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59 orders · Page 2 of 2
The Tribunal held that the penalty imposed under section 271AAC(1) of the Income Tax Act, 1961, is unsustainable. The reasoning was that the very basis for the penalty, which was the addition of Rs. 6,60,000/- made by the AO under section 69 of the Act, had been vacated by the Tribunal in its order passed in ITA No. 507/Viz/2025, dated 19/02/2026. Consequently, the penalty must also meet the same fate and is liable to be vacated. The Tribunal quashed the penalty imposed by the AO under section 271AAC(1) of the Act. The appeal filed by the assessee was allowed in terms of these observations.
The Tribunal partly allowed the assessee's appeal. Regarding cash deposits of Rs. 7 lakhs on 16.09.2016, the Tribunal found that the assessee had sufficient source from a cash withdrawal of Rs. 2 lakhs on 29.08.2016 and sale of her agricultural land for Rs. 5.10 lakhs on 15.09.2016. Therefore, the addition of Rs. 7 lakhs was directed to be deleted. For cash deposits of Rs. 10 lakhs on 12.11.2016, the Tribunal held that Rs. 7 lakhs could be explained by previous cash withdrawals on 16.09.2016. The addition was directed to be deleted to this extent. However, for the balance Rs. 3 lakhs of these deposits, no explanation was offered, so the addition was sustained. In total, Rs. 14 lakhs of the Rs. 17 lakhs addition were deleted, and Rs. 3 lakhs were confirmed. Concerning the levy of tax under Section 115BBE, the Tribunal followed the Rajasthan High Court's decision in Deepak Maratha, holding that the amendment to Section 115BBE is applicable from AY 2018-19 onwards. Thus, the AO was directed to compute tax at the normal rate of 30% for AY 2017-18 on the confirmed addition.
The Tribunal allowed the assessee's appeal, deleting the additions sustained by the CIT(A). Regarding the loan from Mrs. Allam Haritha, the Tribunal noted that the source of the Rs. 8 lakhs received during the year was from the repayment of a previous loan, and the creditworthiness of the creditor was accepted in an earlier year. For the amount from Mr. Angadala Venkata Rao, the Tribunal found it was an advance against the sale of a vehicle, with transactions conducted through banking channels and confirmed by parties. For the loan from Mr. Allam Venkata Reddy, the Tribunal found that the assessee had established identity, genuineness, and creditworthiness through filed evidence, citing CIT v. Lovely Exports (P) Ltd. The Tribunal also found that the identity, genuineness, and creditworthiness of the loan creditors who were the assessee's children (Mr. Gude Ganesh Satya, Mrs. Gude Sravani, and Mrs. Gude Tulasi) were satisfactorily proved through detailed evidence, including bank statements and explanations of the source of funds (e.g., gold loans from cooperative banks). Therefore, the Tribunal directed the deletion of all additions sustained by the CIT(A).
The Tribunal held that while the assessee was non-cooperative at various stages, in the interest of justice and to provide one more opportunity, the order of the Ld. CIT(A) for AY 2017-18 was set aside and the issue was remitted back. The Tribunal found that the assessee was prevented by sufficient cause for not filing the condonation petition. The Ld. CIT(A) was directed to reconsider the appeal after providing a hearing and the assessee was directed to file the condonation petition and pay Rs. 5,000/- to the Prime Minister National Relief Fund. For AY 2018-19, the Tribunal found sufficient cause for the 28-day delay due to a medical emergency and condoned the delay. The matter was remanded to the Ld. CIT(A) to decide the issues on merits after providing an opportunity of hearing, with a direction to the assessee to pay Rs. 5,000/- to the Prime Minister National Relief Fund for their lackadaisical approach. The ratio is that procedural delays, if sufficiently explained, should not preclude an assessee from getting a decision on merits, especially when the original assessment was ex-parte.
The Tribunal condoned the delay of 242 days in filing the appeal. It reasoned that there was no deliberate or willful attempt by the assessee to delay filing, and the delay was due to seeking counsel and collating documents, which were beyond the assessee's control. Citing *Collector Land Acquisition, Anantnag & Ors. vs. Mst. Katiji & Ors.*, the Tribunal emphasized that refusing to condone delay can defeat the cause of justice, while condoning it allows for a decision on merits. The Tribunal noted that the assessee, a non-filer, did not get an effective opportunity of hearing before the AO or the CIT(A). The CIT(A) had dismissed the appeal ex parte. Given the assessee's claim that the property belonged to a company and the willingness to produce evidence, the Tribunal set aside the order of the CIT(A) and remitted the issue back to the AO. The AO was directed to reconsider the matter after affording a reasonable opportunity of hearing to the assessee. The appeal was allowed for statistical purposes.
The Tribunal noted that the assessee, a PACCS engaged in providing credit facilities, failed to file its return by the due date and filed it only in response to a notice under Section 148, claiming deduction under Section 80P. The AO made additions under Section 69A for unexplained money due to the assessee's failure to explain the nature and source of credits. The assessee also failed to appear or provide details before the CIT(A). While acknowledging the assessee's claim that credits were normal business transactions, the Tribunal found that the assessee could not provide any details to substantiate this before the AO or CIT(A). Considering the ex parte nature of the proceedings and the assessee's status as a credit co-operative society operating from a remote village, which might face difficulties in collecting details, the Tribunal decided to set aside the CIT(A)'s order and remand the issue back to the AO. The AO is directed to reconsider the issue after providing a reasonable opportunity of hearing and allowing the assessee to furnish supporting evidence. The appeal was allowed for statistical purposes.
The Tribunal held that while the assessee was non-cooperative at various stages, in the interest of justice and to provide one more opportunity, the order of the Ld. CIT(A) for AY 2017-18 was set aside and the issue was remitted back. The Tribunal found that the assessee was prevented by sufficient cause for not filing the condonation petition. The Ld. CIT(A) was directed to reconsider the appeal after providing a hearing and the assessee was directed to file the condonation petition and pay Rs. 5,000/- to the Prime Minister National Relief Fund. For AY 2018-19, the Tribunal found sufficient cause for the 28-day delay due to a medical emergency and condoned the delay. The matter was remanded to the Ld. CIT(A) to decide the issues on merits after providing an opportunity of hearing, with a direction to the assessee to pay Rs. 5,000/- to the Prime Minister National Relief Fund for their lackadaisical approach. The ratio is that procedural delays, if sufficiently explained, should not preclude an assessee from getting a decision on merits, especially when the original assessment was ex-parte.
The Tribunal acknowledged that the ground challenging the jurisdiction of the FAO and the validity of the assessment order, in light of the reassessment notice issued by the JAO, is sub-judice before various High Courts due to the retrospective amendment to Section 147A of the Act. As requested by the assessee's counsel and agreed by the revenue, this ground has been kept open to be decided at an appropriate stage. Both parties are at liberty to restore the appeal on this ground if they wish to pursue it after the outcome of the pending High Court appeals. Regarding the other grounds challenging the disallowance of exemption under Section 54F, the assessee's counsel stated at bar that the assessee does not wish to press these grounds. Consequently, these grounds were dismissed as not pressed. The appeal filed by the assessee is dismissed in terms of these observations.
The Tribunal decided to remit the matter back to the Assessing Officer (AO). The Tribunal noted that the AO made the disallowance under Section 40(a)(ia) because the seller, M/s Blue Star Trading Co., did not comply with a notice under Section 133(6), and TCS was not reflected in the assessee's Form 26AS. The assessee deposited the TDS on 17.03.2025, after receiving a show cause notice. The AO viewed the disallowance and subsequent TDS payment as operating in different spheres. Crucially, a subsequent order dated 25.06.2025 by the ITO(TDS) declared the assessee not to be an assessee in default, stating that the payee had filed their return and the assessee had paid interest. This information was not available to the AO at the time of assessment or to the CIT(A) when confirming the addition. The Tribunal held that these subsequent developments, including the TDS Officer's order and interest payment, should be considered by the AO. Therefore, the matter was remitted to the jurisdictional AO to pass an appropriate order on whether the disallowance under Section 40(a)(ia) is to be made, after affording the appellant a reasonable opportunity of being heard.