ITAT Visakhapatnam Judgments — March 2025

The Tribunal found that the assessee was not validly notified about the hearing dates because the CIT(A) office incorrectly used the email address from the ITR. This deprived the assessee of a reasonable opportunity to present his case. The Tribunal set aside the CIT(A) order and remanded the matter back to the CIT(A) for re-adjudication after providing a proper opportunity of hearing.

The tribunal found that the assessee was not validly notified about the hearing dates by the CIT(A), as notices were sent to an email ID from the Income Tax Return (ITR) instead of the specific email provided in Form No.35 for the appeal. This constituted a denial of a reasonable opportunity of being heard. Consequently, the matter is remanded back to the CIT(A) for fresh adjudication after providing the assessee a proper opportunity of being heard.

The ITAT held that the CIT(A) erred by dismissing the appeal ex-parte without addressing or passing a speaking order on the additional documentary evidence filed by the assessee under Rule 46A of the Income-tax Rules, 1962. The matter was remitted back to the file of the CIT(A) with a direction to re-adjudicate the appeal after considering the additional evidence and affording a reasonable opportunity of being heard to the assessee.

The Tribunal found that the assessee had specifically opted out of email communication in its Form-35 and was not physically served with a notice for the CIT(A) hearing. Consequently, the assessee was deprived of a reasonable opportunity of being heard. The Tribunal set aside the CIT(A)'s order and restored the matter for fresh adjudication, directing the CIT(A) to afford the assessee a proper opportunity to present its case and evidence.

The Tribunal held that the CIT(E) erred in invoking Section 263 jurisdiction because the issues raised were already sub-judice before the CIT(A). Furthermore, the change in the trust's name was known to the department, and Section 11 exemption could not be denied merely on this ground, especially since Section 80G approvals were granted in the new name. The assessee had adequately explained the source of excess expenditure and the challenged expenses were deemed legitimate administrative costs for charitable activities.

The Tribunal noted that while the assessee provided evidence of the partnership and bank account conversion, neither the AO nor the CIT(A) adequately verified if the cash deposits were properly accounted for in the partnership firm's books. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the AO for de novo verification and a decision after giving the assessee an opportunity to be heard.

The Tribunal observed that the CIT(E) did not specify which activities were not charitable, despite the assessee having been previously granted registration under Section 12AB. Finding that the assessee incurred substantial expenditure, the Tribunal set aside the CIT(E)'s order and remanded the matter for reconsideration.

The Tribunal held that the additional income of Rs. 11 lakh should be assessed as business income, taxable at normal rates, and not as unexplained money under Section 69A read with Section 115BBE. It noted that the assessee was engaged in business, had no other source of income, maintained regular books (though not at residence), and presented evidence of business activity, supported by prior ITAT decisions.

The Tribunal set aside the CIT(A)'s order, restoring the appeals to the Assessing Officer. It directed the AO to re-examine the claim for deduction of interest on borrowed capital, ensuring it is allowed if incurred wholly and actually for earning rental income, and to rectify computation mistakes for all assessment years.

The Tribunal set aside the CIT(A)'s order, accepting the assessee's contention. It restored the appeals to the Assessing Officer's file for fresh consideration, directing the AO to re-examine the matter, allow relevant expenditure (including interest on borrowed capital), and rectify computation sheet mistakes for all assessment years.

The Tribunal set aside the CIT(A)'s order, noting the inconsistency in allowing interest deduction in a later assessment year while disallowing it for the impugned years. The matter was restored to the Assessing Officer for fresh consideration, directing the allowance of interest expenditure on borrowed capital and rectification of computation sheet errors for all assessment years.

The Tribunal set aside the CIT(A)'s order, remanding the case to the Assessing Officer for fresh consideration of the allowability of interest expenditure for all assessment years. The AO is directed to re-examine the issue, afford the assessee an opportunity of being heard, and ensure all computation sheet mistakes are rectified.

The Tribunal observed that the AO allowed interest expenditure for AY 2020-21 when income was treated as 'income from other sources'. It set aside the CIT(A)'s order, remanding the case back to the Assessing Officer to re-examine the allowance of deduction for interest on borrowed capital for the impugned assessment years and to rectify errors in the computation sheets.

The Tribunal directed the deletion of Rs.29,82,566/- of unsecured loans received from MV Rathnam, as the assessee had discharged its onus regarding identity, creditworthiness, and genuineness. It also directed the deletion of Rs.6,28,000/- for loans from M. Kameswara Rao and MV Rathnam, noting that once part of the loan was accepted as genuine, the remaining could not be added as unexplained cash credit. Furthermore, the Tribunal held that additions made under Section 68 cannot be treated as gross receipts for the purpose of determining the threshold limit for exemption under Section 10(23C)(iiiad) and allowed the assessee the benefit of this exemption.

For AY 2018-19, the Tribunal held that the Section 148 notice was invalid due to improper approval by the CIT instead of the competent authority (CCIT/PCCIT) as per Section 151, thereby quashing the assessment. For AY 2019-20, the Tribunal remanded the matter to the AO for fresh examination of the cash deposits, considering the assessee's cooperative nature and the principle of mutuality, as the CIT(A) erred in upholding ad-hoc additions.

For AY 2018-19, the Tribunal held that once the Section 148 notice and subsequent assessment were declared invalid due to sanction by CIT instead of the competent authority (CCIT/PCCIT) under Section 151, the CIT(A) erred in upholding additions on merits. For AY 2019-20, the Tribunal observed that the assessee's claim of mutuality and its audited books were not adequately considered, remitting the matter back to the AO for de novo verification of the source of deposits and the mutuality principle.

For A.Y. 2016-17 and 2017-18, the Tribunal held that there was no valid satisfaction recorded by the Assessing Officer of the searched person, a fundamental jurisdictional requirement for Section 153C proceedings, thus quashing the assessments. For A.Y. 2018-19, regarding the on-money receipts of Rs.43,82,000/-, the Tribunal directed the AO to estimate 25% profit on the total unaccounted receipts, deleting the balance addition, recognizing that the entire on-money could not be treated as income.

The Tribunal found that the assessee's grandfather had entered into an agreement for sale on 16.10.2012, and the entire consideration was paid on or before that date, a fact not disputed by the AO. Applying the first proviso to Section 56(2)(vii)(b), the Tribunal held that when the agreement date and consideration payment precede the registration date, the stamp duty value as of the agreement date should be considered. Therefore, the addition based on the registration date's stamp duty value was incorrect, and the order of the CIT(A) was set aside.

The Tribunal quashed the assessment orders for AYs 2016-17 and 2017-18, finding no valid satisfaction recorded by the AO of the searched person, which is a jurisdictional defect for Section 153C assessments. For AY 2018-19, it directed the AO to estimate 25% profit on the unaccounted gross receipts from land sale, acknowledging that the entire amount could not be treated as income due to likely associated expenditures, thus deleting the balance addition.

For A.Y. 2016-17 and 2017-18, the Tribunal quashed the assessments under Section 153C, finding that no legal and valid satisfaction note was recorded by the AO of the searched person, which is a fundamental jurisdictional requirement. For A.Y. 2018-19, the Tribunal directed the AO to estimate 25% profit on the total unaccounted receipts of Rs.43,82,000/-, thereby deleting the balance addition, acknowledging that the entire on-money could not be treated as income.

The learned counsel for the assessee requested to withdraw the appeal, and the Department Representative offered no objection. Consequently, the tribunal allowed the withdrawal, dismissing the appeal as such.

The Tribunal acknowledged the 40-day delay and the CIT(A)'s failure to consider the condonation petition. Referring to the Supreme Court's pronouncement on extended limitation periods due to the pandemic (15/03/2020 to 28/02/2022), the Tribunal condoned the delay. It directed the learned CIT(A) to admit the appeal for a proper hearing after providing an opportunity to the assessee.

The Tribunal held that the Specified Bank Notes (Cessation of Liabilities) Act, 2017, did not restrict dealing with SBNs until 31.12.2016. Since the assessee had explained the source of cash deposits from business sales, and this explanation was not disputed by the AO, the additions made under Section 69A were ordered to be deleted, supported by judicial precedents.

The Tribunal found that the CIT(A) dismissed the appeal 'in limine' without considering merits, notwithstanding the assessee's submission of relevant details including the assessment order and Form 35. The Tribunal set aside the CIT(A)'s order and remitted the matter back to the AO for a 'de novo' assessment, granting the assessee another opportunity to be heard and present evidence, subject to payment of a nominal cost of Rs.5,000/- for negligence.

The Tribunal confirmed the addition of Rs.1,90,000/- for Axis Bank deposits made before corresponding withdrawals, but deleted Rs.13,20,000/- for deposits after withdrawals, as the revenue failed to prove the withdrawn cash was spent elsewhere. For Punjab National Bank deposits, Rs.9,50,000/- (gift from father) was confirmed due to a long time gap, while Rs.5,50,000/- (gold loan/withdrawal) and Rs.2,00,000/- (previous withdrawal) were deleted. The addition of Rs.2,69,000/- for HDFC Bank was sustained as the assessee could not prove the creditworthiness of the lender Mr. D. Satish. In total, out of Rs.35,29,000/-, Rs.20,70,000/- was deleted, and Rs.14,59,000/- was sustained.

The Income Tax Appellate Tribunal dismissed the appeal as withdrawn, acknowledging the settlement of the tax dispute under the Vivad Se Vishwas Scheme, 2024. The Tribunal also granted the assessee liberty to apply for reinstatement of the appeal if the Vivad Se Vishwas application is rejected for any reason.

The Tribunal noted that the CIT(A) dismissed the appeal without considering the merits, despite the assessee not appearing. The Tribunal found it a fit case to quash the order and restore the issue to the AO.

The Income Tax Appellate Tribunal remitted the matter back to the Assessing Officer, directing that the assessee be given one more opportunity to provide documentary evidence to substantiate the cash deposits. The AO is to examine the evidence and decide the matter on merits, adhering to principles of natural justice.

The Tribunal held that Section 68 of the Income Tax Act applies only when sums are found credited in the 'books of account maintained by the assessee'. Since the Assessing Officer himself acknowledged that the assessee did not maintain books of account, the addition made under Section 68 was legally unsustainable and deserved to be deleted.

The ITAT found that the CIT(A) did not comply with Section 250(6) of the Income Tax Act by dismissing the appeal ex-parte without considering the merits. The Tribunal held that even in the assessee's absence, the CIT(A) should have dealt with the matter on merits. The impugned order was set aside and the case was remanded to the CIT(A) for fresh adjudication on merits.

The Tribunal found that the core issue in the present appeal, arising from the U/s. 143(1) intimation, was identical to the issue already remitted to the CIT(A) by a previous Tribunal order (ITA No. 313/Viz/2023) for statistical purposes and affording an opportunity of hearing. Consequently, the current appeal was deemed infructuous.

The Tribunal acknowledged the assessee's argument that the delay in filing the appeal was due to technical issues with the ITBA portal, which was not enabled, and the non-upload of the assessment order. Considering these circumstances, the ITAT remitted the matter back to the Ld. CIT(A) with a direction to consider the assessee's condonation petition and then decide the appeal on its merits.

The assessee's appeals against the quantum addition and penalty before the CIT(A) were filed with significant delays (457 and 279 days respectively), citing ill health. The CIT(A) dismissed these appeals in limine due to the absence of cogent evidence to condone the delay. The ITAT upheld the CIT(A)'s decision, finding no infirmity as the assessee failed to provide sufficient or reasonable cause and supporting evidence for the delay even before the tribunal.

The Tribunal held that for assessment proceedings initiated under Section 153C of the Act, it is mandatory to issue a notice under the said section. In this case, the AO relied on material seized from M/s. Yugandhar Housing Pvt Ltd for assessment of the assessee but failed to issue notice u/s. 153C.

The Income Tax Appellate Tribunal (ITAT) agreed with the CIT(A)'s directions for computing income under both 'capital gain' and 'business income' heads, considering the conversion of agricultural land into stock-in-trade. Finding the CIT(A)'s dismissal of the appeal inconsistent with its own findings, the ITAT allowed the assessee's appeal.

The Ld. CIT(A) upheld the AO's addition of Rs. 59,80,000/- for unexplained cash deposits, which the Tribunal also confirmed due to lack of evidence from the assessee. However, regarding the additional ground, the Tribunal held that the revised tax rate of 60% under Section 115BBE applies only from 01.04.2017, meaning the earlier 30% rate is applicable for the transactions in question, relying on Madras High Court and Ahmedabad Tribunal decisions.

The Tribunal admitted the additional evidences presented by the assessee (confirmation letters and bank statements) as they were deemed necessary for a fair adjudication. The case was remitted back to the Assessing Officer to re-examine these evidences and complete the assessment de novo in accordance with law.

The Tribunal noted that the assessee failed to appear or submit evidence despite multiple opportunities provided by the AO and CIT(A). However, in the interest of natural justice, the Tribunal decided to remit the matter back to the Ld. CIT(A) for fresh consideration on merits, directing the assessee to cooperate.

The Tribunal upheld the addition under Section 69A due to the assessee's failure to provide documentary evidence for the cash sources. However, it allowed the additional ground regarding Section 115BBE, ruling that the amended tax rate of 60% is applicable only from April 1, 2017, and not retrospectively to transactions during the demonetization period, thereby applying the erstwhile 30% rate to such transactions.

The Tribunal observed that the Ld. CIT(A) had passed an ex-parte order, denying the assessee an adequate opportunity of being heard despite repeated notices. To ensure principles of natural justice and provide substantial justice, the Tribunal decided to remit the matter back to the Ld. CIT(A) for fresh consideration on merits, directing the assessee to cooperate.

The Tribunal held that a belated return filed in response to a Section 148 notice does not render it invalid or non-est and must be taken on record. It emphasized the mandatory nature of issuing a Section 143(2) notice for completing an assessment, clarifying that Section 292BB does not cure the complete absence of such a notice. Consequently, the assessment order passed by the AO under Section 147 read with Sections 144 and 144B was quashed due to the non-issuance of the Section 143(2) notice, rendering the addition under Section 69 infructuous.

The assessee filed appeals against the quantum addition and penalty before the Ld. CIT(A) with significant delays (457 and 279 days), attributing the delay to ill health. However, no supporting medical evidence was provided to the CIT(A) or the Tribunal. Consequently, the CIT(A) refused to condone the delay and dismissed the appeals, a decision upheld by the ITAT.

The Tribunal found that the Ld. CIT (Exemption) rejected the application without properly specifying what constituted commercial activities and without due consideration of the documents submitted by the assessee. Therefore, the matter was remitted back to the Ld. CIT (Exemption) to re-examine the documents and submissions, and decide on the Section 80G registration after providing a reasonable opportunity of being heard to the assessee.

The Tribunal, acknowledging that the assessee was not given a proper opportunity of being heard by the CIT(A), remitted the matter back to the Ld. CIT(A). This remand is for a fresh consideration of the appeal on merits, granting the assessee one more opportunity to present her case, with a caution for future cooperation.

The Tribunal, upon examining the affidavit and medical records of the assessee's counsel, found a reasonable and sufficient cause for the 165-day delay, attributable to the counsel's Covid-19 illness, hospitalization, and subsequent operational disruptions. Consequently, the Tribunal condoned the delay and remitted the matter back to the CIT(A) to decide the appeal on its merits after affording the assessee a proper opportunity.

The Tribunal found the CIT(E)'s order cryptic as it failed to specify which activities were not charitable. Consequently, the Tribunal set aside the impugned order and remanded the matter back to the CIT(E) for fresh consideration, directing an opportunity for the assessee to be heard and the issuance of a speaking order.

The Tribunal noted that the assessee took loans and made cash deposits from business sales. The assessee claimed the additions were erroneous and not supported by evidence, and that they were unable to respond to notices due to a misplaced phone. The Tribunal found it just and proper to remit the matter back to the Assessing Officer for verification.

The ITAT observed that the assessee had already been granted registration under Section 12A of the Act and found that the CIT(E) had not provided any specific reasons for concluding that the assessee's activities were not charitable. Consequently, the ITAT set aside the CIT(E)'s order and remanded the matter for reconsideration and grant of Section 80G registration in light of the submitted material.