ITAT Nagpur Judgments — February 2025

The Tribunal set aside the impugned order of the CIT(E) and remitted the matter back for de novo adjudication. The assessee was directed to cooperate with the CIT(E) and provide necessary documents.

The assessee did not press the ground related to the validity of the notice under section 143(2). Regarding the indexed cost of improvement, the tribunal allowed the indexed cost for the years 1981-82 and 1983-84, but disallowed it for 1990-91, considering it impossible to incur such expenditure in that period.

The Tribunal upheld the CIT(A)'s decision, finding that the additions under Section 69C were unjustified as the amounts were opening balances and not expenditure incurred in the relevant year. The Tribunal also noted that the assessee had provided sufficient documentation for the genuineness of the creditors and the expenditure.

The Tribunal upheld the CIT(A)'s decision to delete the additions. It found that the investor's financial affairs were accepted, and there was sufficient infusion of shareholder funds to cover loans and advances, negating the diversion of interest-bearing funds.

The Tribunal held that the assessee failed to provide sufficient evidence to establish the genuineness and purpose of the interest expenditure. The dominant purpose of the loans was not to earn income but to meet the requirements of a company, thus disallowing the deduction.

The Tribunal noted that while the assessee showed a casual attitude, they acknowledged that small trusts may face difficulties with the revised registration procedures. Considering the overall purpose of fiscal provisions, the Tribunal decided to set aside the matter back to the CIT(E) for fresh adjudication.

The Tribunal upheld the CIT(A)'s order, finding that the assessee had provided sufficient explanation and evidence for the amounts in question. The AO's additions were deemed to be made without proper inquiry or cogent reasons.

The Tribunal upheld the disallowance of the Section 54F exemption. It found that the construction was on a commercial property, the timing of the expenditure was before the sale of the asset, and the assessee had already claimed benefits for the same construction in earlier years, defeating the purpose of the section.

The Tribunal held that the AO failed to conduct proper inquiry by not examining the impounded documents. The revisional order passed by the PCIT under Section 263 was justified, and the assessment order was rightly set aside for re-assessment.

The Tribunal condoned the delay of 96 days, finding reasonable cause. It was noted that the assessee did not appear before the Assessing Officer or the CIT(A), leading to ex-parte orders. The Tribunal decided to grant one opportunity to the assessee to present its case before the Assessing Officer, setting aside the CIT(A)'s order.

The appeals are dismissed as withdrawn. The assessee is granted liberty to revive the appeals by filing a Misc. Application if they are unsuccessful in the Vivad Se Vishwas Scheme.

The assessee requested to withdraw the appeal to settle it under the Vivad Se Vishwas Scheme. The Departmental Representative did not object to the request. The Tribunal granted liberty to revive the appeal if the scheme settlement is unsuccessful.

The Tribunal noted that the appeal of Shri Shankarrao Bhad, in whose name the substantive additions were made, was still undecided at the CIT(A) level. The Tribunal held that the CIT(A) had made a grave error in deciding the assessee's appeal (where additions were protective) without considering the fate of the other person (where additions were substantive). It is a settled principle that both protective and substantive adjudications must be done simultaneously. Therefore, the Tribunal allowed the Revenue's appeal and set aside the entire matter back to the CIT(A) for denovo adjudication, to be decided along with the appeal of Shri Shankarrao Bhad. The Tribunal did not decide on the merits of the additions or the CIT(A)'s findings regarding commission income. The assessee's appeal was allowed for statistical purposes.

For assessment years 2013-2014, 2014-2015, and 2016-2017, the Tribunal found merit in the assessee's argument that on identical facts for other years, the AO had found no fault after verifying books of accounts. The Tribunal noted that the assessee is a society maintaining balance sheets and regular books of accounts. Therefore, the matter was restored to the jurisdictional Assessing Officer for fresh verification and adjudication, providing the assessee with an adequate opportunity of being heard. The grounds of appeal for these years were allowed. For assessment year 2020-2021, the Tribunal relied on a coordinate bench decision in the case of Bhagyashri Nagri Sahakari Pat Sanstha Maryadit, which held that interest from co-operative banks on amounts received from members is assessable under 'Income from Business' and eligible for deduction under Section 80P(2)(a)(i). In the absence of contrary material from the Revenue, the Tribunal held that the assessee is entitled to claim deduction under Section 80P, and the grounds of appeal were allowed. The operative direction for the first three years was to remand the matter for fresh verification, and for the last year, the deduction was allowed.

The Tribunal held in favour of the assessee, allowing the appeal and quashing the PCIT's order. The Tribunal agreed with the assessee's submission that the assessment was completed under Section 144, which empowers the AO to make an assessment to the best of their judgment. The Tribunal reasoned that a best judgment assessment under Section 144 cannot be considered erroneous merely because the PCIT believes a different estimation rate should have been applied. Such an approach would undermine the AO's independent power under Section 144. Furthermore, the Tribunal found that when an assessment is completed under Section 144 due to inadequate compliance by the assessee, it cannot be characterized as a lack of inquiry justifying the invocation of Section 263. The Tribunal also noted that the assessed income of ₹6,18,304 was substantially higher than the figure mentioned by the PCIT, indicating no prejudice to the revenue. Consequently, the twin conditions for invoking Section 263 – that the order is erroneous and prejudicial to the revenue – were found to be non-existent. The PCIT erred in revising the order.

For assessment years 2013-2014, 2014-2015, and 2016-2017, the Tribunal found merit in the assessee's argument that on identical facts for other years, the AO had found no fault after verifying books of accounts. The Tribunal noted that the assessee is a society maintaining balance sheets and regular books of accounts. Therefore, the matter was restored to the jurisdictional Assessing Officer for fresh verification and adjudication, providing the assessee with an adequate opportunity of being heard. The grounds of appeal for these years were allowed. For assessment year 2020-2021, the Tribunal relied on a coordinate bench decision in the case of Bhagyashri Nagri Sahakari Pat Sanstha Maryadit, which held that interest from co-operative banks on amounts received from members is assessable under 'Income from Business' and eligible for deduction under Section 80P(2)(a)(i). In the absence of contrary material from the Revenue, the Tribunal held that the assessee is entitled to claim deduction under Section 80P, and the grounds of appeal were allowed. The operative direction for the first three years was to remand the matter for fresh verification, and for the last year, the deduction was allowed.

For assessment years 2013-2014, 2014-2015, and 2016-2017, the Tribunal found merit in the assessee's argument that on identical facts for other years, the AO had found no fault after verifying books of accounts. The Tribunal noted that the assessee is a society maintaining balance sheets and regular books of accounts. Therefore, the matter was restored to the jurisdictional Assessing Officer for fresh verification and adjudication, providing the assessee with an adequate opportunity of being heard. The grounds of appeal for these years were allowed. For assessment year 2020-2021, the Tribunal relied on a coordinate bench decision in the case of Bhagyashri Nagri Sahakari Pat Sanstha Maryadit, which held that interest from co-operative banks on amounts received from members is assessable under 'Income from Business' and eligible for deduction under Section 80P(2)(a)(i). In the absence of contrary material from the Revenue, the Tribunal held that the assessee is entitled to claim deduction under Section 80P, and the grounds of appeal were allowed. The operative direction for the first three years was to remand the matter for fresh verification, and for the last year, the deduction was allowed.

The Tribunal noted that the assessee was in jail until 2019 and the appeal was filed in 2024, resulting in a delay of over 5 years. Despite the general practice of condoning delays, the Tribunal found the delay in this case to be inordinate and not adequately explained on a day-to-day basis. Citing a Supreme Court judgment, the Tribunal declined to condone the delay.

The Tribunal noted that the assessee was in jail until 2019 and the appeal was filed in 2024, resulting in a delay of over 5 years. Despite the general practice of condoning delays, the Tribunal found the delay in this case to be inordinate and not adequately explained on a day-to-day basis. Citing a Supreme Court judgment, the Tribunal declined to condone the delay.

The Tribunal noted that the assessee was in jail until 2019 and the appeal was filed in 2024, resulting in a delay of over 5 years. Despite the general practice of condoning delays, the Tribunal found the delay in this case to be inordinate and not adequately explained on a day-to-day basis. Citing a Supreme Court judgment, the Tribunal declined to condone the delay.

The Tribunal held that the interest income earned by the cooperative society from its investments made with cooperative banks is derived from its business activities and should be treated as 'Income From Business', not 'Income From Other Sources'. Consequently, the assessee is entitled to the deduction under Section 80P.

The Tribunal held that the interest income earned by the cooperative society from its investments made with cooperative banks is derived from its business activities and should be treated as 'Income From Business', not 'Income From Other Sources'. Consequently, the assessee is entitled to the deduction under Section 80P.

The Tribunal found that the assessee had provided sufficient documents demonstrating the utilization of funds for its objects, including details of FCRA funds and financial statements. The CIT(E)'s observations regarding idle funds were found to be unjustified.

The Tribunal held that loose papers found at a third party's premises have no evidentiary value against the assessee. Furthermore, a retracted statement cannot be relied upon without corroborative evidence, and the assessee has a right to cross-examine witnesses.

The Tribunal upheld the CIT(A)'s deletion of the addition, stating that an unsigned photocopy of a sale agreement found at a third party's premises, without corroborative evidence or opportunity for cross-examination, cannot be the sole basis for an addition. Relying on Supreme Court judgments, the Tribunal found the addition to be unsubstantiated.

The Tribunal held that the disallowance of Section 80P deduction based on Section 80AC(ii) was not applicable for assessment years prior to April 1, 2018. It also noted that the assessee had filed a return during the assessment proceedings and the interest income was derived from deposits made by members, which is part of the society's business.

The Tribunal held that the interest income earned by the cooperative society from its investments made with cooperative banks is derived from its business activities and should be treated as 'Income From Business', not 'Income From Other Sources'. Consequently, the assessee is entitled to the deduction under Section 80P.

The Tribunal held that the CIT(E) erred in rejecting the application without proper consideration of the assessee's submissions. The Tribunal found that the activities like rehabilitation centres and clinics, as mentioned in the assessee's MOA, were explained by the assessee as incidental to educational objectives.

The Tribunal upheld the deletion of the Rs. 7.50 crore addition, finding that the expenditure was recorded in the books and Section 69C was not applicable. The Tribunal also upheld the deletion of the Rs. 20,67,364 addition as it was based on an amount already deleted by the CIT(A).

The Tribunal acknowledged that the CIT(A)'s order was ex-parte. Following the principles of natural justice, the Tribunal decided to set aside the CIT(A)'s order and remit the matter back for fresh adjudication.

The Tribunal held that the CIT(E) erred in rejecting the application without proper consideration of the assessee's submissions regarding the nature of its activities. The matter was remanded back to the CIT(E) for fresh adjudication.

The Tribunal noted that the CIT(A) dismissed the appeal ex-parte without considering the adjournment request. In the interest of natural justice, the matter was set aside to the CIT(A) for de novo adjudication.

The Tribunal found that although opportunities were given, the order was ex-parte. Applying the principles of natural justice, the Tribunal set aside the CIT(A)'s order and remitted the matter back for fresh adjudication on merits after granting the assessee a reasonable opportunity to be heard.

The appeals are dismissed as withdrawn. The assessee is granted liberty to revive the appeals by filing a Misc. Application if they are unsuccessful in the Vivad Se Vishwas Scheme.

The Tribunal held that in cases where the assessment is unabated, any addition can only be made if there is incriminating material found during the search. Since no such material was found, and the AO did not rely on any, the addition made by the AO was unjustified and unsustainable. The Tribunal also noted a violation of natural justice as the assessee was not given an opportunity to cross-examine the third party whose statement was the basis of the addition.

The Tribunal observed that the CIT(A) passed an ex-parte order without the assessee's appearance, despite granting opportunities. Adhering to the principles of natural justice, the Tribunal decided to set aside the CIT(A)'s order and remit the matter back for adjudication on merits after providing the assessee with a reasonable opportunity of being heard.

The CIT(A) upheld the AO's action, finding that the assessee's explanation regarding the increase in capital was inconsistent and lacked documentary evidence. The Tribunal found that the assessee failed to satisfactorily demonstrate how the CIT(A)'s observations were perverse and upheld the lower authorities' order.

The CIT(A) held that the assessee's explanation for the delay in filing the appeal, citing unawareness of the local manager, was not a reasonable cause. The Tribunal concurred, stating that the assessee's gross negligence and lack of bona fide did not constitute a 'sufficient cause' for condoning the delay in filing the appeal.

The Tribunal noted that the assessee was in jail until 2019 and the appeal was filed in 2024, resulting in a delay of over 5 years. Despite the general practice of condoning delays, the Tribunal found the delay in this case to be inordinate and not adequately explained on a day-to-day basis. Citing a Supreme Court judgment, the Tribunal declined to condone the delay.

The Tribunal noted that the assessee was in jail until 2019 and the appeal was filed in 2024, resulting in a delay of over 5 years. Despite the general practice of condoning delays, the Tribunal found the delay in this case to be inordinate and not adequately explained on a day-to-day basis. Citing a Supreme Court judgment, the Tribunal declined to condone the delay.

The Tribunal condoned the delay of 271 days, finding reasonable cause. The Tribunal noted that both the Assessing Officer and CIT(A) had passed ex-parte orders without the assessee appearing, and to uphold the principles of natural justice, an opportunity was granted.

In the interest of justice and natural justice, the matter is remitted back to the Assessing Officer for denovo adjudication. The assessee is to be provided a reasonable opportunity of being heard.

The appeals are dismissed as withdrawn. The assessee is granted liberty to revive the appeals by filing a Misc. Application if they are unsuccessful in the Vivad Se Vishwas Scheme.

The Tribunal held that reopening assessments based on 'dumb documents' from a third party without allowing cross-examination and without corroborative evidence is bad in law. The additions made under Section 69A were deleted.

The CIT(A) deleted the additions for deemed dividend, rental income, and cash credit, and granted partial relief on business promotion expenses. The Tribunal agreed with the CIT(A)'s decision, finding no infirmity in his order.

The Tribunal held that the AO had conducted inquiries, gathered documents, and taken a possible view in accepting the returned income. It was settled law that if two views are possible and the AO has taken one, the PCIT cannot invoke revisional powers under section 263. The Supreme Court's judgment in CIT vs. Embassy Brindavan Developers was cited.

The Tribunal held that reopening assessments based on 'dumb documents' from a third party without allowing cross-examination and without corroborative evidence is bad in law. The additions made under Section 69A were deleted.

The Tribunal held that reopening assessments based on 'dumb documents' from a third party without allowing cross-examination and without corroborative evidence is bad in law. The additions made under Section 69A were deleted.

The ITAT held that the CIT(A)'s directions were flawed as the assessee had failed to discharge its onus during assessment. The tribunal restored the assessment orders passed by the Assessing Officer, stating that the assessee should not be allowed a second innings to improve its case.