-12), the Tribunal held that the CIT(A) erred in not allowing the deduction. In the consolidated order, the Tribunal allowed Ground No. 5. In the revenue's appeal for AY 2015-16, the Tribunal dismissed grounds 1, 2, 3, and 5, and allowed ground 4. The operative direction for AY 2011-12 was to allow Ground No. 5, and for AY 2015-16, the revenue's appeal was partly allowed.

The Tribunal found that the CIT(A)'s order was not dealing with the grounds raised by the assessee and was in divergence to the issues. Therefore, the matter was remitted back to the CIT(A) for passing a speaking order.

The Tribunal held that the assessee had a reasonable cause for not being able to represent themselves effectively before the Ld. CIT(A) and therefore, one more opportunity should be granted. The matter was restored back to the file of the Ld. CIT(A) for adjudication.

The Tribunal held that the assessee had a reasonable cause for not being able to represent themselves effectively before the Ld. CIT(A) and therefore, one more opportunity should be granted. The matter was restored back to the file of the Ld. CIT(A) for adjudication.

The Tribunal held that the assessee had a reasonable cause for not being able to represent themselves effectively before the Ld. CIT(A) and therefore, one more opportunity should be granted. The matter was restored back to the file of the Ld. CIT(A) for adjudication.

The Tribunal condoned the delay, citing the principle of substantial justice over technicalities. The matter was restored to the CIT(A) for a fresh hearing, with a cost of Rs. 5,000 imposed on the assessee for non-cooperation and absence.

The Tribunal allowed the admission of additional evidence regarding intra-group services. It set aside the final assessment order and restored the matter to the AO for fresh adjudication after considering the new evidence.

The Tribunal decided on the various grounds. For Assessee Ground No. 5 (AY 2011-12), concerning the disallowance of year-end provision for commission, the Tribunal held that the CIT(A) erred in upholding the disallowance, as the payees were not identifiable at the time of making the provision. This ground was allowed. For Assessee Ground No. 6 (AY 2011-12), regarding the claim of deduction of provision of commission disallowed in AY 2010-11 on payment basis, the Tribunal noted it was a consequential ground related to TDS paid under protest. Following the Apex Court decision in Bharti Cellular Ltd. vs. ACIT, the assessee was not obligated to deduct TDS on prepaid discount, and disallowances for earlier years were deleted. Therefore, the AO was directed to allow the claim subject to verification. This ground was allowed for statistical purposes. The assessee's appeal was partly allowed. For Revenue Ground No. 1 (AY 2015-16) concerning discount to distributors, the Tribunal found it identical to a ground decided in AY 2011-12 and dismissed the revenue's ground. For Revenue Ground No. 2 (AY 2015-16) concerning ESOP amortization, it was also found identical to a ground in AY 2011-12 and dismissed. For Revenue Ground No. 3 (AY 2015-16) concerning Section 14A disallowance, it was identical to a ground in AY 2011-12 and dismissed. For Revenue Ground No. 4 (AY 2015-16) concerning RSLF, it was identical to a ground in AY 2011-12 and allowed. For Revenue Ground No. 5 (AY 2015-16) concerning Lease Charges to Quipo Telecom, it was identical to a ground in AY 2011-12 and dismissed. The revenue's appeal was partly allowed. The Tribunal did not expressly leave any issue undecided.

The Tribunal held that the assessee has a habitual tendency of defaulting on compliance and presenting appeals belatedly. Given the significant delays and the failure to offer any explanation or condonation application, the appeal was dismissed in limine.

The Tribunal noted that a co-ordinate bench had already decided a similar issue in favour of the appellant in another case involving group concerns. Therefore, adhering to judicial consistency, the Tribunal dismissed the revenue's ground.

The Tribunal held that the Revenue's explanation for the delay was not credible and lacked chronological clarity. The Tribunal found that the statutory limit for filing appeals is a mandate that cannot be disregarded on unsupported claims.

The Tribunal restored the matter to the file of the Ld.CIT(A) to decide the application for condonation of delay afresh. The Ld.CIT(A) is directed to consider the detailed affidavit filed by the assessee and hear both parties.

The Tribunal restored the matter to the file of the Ld.CIT(A) to decide the application for condonation of delay afresh. The Ld.CIT(A) is directed to consider the detailed affidavit filed by the assessee and hear both parties.

The Tribunal held that the assessment order and the CIT(A) order were passed ex-parte. Although the delay in filing the appeal was condoned, the assessee's behavior in not complying with lower authorities was noted. The Tribunal restored the matter to the CIT(A) for a fresh decision.

The Tribunal noted that the appeal was barred by limitation and no application for condonation of delay was made. Therefore, the appeal was rejected in limine on this ground.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee, as a stockbroker, acted as an intermediary for client transactions. The Tribunal concluded that the assessee had discharged its onus to explain the nature and source of the credits, and therefore, Section 68 was not applicable.

The Tribunal held that the assessee, being a stockbroker, acted as an intermediary for client transactions and did not own the funds or shares. The nature and source of transactions were duly explained, thus Section 68 was not applicable.

The Tribunal held that for Ground No. 5 (disallowance of year-end provision for commission), the assessee's appeal is allowed, as the CIT(A) erred in upholding the disallowance. For Ground No. 6 (allowance of discount pertaining to other years), the Tribunal directed the AO to allow the claim subject to verification, as it was a consequential ground related to TDS paid under protest, and allowed it for statistical purposes. The Tribunal also noted that for AY 2015-16, the revenue's appeal on discount was dismissed, and ESOP amortization and Section 14A expenses were also dismissed. However, the revenue's appeal on Revenue Share License Fees (RSLF) was allowed, and the appeal on Lease Charges was dismissed. The overall result for the assessee's appeal was partly allowed, and the revenue's appeal for AY 2015-16 was also partly allowed.

The Tribunal held that the CIT(A) erred in dismissing the appeal solely on grounds of non-compliance without considering the merits. Principles of natural justice require a reasoned order, even if the assessee is absent.

The Tribunal condoned the delay considering the assessee's age, illiteracy, reliance on a tax consultant, and communication difficulties during the Covid period. The Tribunal noted that the CIT(A) order was passed ex-parte without deciding on merits and thus set aside the appellate order.