ITAT Weekly Round-Up

This weekly round-up analytically summarises the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan.in during the previous week from June 3 to 9, 2023.

Relief to Britannia: Revision without Proper Inquiry, ITAT quashes Revision order passed u/s 263 Britannia Industries Ltd. vs Principal Commissioner of Income-tax CITATION: 2022 TAXSCAN (ITAT) 1210

In the case of Britannia Industries Ltd, the Income Tax Appellate Tribunal (ITAT), Kolkata bench has quashed the revision order passed under section 263 since the revision was conducted without proper inquiry. The appellant, Britannia Industries Ltd.is engaged in the business of manufacturing and trading bakery and dairy products. The Pr. CIT while checking the assessment records noted that the appellant had claimed a double deduction of capital expenditure under section 35(1) and section 35(2AB) of the Act which ought to have been disallowed by the AO.

The Coram of Mr. Rajpal Yadav, Vice President,and Mr. Girish Agrawal, Accountant Member has held that “the issues raised by the PCIT in the revisionary proceedings, no action u/s 263 of the Act is justifiable which cannot be sustained under the facts and circumstances of the present case and judicial precedents dealt herein above. We, therefore, quash the impugned order u/s 263 of the Act and allow the grounds raised by the assessee”. Mr. Akkal Dudhwewala and Mr. Sudipta Guha appeared on behalf of the appellant and respondent respectively.

Addition made by AO u/s 68 of IT Act could not made in Absence of any Incriminating Material: ITAT quashes Order DCIT vs Bhavya Pankaj Shah CITATION:   2023 TAXSCAN (ITAT) 1211

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) quashed the order passed by the assessing officer under section 68 of the Income Tax Act,1961 for an addition made in the absence of incriminating material.

Shri Mani Jain and Shri Patreek Jain, the counsels for the assessee contended that the additions made by the assessing officer in these years were related to the sale of shares and estimated commission and noticed that the addition related to the sale of shares already recorded in the books and the commission expenses had been made on an estimated basis. The two-member bench comprising Smt. Kavitha Rajagopal (Judicial) and Shri B.R. Baskaran (Accountant) held that the additions made by the Assessing Officer under section 68 of the Income Tax Act,1961 are liable to be deleted while dismissing the appeal filed by the revenue.

Twin Prerequisites not followed for Invocation of Revisional Powers u/s 263 of IT Act: ITAT quashes Order M/s. Havells India Limited vs PCIT CITATION: 2023 TAXSCAN (ITAT) 1212

The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that no twin prerequisites for invocation of revisional powers under Section 263 of the Income Tax Act, 1961. M/s. Havells India Limited, the appellant assessee had filed an appeal against the revisional order of the Principal Commissioner of Income Tax which was held to be erroneous and prejudicial to the interest of the revenue.
The bench observed that no revenue benefit has been derived from the alleged error in the order and no extra credit had been availed in the later years. The two-member bench comprising Chandra Mohan Garg (Judicial) and Pradip Kumar Kedia( Accountant) held that the revisional order of the commissioner was set aside on the ground that the twin prerequisites for invocation of revisional powers under Section 263 of the Income Tax Act was not available in the present case while allowing the appeal.

Relief to Reliance Infrastructure Limited: ITAT directs AO to Grant Credit of TDS of Rs 40.43 Crores DCIT vs M/s. Reliance Infrastructure Limited CITATION: 2023 TAXSCAN (ITAT) 1213

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) directed the assessing officer to grant the credit of Tax deducted at source (TDS) of Rs. 40.43 crores to the Reliance Infrastructure Limited.
The Bench observed that the deductor had refused to issue a certificate in favour of the assessee due to perceptions and apprehensions and there was no provision or mechanism to enforce such certificate from deductor which lead to denial of credit for TDS. It was also observed that no prescribed form available to make such rectification, leading to legal battles. The two member bench comprising of Amit Shukla (Judicial Member) And Padmavathy S (Accountant Member) directed the assessing officer to grant the Tax deducted at Source (TDS) credit of Rs 40.43 crores to the assessee while dismissing the appeal filed by the revenue.

Land not a Capital Asset but a “Work-in-Progress” for Real Estate Company, Expenses to be treated as Revenue Expenditure: ITAT M/s. Kadavanthara Builders Pvt. Ltd vs Income-tax Officer CITATION: 2023 TAXSCAN (ITAT)1214

The Income Tax Appellate Tribunal (ITAT), Bangalore bench has held that Land is not a Capital Asset but a ‘Work-in-Progress’ for a Real Estate Company. It was also observed that the Expenses incurred in connection with the same shall be treated as Revenue Expenditure.

The single-member tribunal bench of Shri Laxmi Prasad Sahu (Accountant Member) held that the lower authorities have taken wrong view that no business activities have been done after the purchase of land and the value appearing under the head W-I-P are capital assets. It was thus held that the expenditure incurred by the assessee are revenue expenditure and allowed as deduction under Section 37 of the Income Tax Act, 1961. The appeal of the assessee was partly allowed for statistical purpose.

Indexation of Cost of Acquisition for calculation of LTCG is available from the AY in which Consideration is fully paid by Assessee: ITAT Abani Pattanayak vs ACIT CITATION:   2023 TAXSCAN (ITAT) 1215

The Income Tax Appellate Tribunal (ITAT), Cuttack Bench has held that indexation of Cost of Acquisition of property is available for the purpose of computation of Long Term Capital Gain (LTCG) from the assessment year (AY) in which consideration is fully paid by the assessee.
The single bench of Shri. George Mathan (Judicial Member) observed that as per the assessment order itself, the full amount with respect to the cost of acquisition has been paid by the assessee before the year ending 31st March 2007. Once the amount has fully been paid as on the year ending, as per Section 2(47)(v) of the Income Tax Act, 1961, as part performance as required from the side of the assessee, has fully been complied with being the payment of consideration, the indexation would be available to the assessee from the AY 2007-2008 relevant to the FY 2006-2007, the bench further observed. Indexed cost, being the cost of acquisition of the property based on the inflation rate, shall be considered for calculating LTCG on the sale of property under the Act, the bench held. In the result, the appeal of the assessee is partly allowed for statistical purposes.

No Penalty u/s 271AAA on Surrendered Income without Statement recorded under Income Tax Act: ITAT Padam Singhee vs DCIT CITATION:   2023 TAXSCAN (ITAT) 1216

The Income Tax Appellate Tribunal (ITAT), Delhi bench has held that penalty under Section 271AAA of the Income Tax Act, 1961 shall not be attracted on the income surrendered by the assessee if the department failed to record a statement under Section 132(4) of the Income Tax Act during the proceedings.
The two-member bench consisting of Shri. Shamim Yahya (Accountant Member) and Shri. Anubhav Sharma (Judicial Member) observed that where no statement under Section 132(2) is recorded or specific query is made during assessment, for the purpose of Section 271AAA of the Act, then no inference can be drawn that assessee failed to specify the manner in which such income has been derived or substantiates the manner in which the undisclosed income was derived, so as to levy the penalty. It was held that Surrendered income cannot be termed as undisclosed income for the purpose of Section 271AAA of the Income Tax Act, 1961. The appeal of assessee is allowed.

ITAT Deletes Addition on Account of Cash Gifts Received from Mother through Gift Deed in Absence of Contrary Material Sharon Agarwal vs Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1217

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition on account of cash gifts received from mother through gift deed as no contrary material was found.
A Single Bench of B. R. R. Kumar, (Accountant Member) observed that the gift deed had not been disputed by the revenue. The fact of acceptance of the gift had also not been controverted by the (CIT(A)). In the absence of any contrary material by the revenue, the Bench allowed the appeal filed by the assessee and deleted the addition made by the Assessing Officer.

Change of opinion & Change in Method of Accounting by assessee not Deemed Concealment of income: ITAT upholds Deletion of Penalty Income Tax Officer vs M/s. Raviraj Ventures CITATION:   2023 TAXSCAN (ITAT) 1218

The Income Tax Appellate Tribunal (ITAT), Pune Bench has upheld the deletion of penalty under Section 271(l)(c) of the Income Tax Act, 1961 stating that a change of opinion of assessee or a change in the method of accounting followed by the assessee is not a deemed concealment of income.
The two-member bench comprising Shri S. S. Viswanethra Ravi (Judicial Member) and Dr. Dipak P. Ripote (Accountant Member) agreed with CIT(A) that penalty under Section 271(1)(c) of the Income Tax Act, 1961 is not sustainable. Accordingly, all the grounds of appeal raised by Revenue were dismissed.

Penalty u/s 271(1)(c) Cannot be Imposed when Income Determined on Estimate Basis: ITAT ITO vs MOHD. UMAR TIMBER MART CITATION: 2023 TAXSCAN (ITAT) 1219

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the penalty under Section 271(1)(c) of the Income Tax Act could not be imposed when income has been determined on an estimated basis.
The two-member Bench of Amit Shukla, (Judicial Member) and Padmavathy S, (Accountant Member) noted that the penalty under Section 271(1)(c) of the Income Tax Act had been levied on estimation of the gross profit on adhoc basis, at the rate of 12% on alleged bogus purchases and assessee’s explanation had not been rebutted by the AO either during the assessment proceedings or penalty proceedings. The Bench dismissed the appeal filed by the revenue holding the explanation of the Assessee and all the evidence filed before the authorities had neither been rebutted nor been found to be incorrect or the assessee had failed to substantiate the explanation.

ITAT Disallows 25% of Alleged Bogus Purchase on Account of Inflation of Purchase Price Summer Chand Jain vs ITO CITATION:   2023 TAXSCAN (ITAT) 1220

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has disallowed 25% of the alleged bogus purchase on account of inflation of purchase price. The assessee Sumer Chand Jain is an individual who engaged in the business of trading in export handicraft goods and jewellery. For AY 2010-11, the assessee filed his return on 28.09.2010 and it was processed under Section 143(1) of the Income Tax Act. Subsequently, the assessment was reopened.
The two-member bench of Anil Chaturvedi, (Accountant Member) and Astha Chandra, (Judicial Member) observed that the assessee had purchased goods without bills from some other suppliers otherwise sales could not have affected and that he had been benefited by providing margin of grey market. The tribunal following the decision of Vijay Protein Ltd. and Sanjay Oil Cake Industries held that the lower authorities instead of treating the entire impugned purchases as bogus and adding the same to the income of the assessee had rightly restricted the addition to 25% of such purchases.

ITAT deletes Addition on account of Bad Debts claimed in  Profit and Loss Account M/s. Navyug Cottn Company vs ITO CITATION:   2023 TAXSCAN (ITAT) 1221

The Pune bench of Income Tax Appellate Tribunal (ITAT) has recently deleted the addition on account of bad debts claimed in  Profit and loss account. The Assessee Navyug Cotton Company filed an appeal before the tribunal against the order of Commissioner of Income Tax (Appeals)[CIT(A)] in National Faceless Appeal Centre under Section 250 of the Income Tax Act, 1961  in relation to the assessment year 2013-14.
The tribunal observed that the amount of debt claimed as bad had been duly debited by the assessee in its Profit and loss account. The AO pointed was that the assessee could not substantiate the debt turning bad. Furthermore, “it is no more relevant in the backdrop of the amendment to Section 36(1)(vii)of Income Tax Act with effect from 01-04-1989 providing for allowing deduction on simple write off dispensing with the requirement of separately proving that the debt actually became bad.” A single member of the tribunal R.S. Syal, (Vice President) deleted the addition imposed by the assessing officer.

Penalty u/s 271AAB shall  not be levied if search u/s 153A not conducted in Premises of Assessee: ITAT Jorbagh Tea Company vs Assistant Commissioner of Income Tax CITATION: 2023 TAXSCAN (ITAT) 1222

The  Kolkata bench of Income Tax Appellate Tribunal (ITAT) held that the penalty under section 271AAB Income Tax Act, 1961  should not be levied if the search under section 153A Income Tax Act, 1961 is not conducted in premises of assessee. The assessee Jorbagh Tea Company filed an appeal against the order of Commissioner of Income Tax (Appeals) confirming the  penalty of Rs.10,01,500 imposed by the  Assessing Officer (AO) under the Section 271AAB of the Income Tax Act. 
After considering the facts, the bench of Rajpal Yadav (Vice-President) and Manish Borad (Accountant Member) observed that the search had not been conducted upon the assessee, then penalty under Section 271AAB of the Income Tax Act could not be imposed. The assessment in the present case has been framed under the section 153C Income Tax Act, and not under the section 153 Income Tax Act. Therefore, the assessee could not be imposed with penalty under the above provision. Thus the bench allowed the appeal filed by the assessee.

Income from Sale of Agricultural land is not Capital Asset u/s  2(14)(iii) of IT  Act, not Taxable: ITAT ACIT vs Kamlesh Kumar Rathi CITATION:   2023 TAXSCAN (ITAT) 1223

The  Delhi bench of the Income Tax Appellate Tribunal (ITAT) ruled that the income derived from sale of agricultural land is not capital asset under section  2(14)(iii) of Income Tax  Act,1961 . Hence not taxable. Assessee Kamlesh Kumar Rathi, was a resident individual. A search and seizure operation under Section 132 of the Income-Tax Act was conducted against the assessee.
Thus, the two member of Saktijit Dey, (Judicial Member) and M. Balaganesh, (Accountant Member) held that “The Assessing Officer has not controverted the nature and character of land sold. Once, nature and character of land sold is established as agricultural land not to be treated as capital asset u/s. 2(14)(iii) of the Act, any income arising out of sale of such land – whether by way of declared sale consideration or on account of on-money, would partake the character of exempt income”. The bench dismissed the appeal filed by the revenue.

Departmental Authorities cannot Disallow Deduction u/s 35(2AB) of IT Act by ignoring Form 3CL issued by Competent Authority: ITAT Indian Tonners and Developers Ltd vs ACIT CITATION: 2023 TAXSCAN (ITAT) 1224

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) ruled that the departmental authorities cannot disallow deduction under section 35(2AB) of the Income Tax Act, 1961 by ignoring Form 3CL issued by the competent authority.
The two-member bench of Saktijit Dey, (Judicial Member) and M. Balaganesh, (Accountant Member) allowed the appeal of the assessee and held that “When the competent authority has issued Form 3CL entitling the assessee to claim a deduction in respect of both capital and revenue expenditure, which is a mandate under section 35(2AB) of the Act, the departmental authorities cannot disentitle the assessee from availing the deduction by ignoring Form 3CL”

Failure to Produce Evidence as to Astronomical Agricultural Income: ITAT upholds Estimation of Income by AO as Other Source Shri Gopal Agarwal Secunderabad vs Dy. C. I. T CITATION:  2023 TAXSCAN (ITAT) 1225

The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) has upheld the estimation of Income by the Assessing Officer as income from other sources as the assessee had failed to produce the evidence as to agricultural income.
The Bench noted that the income shown from agriculture was astronomical but there was no evidence of purchase of seeds/fertilisers. There was no evidence regarding receipt of amounts pertaining to sales of paddy and teak wood also. Such evidence was neither produced during the assessment proceedings nor during the appellate proceedings. The two-member Bench of R.K. Panda, (Accountant Member) Laliet Kumar, (Judicial Member) upheld the decision of treating some income under the head of other sources.

ITAT Quashes Reassessment based on Vague Information received from Investigation Wing regarding  Transactions in National Multi Commodity Exchange M/s. Gulshan Investment Co. Ltd vs Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1226

The  Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently quashed reassessment based on vague information received from the investigation wing regarding  transactions in National Multi Commodity Exchange (NMCE).
The two member bench of the tribunal comprising Chandra Mohan Garg, (Judicial Member) and M. Balaganesh, (Accountant Member) held that reassessment proceedings are initiated based on vague information received from the Investigation Wing, Kolkata which only gives reasons to suspect and not reason to believe. Thus the bench allowed the appeal filed by the assesee. Sashi Tulsiyan, counsel appeared for the assessee. Maimum Alam, counsel appeared for the revenue. 

Claim of exemption u/s 10(23C)(iiiad) of the Income Tax Act rejected without proper verification: ITAT directs re-adjudication Gossner Theological College Gossner Evengilical Lutheran Church vs Income Tax Officer CITATION: 2023 TAXSCAN (ITAT) 1227

The Ranchi bench of the Income Tax Appellate Tribunal (ITAT) directed re-adjudication since the claim of exemption under section 10(23C)(iiiad) of the Income Tax Act,1961 was rejected without proper verification.
The two-member bench comprising of Shri Sonjoy Sarma (Judicial) and Shri Girish Agrawal(Accountant) for the purpose of proper verification of documents and materials placed on record in respect of anonymous donations as well as the explanation for receipt of hall rent and accommodation so as to allow the claim of exemption under Section10(23C)(iiiad) of the Income Tax Act,1961 while allowing the appeal filed by the assessee.

Bonafide Belief of Interest Income on Bank Deposits Eligible for Deduction u/s 80P : ITAT Deletes Penalty u/s 271(1)(c) Khanpur Vibhag Madhyamik Shala Karmchari Dhiran & Grahak Sahakari Mandali Limited vs A.C.I.T CITATION: 2023 TAXSCAN (ITAT) 1228

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has deleted the penalty under Section 271(1)(c) of the Income Tax Act 1961, as the assessee had the bonafide belief of interest income on the bank deposit was eligible for deduction under Section 80P of the Income Tax Act.
A Single Bench of Suchitra Kamble, (Judicial Member) relied upon the Supreme Court in CIT vs. Reliance Petroproducts (P) Ltd. deleted the penalty under Section 271(1)(c) of the Income Tax Act on failure of furnishing inaccurate particulars of income as the assessee was under bonafide belief that interest income earned on bank deposits was also coming under the purview of claim for deduction under Section 80P of the Income Tax Act.

Penalty can be Imposed when Income Surrendered During Survey Shown in Regular Income Tax Return filed Within Prescribed Time: ITAT DCIT vs NBM Iron & Steel, Trading Pvt. Ltd CITATION:   2023 TAXSCAN (ITAT) 1229

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the penalty could be imposed when the income surrendered during the survey had shown in the regular income-tax return which was filed within the prescribed time.
The two-member Bench of Annapurna Gupta, (Accountant Member) and T.R. Senthil Kumar, (Judicial Member) dismissed the appeal filed by the revenue citing the decision of Delhi High Court in CIT vs. SAS Pharmaceuticals wherein it was held where income surrendered by assessee during survey had been shown by it in its regular income-tax return filed within prescribed time, penalty could be imposed. The Bench upheld the decision of CIT(A), who partly deleted the penalty levied under Section 271(1)(c) of the Income Tax Act.

Co-operative Society involved in Banking Business Not eligible for deduction u/s 80P(2)(a)(i): ITAT Shri Basaveswar Credit Co-op Society Ltd vs Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1230

The Income Tax Appellate Tribunal (ITAT), Bangalore Bench has held that the Cooperative society involved in Banking Business is not eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961.
The single bench of Shri Laxmi Prasad Sahu (Accountant Member) remitted back the issue to the CIT(A) for fresh consideration.  The assessee is given the liberty to give necessary documents for substantiating its case and the CIT(A) is also directed to give a reasonable opportunity of being heard. The appeal of the assessee is allowed for statistical purposes.

Interest Income from Deposits with Nationalized Bank is allowable for Deduction u/s. 80P(2)(a)(i) of I-T Act : ITAT Subordinate Engineers Association MSEB Co. op. Credit Society Ltd vs ITO CITATION:   2023 TAXSCAN (ITAT) 1231

The Pune bench of Income Tax Appellate Tribunal (ITAT) has recently held that interest income earned from deposits kept with nationalized banks is allowable  as deduction under Section 80p(2)(a)(i) of Income Tax Act 1961. The Section 80p(2)(a)(i) of Income Tax Act deals with deduction  provided to cooperative societies upon certain specified income engaged in specific activities such income including the gross total income of society.
In the said case, the Tribunal discussed the contrary views expressed by the Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO allows deduction under Section 80P of Income Tax Act  on interest income. After considering the precedents laid down in the Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit case, the single-member bench of  R.S. Syal, (Vice President) allowed the appeal filed by the assessee.

No Disallowance of Foreign Travel expenses of Company Employees’ Spouses accompanied on Official Tour: ITAT grants relief to Hindustan Unilever M/s Hindustan Unilever Ltd vs Addl. Commissioner of Income Tax CITATION:  2023 TAXSCAN (ITAT) 1232

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently held that foreign traveling expenses of the company employees spouses accompanied on an official tour should not be disallowed. Therefore the bench granted relief to Hindustan Unilever.
The two member bench of Vikas Awasthy, (Judicial Member) and Amarjit Singh, (Accountant Member) allowed the appeal filed by the assessee and observed that identical issue on similar fact has been adjudicated in favour of the assessee in the Assessment Years 1985-86 to 1997-98.

Relief to TATA Power: ITAT deletes Adjustment made Towards Technical Know-How Fees Despite Accepting Entity Level Margins M/s. Tata Power Solar Systems Limited vs ACIT CITATION: 2023 TAXSCAN (ITAT) 1233

The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has granted relief to TATA Power deleting the adjustment made towards technical know-how fees despite accepting the entity-level margins.
The two-member Bench of George George K, (Judicial Member) and Laxmi Prasad Sahu, (Accountant Member) observed that t the TPO had accepted the entity-level margins earned by the assessee but proceeded to make TP adjustment on payment towards technical know-how. The Bench referred to the decision of the Delhi High Court in Sony Ericsson Mobile Communications India (P.) Ltd. Vs. CIT which held that once the revenue accepts the entity-level margins as per the most appropriate method, it would be inappropriate to treat a particular expenditure as a separate international transaction. It was held that such an exercise would lead to unusual and absurd results. In view of the aforesaid judicial pronouncement, the Bench deleted the adjustment made by the TPO towards technical know-how fees despite accepting the entity-level margins.

ITAT upholds Penalty Levied u/s 271D of IT Act for Contravention of Section 269SS for Accepting Loan and Advances other than by way of Account Payee Cheques Love Shoppers Ltd. vs Addl. Commissioner of Income-tax CITATION:   2023 TAXSCAN (ITAT) 1234

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has recently upheld that penalty levied under section 271D of the Income Tax Act 1961 for contravention of Section 269SS of Income Tax Act 1961 for accepting a loan and advances other than by way of account payee cheques.
The tribunal after hearing both sides relied upon the decision of the Mumbai Bench in the case of Deepak Sales & Properties (P) Ltd. observed that “for escaping from the rigours from the Section 269SS of the Act, establishing genuineness or bona fides of the transactions is not sufficient” Further, any amount received by modes other than cheques, as loans or advances, results in a violation of the provisions of Section 269SS of the Act. There is no question of genuineness or bona fides of the transactions coming into the picture. After considering the precedents laid down in the Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit case the two-member bench of Accountant Member Annapurna Gupta and Judicial Member Siddhartha Nautiyal dismissed the appeal filed by the assessee and held that the assessee was unable to establish any reasonable cause for taking cash loans also so as to escape from the levy of penalty under Section 271D of the Income Tax Act in view of Section 273B of the Income Tax Act.

ITAT quashes Assessment Notice not issued by Jurisdictional AO Ballu Sing vs ITO CITATION: 2023 TAXSCAN (ITAT) 1235

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT), quashed assessment notice on the ground that it was not issued by the jurisdictional Assessing Officer (AO). The assessee, Ballu Singh, has raised question of jurisdiction of proceedings which goes to the root of any proceedings.
The Single Member Bench of the Tribunal comprising Kul Bharat, Judicil Member noted that it can be safely inferred that notice under Section 148 of the Income Tax Act was issued by the Authority which has no jurisdiction for the assessee. The Revenue has not brought any order by the Competent Authority whereby the jurisdiction was conferred on the Authority who issued notice under Section 148 of the Income Tax Act. “In the absence of such order, I hold that assessment order passed by the Assessing Officer was based on invalid notice hence, it also vitiated the assessment order in the light of binding precedents as cited by the assessee. The assessment order is hereby, quashed” the Tribunal opined.

Penalty Not Imposable for Non-Submission of Audit Report due to Reasonable Cause u/s 273B of IT Act: ITAT Mohammad Daud vs ITO CITATION:   2023 TAXSCAN (ITAT) 1236

The New Delhi bench of the Income Tax Appellate Tribunal(ITAT) held that no penalty shall be imposed for non-submission of audit reports due to reasonable cause under section 273B of the Income Tax Act, 1961.
The Bench observed that no penalty shall be imposable on the person if he proves that there was reasonable cause for the failure to submit the audit report as provided under section 273B of the Income Tax Act 1961. The two-member bench comprising of Ms Astha Chandra( Judicial) and Shri Shamim Yahya(Accountant) held that the penalty imposed under section 273B of the Income Tax Act, 1961 was not sustained and was liable to be deleted while allowing the appeal filed by the assessee.

ITAT deletes Late filing Fee u/s. 234E of IT Act on the Ground of Limitation Motor Magic Auto Zone vs The ACIT CITATION:   2023 TAXSCAN (ITAT) 1237

The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) deleted the late filing fee under section 234E of the Income Tax Act,1961on the ground of limitation. Motor Magic Auto Zone, the appellant assessee had filed two appeals against the order passed by the Commissioner, New Delhi, relating to assessment years 2013-15.
The two-member bench comprising of Shri Chandra Mohan Garg (Judicial) and Shri M. Balaganesh (Accountant) held that the posting of a late filing fee was against the provision of law and it was liable to be deleted under section 234E of the Income Tax Act,1961. The appeal filed by the assessee was allowed.

Rejection of Depreciation Claim on fixed Assets u/s 32 of IT Act Due to Improper Filing of Depreciation Report: ITAT directs Re-adjudication Zila Sahkari Bank Ltd vs DCIT CITATION:  2023 TAXSCAN (ITAT) 1238

The New Delhi bench of Income Tax Appellate Tribunal (ITAT) directed re-adjudication to assessing officer for the rejection of claim of depreciation on fixed assets under Section 32 of Income Tax Act, 1961 due to improper filing of depreciation report.
The tribunal Bench observed that the action of the lower authorities  invoked the provisions of Section 69 of the Income Tax Act read with Section 115BBE of the Income Tax Act for the purpose of disallowance of claim of depreciation of the assessee, without even understanding and appreciating the fact that the provisions of law. The two member bench comprising of Saktijit Dey (Judicial) and M. Balaganesh (Accountant) directed the assessing officer for re-adjudication to grant the claim of depreciation under Section 32 of Income Tax Act.

TDS Demand on Amount Already Paid Tax Leads to Double Taxation: ITAT deletes Demand u/s 201(1) and 201(1A) of IT Act Mrudulagauri Jaysukhlal Bhalodia vs Income tax Officer CITATION:   2023 TAXSCAN (ITAT) 1239

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) deleted the demand of Tax deducted at source (TDS) on the amount already paid tax under sections 201(1) and 201(1A) of the Income Tax Act,1961 leading to double taxation.
The bench observed that the transferor of the land had paid taxes on the amount received from the assessee, but the receipt had not been disclosed in the income tax returnwhich raised the demand for non-deduction of TDS. A single-member bench comprising of Shri Waseem Ahmed( Accountant) held that no demand can be raised under section 201(1) of the Income Tax Act,1961 while allowing the appeal filed by the assessee.

ITAT deletes Penalty u/s 271(1)(b) and 272A(1)(b) for Improper Procedure in Issuance of Income Tax Notice  Antony Madassery vs Dy. Commissioner of Income Tax CITATION: 2023 TAXSCAN (ITAT) 1240

The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT) recently deleted the penalty under Sections 271(1)(b) and 272A(1)(b) of the Income Tax Act due to improper procedure in issuance of notice.

The Bench, consisting of Judicial Member Anikesh Benerjee and Accountant Member M L Meena observed that the case was  squarely applicable to the decision in case of Navjeevan Charitable Society V. DCIT Central Circle-1, Jalandhar, that held as the Assessing Officer  had written a letter to  Surendra Mahajan and Associates for special audit of four case including the appellants but, the Assessing Officer  had never issue a specific notice with points of special audit to the appellant assessee under Section 142(2A) of the Income Tax  Act with the Approval of the PCIT. The Assessing Officer had never issued a specific notice with points of special audit to the appellant assessee under Section 142(2A) of the Income Tax Act with the Approval of the PCIT. Therefore, the order of the CIT (A) confirming levy of penalty under Section 271(1)(b) and 272A(1)(b) by observing non-compliance to direction under Section  142(2A) of the Income Tax Act is perverse to the fact on record. On parity of facts, following the Coordinate Bench’s decision in “Navjeevan Charitable Society”, the Bench held that the impugned orders were infirm and perverse to facts on record. Accordingly, the impugned orders were set aside and the penalties levied under Sections 271(1)(b) and 272A(1)(b) of the Income Tax Act were deleted. In result, the appeals filed by assessee were allowed.

ITAT deletes Penalty u/s 271A for Estimation-Based Addition and Lack of Reference to Assessee’s Books Mohammed Rahimuddin vs Income Tax Officer CITATION: 2023 TAXSCAN (ITAT) 1241

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) recently deleted the penalty under Section 271 A for estimation-based addition with a lack of reference to the Assessee’s books.

The Single Bench consisting of a Judicial Member K Narasimha Chari observed that clause (b) of sub-Section (6) of Section 270A of the Income Tax Act refers to the amount of under-reported income determined on the basis of an estimate of the accounts is correct and complete to the satisfaction of the Assessing Officer. The Bench further added that the addition made in this case, without reference to the books of the assessee, but on the basis of estimation, therefore, cannot provide the foundation for under-reported income for the purpose of levy of penalty under Section 270A of the Income Tax Act. It was squarely similar to the case, Jaibalaji Business Corporation (P.) Ltd. vs. ACIT [2023]. As a result, the appeal of the assessee was allowed.

No Addition u/s 69A of Income Tax Act when Source of Income duly explained during  Assessment: ITAT quashes Order Ram Kishan vs ITO CITATION: 2023 TAXSCAN (ITAT) 1242

The New Delhi bench of Income Tax Appellate Tribunal (ITAT) held that no addition can be made under Section 69A of Income Tax Act, 1961 when the source of cash deposit was duly explained during the assessment.

The Bench observed that the assessee had successfully demonstrated with supporting evidence source of cash deposit to his bank account under consideration and  no addition was required to be made in the hands of assessee and therefore the addition was liable to be deleted. A single member bench comprising of Chandra Mohan Garg (Judicial Member) held that the addition made under Section 69A of Income Tax Act, 1961 was against provisions of law while allowing the appeal filed by the assessee.

No Addition on Unexplained Income received as Gift from Family Members: ITAT directs Re-Adjudication Shri Hemant Pandya vs ITO CITATION:   2023 TAXSCAN (ITAT) 1243

The Indore bench of Income Tax Appellate Tribunal (ITAT) held that no addition can be made on unexplained income which was received as gift from the family members for personal use.

The two member bench comprising of Vijay Pal Rao (Judicial Member) and B.M. Biyani (Accountant Member) held that gift received from family members, namely father and mother for personal use which do not required any special occasion like birthday, marriage, etc and the affidavit given by donors, being father and mother, themselves explained that they made gifts to assessee for “personal use”. The bench directed the assessing officer to re-adjudicate to delete the addition made under Section 69A of Income Tax Act, 1961 while allowing the appeal filed by the assessee.

Penalty imposed u/s 270A of Income Tax Act on Non-Disclosure of Interest Income in ROI is valid: ITAT BLPL Singapore Pte Ltd vs DCIT(Intl Tax) CITATION:   2023 TAXSCAN (ITAT) 1244

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the penalty imposed under Section 270A of the Income Tax Act, 1961 on grounds of non-disclosure of interest income in Return of Income (ROI) is valid.

The two-member bench comprising B.R. Baskaran (Accountant Member) and Pavan Kumar Gadale (Judicial Member) observed that a penalty order was passed by the Assessing Officer, Tax Circle at Mumbai, Whereas under the Provisions of 253(1)(a) of the Income Tax Act, 1961, the appeal to the appellate tribunal was filed against the order passed by the Commissioner of Income Tax Appeals under Section 270A of the Income Tax Act, 1961 by the Assessee. It was also held that the penalty imposed by the assessing officer was valid and according to the relevant provisions of law. Thus, the appeal filed by the assessee was dismissed.

Co-operative Societies Eligible for Exemption u/s 80P(2)(d) of Income Tax Act on interest on investments in Co-operative Banks: ITAT M/s. University of Agricultural Employees House Building Co-op Society Ltd. vs The Assistant Commissioner of Income Tax CITATION:   2023 TAXSCAN (ITAT) 1245

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT), held that Co-operative Societies are eligible for Exemption under Section 80P(2)(d) of the Income Tax Act, 1961 on the interest income received by it from investments made in Co-operative Banks.

The two-member bench of Chandra Poojari (Accountant Member) and Beena Pillai (Judicial Member) observed that Section 80P(2)(d) of the Income Tax Act, 1961 allows deduction in respect of any income by way of interest or dividends derived by the Co-operative society from its investments with any other cooperative society. The bench also noted that there was no stipulation or prerequisite in the provision regarding the nature of the funds. The bench referred to decisions of the Supreme Court and the High Court and held that the deduction under Section 80P(2)(d) of the Income Tax Act, 1961 applies to all cooperative societies, regardless of their main business activity. The bench allowed the appeal, setting aside the order of CIT(A) and restored the issue to AO for de novo consideration.

ITAT confirms Penalty for Deliberate Concealment of Income u/s 271(1)(c) Shri Shavva Sudheer Reddy vs Asstt.. C. I. T. CITATION:   2023 TAXSCAN (ITAT) 1246

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) recently confirmed the penalty for deliberate income concealment under Section 271(1)(c) of the Income Tax Act.

The Bench consisting of Judicial Member Laliet Kumar and Accountant Member R.K. Panda observed that the assessee had failed to explain the source of the undisclosed investment of Rs. 30,50,000/- for property purchase and Rs. 6 lakhs for villa interiors. The explanation of the assessee was that the undisclosed investment offered to avoid litigation was rejected since it was a result of the search and incriminating evidence. The confirmation from M/s. Trident Constructions was deemed unhelpful due to its updated nature and the fact that the assessee had already paid Rs. 50 lakhs without explaining the source, the tribunal bench noted. The Bench further added that the additions made under Section 69B of the Income Tax Act were not voluntary but based on seized material during the assessment proceedings. Therefore, the penalty imposed by the Assessing Officer and upheld by the CIT(A) was observed to be justifiable by the tribunal. As a result, the appeal filed by the assessee was dismissed by the ITAT.

Difference in Income Declaration by Assessee and AO does not Amount to Furnishing Inaccurate Particulars: ITAT deletes Penalty u/s 271(1)(c) M/s. Standard Radiators Private Ltd vs A.C.I.T CITATION:  2023 TAXSCAN (ITAT) 1247

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has deleted the penalty under Section 271(1)(c) of the Income Tax Act, 1961 holding that the difference in income declaration by assessee and Assessing Officer would not amount to furnishing inaccurate particulars.

The two-member Bench of Waseem Ahmed, (Accountant Member) and Siddhartha Nautiyal, (Judicial Member) observed that no allegation evidencing that the amount of expenses claimed by the appellant assessee was genuine or correct. As such, the AO had disallowed the same only for the reason that the interest expense was capital in nature. The Bench thus deleted the penalty levied under Section 271(1)(c) of the Income Tax Act holding that AO had calculated different total income than the income declared by the assessee and the difference between the income declared by assessee and assessed by the AO would not amount to furnishing of inaccurate particulars of income or concealment of income per say.

Notice Received via Email Despite For m No. 35 Request for Physical Service of Notice: ITAT sets aside Ex-Parte Order Jayshree Kamleshkumar Patel vs Income Tax Officer CITATION:  2023 TAXSCAN (ITAT) 1248

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has set aside the exparte order as the notice was received via email despite the request for physical service of notice in Form No.35.

The two-member Bench of Waseem Ahmed, (Accountant Member) and T.R. Senthil Kumar, (Judicial Member) observed that the assessee had clearly mentioned “not to send” notices and communications by email, but the notices were sent by email and not by physically. The Bench thus ordered to provide due opportunity to the assessee.

No addition can be made  on Absence of Corroborative and Supporting Evidence regarding Satakat found during survey of Third Party Business Premises: ITAT Mukesh Agarwal vs Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1249

The  Surat bench of Income Tax Appellate Tribunal (ITAT) has recently held that no addition could  be made  on absence of corroborative and supporting evidence regarding satakat found during  survey of third party business premises.

The tribunal observed that the Assessing Officer solely relied upon the documents found at the business premises of third-party. The Assessing Officer neither called upon Vasudev Goplani, Advocate during re-assessment proceedings nor made any independent investigation on fact from the purchasers namely Niral Apoorva Bhatu. Thus the AO made the addition in absence of corroborative and supporting evidence. Therefore the single member bench of Pawan Singh, (Judicial Member) deleted the addition made by the lower Authority. Jaikishan Goel, appeared for the assessee. Vinod Kumar, appeared for the revenue.

AMP expenditure for Promotion and Marketing Products Manufactured by assessee  not International Transaction: ITAT Herbalife International India Pvt. Ltd. vs Deputy Commissioner of Income Tax CITATION:   2023 TAXSCAN (ITAT) 1250

The   Bangalore bench of Income Tax Appellate Tribunal (ITAT) has recently held that Advertising Marketing Price (AMP) expenditure incurred for promoting and marketing the product manufactured by assessee, does not come within purview of international transaction.

The two member bench of Beena Pillai, (Judicial Member) and Padmavathy S, (Accountant Member) determined that “The expenditure incurred by assessee is to carry out its day to day business activity of distribution and are directly linked with the business carried out by assessee in India”. Thus, the tribunal bench allowed the appeal filed by the assessee. 

ITAT deletes Addition made by disallowance of Interest Expenses accrued from Investment made in Shares and Securities Hitesh Shantilal Mehta vs Deputy Commissioner of Income Tax CC-4 (1) CITATION:   2023 TAXSCAN (ITAT) 1251

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently deleted an addition made on account of disallowance of interest expenses accrued on account of investment made in shares and securities. The appeal was filed by assessee Hitesh Shantilal Mehta against the orders passed by the Commissioner of Income Tax (Appeals) for the Assessment Year 1993-94.

It was pointed out by the tribunal that, while adjudicating this issue in assessee’s appeal for assessment year 2012-13 has observed that the assesee’s ground is similar to ground no. 1 raised in the case of Sudhir S. Mehta in for assessment year 2009-10. The tribunal further observed that while deciding the issue of liability of interest expenses in the case of Sudhir S. Mehta  the bench had concluded as follows, “In view of our aforesaid discussion we set aside the order of the CIT(A) and direct the AO to allow deduction in respect of said interest accrued and calculated at 12% per annum amounting to Rs.2,64,72,208/- after disallowing proportionate interest in respect of the investment in shares amounting to Rs.3,51,176/- after verifying the calculation of the interest quantification.” The two member bench of Vikas Awasthy, (Judicial Member) and Amarjit Singh, (Accountant Member) allowed the appeal filed by the assessee and deleted the addition made by the AO.

FCCB issue expenses included as part of FCCB Premium Expenses allowable as Deduction: ITAT M/s Strides Arcolab Limited vs The Deputy Commissioner of Income Tax CITATION: 2023 TAXSCAN (ITAT) 1252

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has recently held that Foreign Currency Convertible Bond (FCCB) issue expenses included as part of Foreign Currency Convertible Bond (FCCB) premium expenses  are allowable as deduction.

After considering the facts and circumstances the tribunal observed that issue of disallowance of FCCB issue expenses have also been considered by the co-ordinate bench in assessee’s own case for assessment year 2008-09 and the relevant part of the decision have been extracted in the earlier part of this order. Therefore the two member bench of Amit Shukla (Judicial Member) and Padmavathy S (Accountant Member) allowed the appeal filed by the assessee.

Reassessment Proceedings u/s 147 of IT Act completed without Proper Hearing : ITAT directs Re-adjudication SMT. RAKHI GAUTAM vs ITO CITATION:   2023 TAXSCAN (ITAT) 1253

The Indore bench of Income Tax Appellate Tribunal (ITAT) directed re adjudication to the assessing officer for the completion of reassessment under Section 147 of Income Tax Act, 1961 without proper hearing. Rakhi Gautam, the appellant assessee filed appeal against the order of Commissioner of Income Tax (Appeals) for confirming yhe addition made by assessing officer in reassessment proceedings under Section 147 of the Income Tax Act, 1961.

The two member bench comprising of Vijay Pal Rao (Judicial Member) and B.M. Biyani (Accountant Member) held that the assessee was not aware of the notices issued by the Commissioner due to the fact that they were issued to their registered email ID. It was also observed that the assessee was given one more opportunity to present her case before the Commissioner and the matter was remanded to the Commissioner for fresh adjudication while allowing the appeal filed by the assessee.

ITAT quashes Order for deleting Disallowance of Educational Cess Claim u/s 115JB of IT Act without Proper Verification M/s. Srei Infrastructure Finance Limited vs Assistant Commissioner of Income Tax CITATION:   2023 TAXSCAN (ITAT) 1254

The Kolkata bench of Income Tax Appellate Tribunal (ITAT) quashed the order passed by the commissioner of income tax( appeals) for deleting the disallowance of education cess claim made by the assessing officer under Section 115JB of Income Tax Act, 1961 without proper verification.

The two member bench comprising of Sanjay Garg (Judicial Member) and  Girish Agrawal (Accountant Member) held that they does not find any justification on the part of commissioner in deleting the impugned disallowance made by the  assessing officer while computing the book profit under Section 115JB of the Income Tax Act, 1961 and are liable to be quashed. It was also held that the disallowance of educational cess claim made by the assessing officer is valid under Section 115JB of Income Tax Act, 1961 while dismissing the appeal filed by the assessee.

No addition can be made on Sponsorship Contributions received from Friends and Relatives: ITAT Bhagyashree Manohar Sawant vs ITO CITATION:   2023 TAXSCAN (ITAT) 1255

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently held that no addition could be made on sponsorship contributions received from friends and relatives.

It was observed by the tribunal that e assessee is filling the application for admission of additional evidences under Rule 29 of ITAT rules with the sponsorship confirmation from ICICI Lombard General Insurance, Sponsorship amount confirmation from Central Bank Of India, and confirmations of friends and relatives who have sponsored the mountaineering event, which were not available earlier and could not produce before the lower authorities. It was also pointed out that evidence plays an important role in decision making in the adjudicating proceedings. Thus the bench opinion that the assessee should not suffer for non-filing of material information, as the evidence played a vital role in decision making and we admit the additional evidence. Therefore, the two member bench of Pavan Kumar Gadale (Judicial Member) and Padmavathy S (Accountant Member) restored the entire disputed issues along with the additional evidence to the file of the assessing officer and allowed the appeal.

Relief to Sabre Travel Network (India) : ITAT deletes Additions of Foreign Exchange Loss incurred from Marketing Services  Sabre Travel Network (India) Pvt. Ltd vs Deputy Commissioner of Income Tax CITATION:   2023 TAXSCAN (ITAT) 1256

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently while providing relief to  Sabre Travel Network (India) deleted additions made on account of foreign exchange loss incurred from marketing services.

The two-member bench of Vikas Awasthy (Judicial Member) and Gagan Goyal (Accountant Member) allowed the appeal filed by the assessee and observed that the assessee had been claiming foreign exchange loss in the past and the AO has consistently disallowed the same. The Tribunal in by the assessee has allowed foreign exchange loss in the past. In Assessment Year 2013-14, the Co-ordinate Bench had followed the order of Tribunal in assessee’s own case allowing deduction towards foreign exchange loss.

ITAT upholds Disallowance Towards Late Deposit of Employees Contribution to PF/ESIC u/s 36(i)(va) of IT Act Naveen Chandra Bhatt vs ITO CITATION:   2023 TAXSCAN (ITAT) 1257

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has upheld the disallowance towards late deposit of employees’ contribution to Provident Fund or Employees State Insurance Corporation (PF/ESIC) under Section 36(i)(va) of the Income Tax Act 1961.

He further contended that the delayed deposit of employees’ contribution indicated in the Audit Report was sufficient for adjustment under Section 143(1) of the Income Tax Act, as held by the Pune Bench of the Tribunal in the case of Cemetile Industries vs ITO. A Single Bench of Chandra Mohan Garg, (Judicial Member) upheld the action of revenue holding that the issue towards taxability of belated employees’ contribution to Provident Fund/ESIC was no longer res integra in the light of the judgement of Supreme Court in the case of Checkmate Services (P.) Ltd. vs CIT

Mandatory Notice u/s 143(2) of Income Tax Act not served: ITAT quashes Order Rajiv Gandhi University of Health Sciences vs The Assistant Commissioner of Income-tax CITATION:   2023 TAXSCAN (ITAT) 1258

The Income Tax Appellate Tribunal (ITAT), Bangalore Bench has quashed the Assessment Order of the Commissioner of Income Tax (Appeals) (CIT(A)) for the reason that a mandatory notice under Section 143(2) of the Income Tax Act, 1961 was not served to the assessee prior to the completion of the assessment proceedings.

The two-member bench consisting of Shri. Laxmi Prasad Sahu (Accountant Member) and Shri. George George K (Judicial Member) has set aside the assessment order. In conclusion, the appeal filed by the assessee was allowed, and the assessment order was set aside due to the non-service of the mandatory notice under section 143(2) of the Income Tax Act.

Oil Wells Eligible for Depreciation as Plant and Machinery: ITAT Joshi Technologies International Inc vs The Asst. Director of Income Tax CITATION:   2023 TAXSCAN (ITAT) 1259

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the oil wells are eligible for depreciation as plant and machinery. The assessee company, Joshi Technologies International Inc was engaged in exploration of crude oil from Dholka and Weevil oil fields. The crude was exported to ONGC Central Storage for further refining process. For the impugned assessment year, the assessee filed return of income declaring “Nil” total income.

The Division Bench of Annapurna Gupta, (Accountant Member) and Siddhartha Nautiyal, (Judicial Member) allowed the appeal filed by the assessee following the decision of assessee’s own case in which oil wells were eligible for depreciation as “plant and machinery”. The Bench directed AO to re-compute the depreciation on “oil wells” on opening WDV.

Addition of Rental Income under “Income from Other Sources” Invalid as already declared under “Income from House Property”: ITAT Strikes Down Double Taxation Shri Dinesh Kumar Singal vs ITO CITATION:   2023 TAXSCAN (ITAT) 1260

The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench has invalidated the addition of rental income under the head “Income from Other Sources” wherein the assessee has already offered the same to tax under the head “Income from House Property.” The decision effectively strikes down the case of double taxation of the same income imposed on the assessee.

The two-member bench consisting of Aakash Deep Jain (Vice President) and Vikram Singh Yadav (Accountant Member) has directed to delete the addition made by CPC and confirmed by CIT(A) as it resulted in double taxation of the same income. The appeal of the assessee was allowed for statistical purposes.

Delay in Filing Form 10B can be Condoned only when it was filed Before “Due Date” of Filing of Return of Income u/s.139: ITAT Shri Jain Shwetamber Murtipujak Sangh vs Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1261

The Raipur bench of the Income Tax Appellate Tribunal (ITAT) has held that delay in filing Form 10B can be condoned only when it was filed before the “due date” of filing of return of income under section 139 of the Income Tax Act, 1961

A single-member bench comprising Ravish Sood, Judicial Member observed that the assessee-trust does not cumulatively satisfy the set of conditions specified in Para 4(i) of the CBDT Circular No.10 (supra), and also had not filed any application for condonation of delay under section 119(2)(b) of the Income Tax Act as provided in Para 4(ii) of the said circular, therefore, there remains no occasion for condoning the delay involved in the filing of Form 10B by the assessee beyond the stipulated period. The ITAT upheld the declining of the assessee’s claim for exemption under Section 11 of the Income Tax Act, but at the same time, restored the matter to the file of the A.O with a direction to consider the assessee’s claim for deduction of expenses as debited in the income and expenditure account.

Moratorium Declared by NCLT in View of Insolvency & Bankruptcy Code has Overriding Effect on Tribunal: ITAT DCIT vs UM Green Lighting P. Ltd CITATION:  2023 TAXSCAN (ITAT) 1262

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the moratorium declared by National Company Law Tribunal, (NCLT) has an overriding effect on the tribunal in view of insolvency and bankruptcy code.

The two member Bench of Chandra Mohan Garg, (Judicial Member) and Pradip Kumar Kedia, (Accountant Member) dismissed the appeal filed by the revenue and the assessee was estopped to pursue the captioned appeal in the light of decision of the Supreme Court CIT Vs. Monnet Ispat and Energy Limited and also in the light of the overriding provision of the code. The Bench further observed that, “In view of the moratorium declared by NCLT, all proceedings in the court of law, Tribunal etc. cannot continue in view of the overriding provisions of Insolvency & Bankruptcy Code as recognized in Section 178(6) of the Act.”

PCIT wrongly invokes Revisionary Powers u/s 263 of IT Act on order issued by AO with Sufficient Enquiry: ITAT revives Assessment Order Synergy India vs The Pr. CIT-1 CITATION: 2023 TAXSCAN (ITAT) 1263

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) recently revived the assessment order and held that it was not justified for the PCIT to invoke the revisionary powers under Section 263 of the Income Tax Act. This decision was based on the evidence in the record, which showed that the Assessing Officer had conducted a thorough enquiry and passed the assessment order with due application of mind.

The Bench consisting of a Vice President A D Jain and an Accountant Member Vikram Singh Yadav observed that it was amply clear that due enquiry was carried out by the Assessing Officer in the Assessee’s case during the scrutiny proceedings, where-after, the assessment order was passed with due application of mind on requisite verification of the facts and documentary evidence filed concerning the issue of cash deposits. Complete books of account were produced and mention of the same has been made in the reply. The Assessing Officer, thus, took a possible view which could not have been sought to be substituted by the PCIT on a mere change / difference of opinion. The Bench added  that the PCIT was not justified in invoking the revisionary powers under Section 263 of the Income Tax Act, when, as evident from the record, due enquiry had been carried out by the Assessing Officer  and the assessment order was passed with due application of mind by the Assessing Officer. Accordingly, the grievance sought to be raised by the Assessee is found to be justified. Therefore, the assessment order was revived. In result, the appeal filed by assessee was allowed.

Exemption u/s 11 should not be Denied Merely on Account of Delay in Furnishing the Audit Report in Form No. 10B: ITAT The ITO vs Shri Laxmanarayan Dev Shrishan Seva Khendra CITATION:  2023 TAXSCAN (ITAT) 1264

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the exemption under Section 11 of the Income Tax Act 1961 should not be denied merely on account of delay in furnishing the audit report in Form 10B.

The two-member Bench of Waseem Ahmed, (Accountant Member) and T.R. Senthil Kumar, (Judicial Member)  dismissed the appeal filed by Revenue holding that the assessee was eligible for claim of exemption under Section 11 of the Income Tax Act referring to the decision in Social Security Scheme of GICEA.

Disallowance u/s 14A of IT Act shall not exceeds limit of exempted income: ITAT The Dy. Commissioner of Income Tax vs Anant Raj Limited CITATION: 2023 TAXSCAN (ITAT) 1265

The Mumbai bench of Income Tax Appellate Tribunal( ITAT) held that the disallowance under section 14A of Income Tax Act,1961 cannot exceeds the limit of exempted income.

The two member bench comprising of Vikas Awasthy( Judicial ) and Amarjit Singh( Accountant) held that the  disallowance under section 14Aof Income Tax Act cannot exceed the amount of exempt income earned during the year while dismissing the appeal filed by the revenue.

Top Stories Reference made to TPO u/s 92CA of IT Act due to Omission of Law without Saving Clause for Pending Proceedings: ITAT quashes Order Worship Infraprojects Pvt. Ltd. vs The DCIT CITATION: 2023 TAXSCAN (ITAT) 1266

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) held that the reference made to the Transfer Pricing Officer (TPO) under section 92CA of the Income Tax Act, 1961 due to omission of law without a saving clause for pending proceedings was invalid.

The two-member bench comprising of Sandeep Gosain (Judicial) and Rathod Kamlesh Jayantbhai (Accountant) held that the reference made to TPO under section 92CA of Income Tax Act,1961 was invalid and bad in law and hence consequential order passed by the transfer pricing officer and assessing officer was also not sustainable in the eyes of law and are liable to be quashed while allowing the appeal filed by the assessee.

Co-operative Society’s Investment in Co-operative Society’s Fixed Deposit Accounts Eligible for Deduction u/s 80P (2) (d) of IT Act: ITAT The Urapar Coop. Agri.Service Society Ltd vs The Asstt. Commissioner of Income Tax CITATION:   2023 TAXSCAN (ITAT) 1267

The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT) recently held that the investment of a co-operative society  in another co-operative society’ s fixed deposit accounts are eligible for deduction under Section 80 P (2) (d) of Income Tax Act, 1961.

The Bench consisting of a Judicial Member Section 80P (2) (d) and an Accountant Member Dr. M. L. Meena observed that the appellant-assessee was a Co-operative Society and not a Co-operative Bank. The appellant assessee being a Co-operative Society, it is eligible for exemption on its entire interest income received from the investment with a Co-operative Bank as deductible under Section 80P (2) (d) of the Income Tax Act. The Bench further held that since, appellant society being a cooperative society and investment in FDR’s was made in another cooperative Society and hence, it is eligible for deduction under Section 80P (2) (d) of the Income Tax Act. In result, the appeal filed by the assessee was allowed and the addition of Rs. 54,00,164/- was deleted.

Mere Transaction through DMAT Account or Sale of the Shares on Stock Exchange Cannot Rebut S.68: ITAT Randhir Singh Verma vs ITO CITATION:  2023 TAXSCAN (ITAT) 1268

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that mere transaction through dematerialization account (DMAT) or sale of the shares on stock exchange could not be rebutted under Section 68 of the Income Tax Act 1961.

The two-member Bench of  Shamim Yahya, (Accountant Member) and Anubhav Sharma, (Judicial Member) observed that no record was there to show that assessee/ appellant was able to discharge his burden under Section 68 of the Income Tax Act by rebutting the suspicious circumstances raised by the AO. The Bench held that mere transaction through DMAT account or sale of the shares on stock exchange could not be considered to be evidence to rebut the circumstances. The Bench dismissed the appeal filed by assessee as the modus operandi examined by the Tax Authorities remained unrebutted.

Deduction u/s 80P of IT Act cannot Denied Due to Late Filing of ROI : ITAT quashes Order Kishorepur Paschimanchal SKUS Limited vs Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1269

The Kolkata bench of Income Tax Appellate Tribunal( ITAT) held that the deduction under section 80P of Income Tax Act,1961 cannot be denied due to late filing of return of income (ROI).

The two member bench comprising of Sanjay Garg ( Judicial ) and Dr. Manish Borad (Accountant) held that order of the commissioner that the amendment in Section 143(1) made by Finance Act, 2021 which is not applicable for the present case. It was also held that the no hesitation in holding that the assessee cannot be denied the deduction under section 80P of the Income Tax Act on the ground that the return of income was not filed within the due date prescribed under section 139(1) of the Income Tax Act under proceedings made under section 143(1) of the Income Tax Act while allowing the appeal filed by the assessee.

Deduction u/s  54B of IT Act shall not be disallowed, if Agriculture Land convert to Non-Agriculture just before Transfer of Land to Seller: ITAT I.T.O vs Shri Bharatkumar Laljibhai Tejani CITATION:   2023 TAXSCAN (ITAT) 1270

The Surat bench of Income Tax Appellate Tribunal (ITAT) has recently held that deduction under Section 54B of Income Tax Act 1961 should not be disallowed if agricultural land is converted to Non- agriculture just before transfer of land to seller.

It was observed by the tribunal that nature of land was also converted from agriculture to non-agriculture purpose just before transfer of land and the same was considered as a transfer of agricultural land as far as the seller is concerned. Therefore the two member benches of Pawan Singh (Judicial Member) and Dr. Arjun Lal Saini, Accountant Member dismissed the appeal filed by the revenue.

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