The most important stories on the Income Tax Appellate Tribunal (ITAT) that were published at Taxscan between October 29 and November 4, 2023, are critically summarized in this Round-Up.
The Income Tax Appellate Tribunal (ITAT) Hyderabad bench OF R.K. Panda, (Vice President) and Laliet Kumar, (Judicial Member) held that insurance activities carried out by cooperative society did not fall with banking business. Therefore, the bench upheld the disallowance of deduction claimed by the assessee under Section 80P of the Income Tax Act, 1961
The bench determined that activities of the insurance do not form a part and parcel of carrying on the business of banking and providing credit facilities to its members
The Income Tax Appellate Tribunal (ITAT) Mumbai bench of f Amarjit Singh (Accountant Member ) and Aby T. Varkey, (Judicial Member) deleted the penalty imposed under Section 271(1)(c) of the Income Tax Act ,1961 on estimated quantum addition based upon information from the sales Tax Department.
The basis of estimated addition in the quantum assessment was based upon information from the Sales Tax Department that the assessee was a beneficiary of accommodation bills to the tune of Rs.2,35,64,090/- The quantum addition was purely on estimated basis .
In a major relief to M/s. Tata Chemicals Ltd, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), ruled that on failure of comparable as chosen by the Dispute Resolution Panel (DRP), then same loses comparability for determining the arms length price (ALP).
A Two-Member Bench comprising Padmavathy S, Accountant Member and Amit Shukla, Judicial Member observed that ,once only comparable as chosen by the ld. DRP fails, then same loses the comparability for determining the ALP. In view of aforesaid discussion, we hold that the price on which eligible unit is selling the power, i.e., at Rs.6.90 per unit which is the price available in the open market and also the same manufacturing unit is purchasing it from GEB at the same price, then it can be said to be the market value of the price. Accordingly, addition / disallowance of deduction made by the CIT (A) is deleted.”
The Income Tax Appellate Tribunal (ITAT), Mumbai bench of B.R. Baskaran (Accountant member) and Rahul Chaudhary (Judicial Member) held that an addition under Section 68 of the Income Tax Act, 1961, should not be made when share application money received from companies engaged in the business of share trading is proven with documents.
The bench observed that addition under Section 68 of the Income Tax Act could not be made once the assessee had produced the documents to prove the cash credits.
The Income Tax Appellate Tribunal (ITAT), Delhi bench, upheld the addition made under Section 56(2)(vii)(b) of the Income Tax Act, 1961, towards the difference between the circle rate and the actual amount paid for the purchase of land.
The bench of M. Balaganesh (Accountant member) and Chandra Mohan Garg (Judicial Member) observed that the land was purchased by the assessee and his brother on 10.12.2013 during F.Y. 2013-14, and even after the lapse of 3 years up to A.Y. 2015-16, except signing the MOU, no other action had been taken by the assessee and his brother, showing their intention to develop the land as a business venture.
The Income Tax Appellate Tribunal (ITAT), Pune bench, directed a reexamination in respect of activities conducted by the assessee trust to obtain registration under Section 12AA of the Income Tax Act, 1961.
The purpose of the provisions for the registration of trusts under Section 12AA and the granting of exemptions under Section 80G is derived from the Directive Principles of State Policy enshrined in the Constitution of India. These provisions enhance socio-economic welfare in society.
The two-member bench of M. Balaganesh (Accountant Member) and Chandra Mohan Garg (Judicial Member) directed that one final opportunity should be provided to the assessee to file the relevant details before the CIT(E).
The Delhi two-member Bench of Chandra Mohan Garg, (Judicial Member) and Pradip Kumar Kedia, (Accountant Member) Income Tax Appellate Tribunal (ITAT) has directed re-adjudication as non-issuance of show cause notice as to dissatisfaction on insufficient evidence was a sufficient cause preventing from filing additional evidence.
The bench observed that the Assessing Officer, taking on record said evidence but without any examination or verification thereof, directly proceeded to hold that the assessee had not been able to prove identity & creditworthiness of subscriber and genuineness of transaction.
Thus In case the Assessing Officer was not satisfied with the documentary evidence submitted by the assessee then it was his duty to caution the assessee by way of show cause notice or note sheet entry showing his intention and dissatisfaction about insufficient of evidence and absence of details and plausible explanation, but the Assessing Officer directly proceeded make addition under Section 68 of the Income Tax Act without any efforts.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has confirmed the addition as the commission charged by Assessing Officer (AO) was considering the market trend in providing accommodation entries and not on an ad-hoc basis.
The two-member Bench of C. M. Garg, (Judicial Member) B. R. R. Kumar, (Accountant Member) held that the commission charged by the Assessing Officer was not on an ad-hoc basis but taking into consideration the prevailing market trend in providing such accommodation entries.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition as the assessment order was framed under Section 153A of the Income Tax Act 1961 based upon the documents recovered by the search from the 3rd party without following the procedures as per Section 153C of the Income Tax Act.
The two-member Bench of Shamim Yahya, (Accountant Member) and Yogesh Kumar Us, (Judicial Member) observed that having not followed the mandate of section 153C of the Act, Revenue had committed fatal error and, on this account, assessment was liable to be quashed
The Income Tax Appellate Tribunal (ITAT), Chennai bench, directed the Assessing Officer to reduce the addition due to the failure to prove the source of the cash deposit made in Canara Bank by the assessee and the income tax department.
the two-member bench of Manjunatha. G (Accountant Member) and V. Durga Rao (Judicial Member) observed that the CIT(A) did not provide any persuasive justification for rejecting the assessee’s submitted evidence. Additionally, the assessee was unable to provide other proof to support the alleged gift deed, such as her husband’s source.
The Income Tax Appellate Tribunal (ITAT), Chandigarh bench, held that no addition could be made under Section 153A of the Income Tax Act, 1961, in the absence of incriminating material found during the course of a search conducted under Section 132 of the Income Tax Act.
two-member bench of Vikram Singh Yadav (Accountant member) and Aakash Deep Jain (Vice President) observed that no addition can be made in respect of completed assessments in the absence of any incriminating material.
The Income Tax Appellate Tribunal (ITAT), Chennai bench, directed the deposit cost of rupees 5,000/- to the State Legal Aid Authority due to non-appearance before the lower authorities for appeal proceedings.
Tribunal observed that when the litigants do not pursue or prosecute their appeals with utmost honesty, the appellate authority is left with no option but to decide the appeals on their merits. The appeals of the assessee have been dismissed on technical grounds, without any proper petition from the assessee.
The Income Tax Appellate Tribunal (ITAT), Delhi bench, quashed reassessment proceedings initiated under section 147 of the Income Tax Act, 1961, on the basis of a vague report from the investigation wing without applying their mind to the report.
The two-member bench of Pradip Kumar Kedia (Accountant member) and Chandra Mohan Garg (Judicial Member) observed that the Assessing Officer proceeded to initiate reassessment proceedings only on the basis of a vague report from the Investigation Wing without applying their mind to the report and other alleged documentary evidence
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, held that assessing officers could not pass a final assessment order without complying with the mandatory requirements under Section 144C of the Income Tax Act, 1961. Therefore, the Bench allowed the appeal filed by the assessee.
The two-member bench of N.K. Billaiya (Accountant Member) and Astha Chandra (Judicial Member) observed that While framing the said draft assessment order, the Assessing Officer not only issued and served a demand notice but also initiated the penalty proceedings. Thus, without hesitation, the tribunal declared that the proceedings came to an end on June 28, 2022, when the assessee received a demand notice and a penalty notice under Section 274 of the Act. As a result, any further proceedings and orders are no longer valid.
The Pune Bench of Income Tax Appellate Tribunal (ITAT) has held that registration under Section 12B of Income Tax Act 1961 could not be denied on no-clarification of discrepancies due to non-receipt of notice
The two-member Bench of Partha Sarathi Choudhury, (Judicial Member) and G.D.Padmahshali,(Accountant Member) observed that the purpose of the provisions for registration of trust under Section 12A/12AB of the Income Tax Act and granting of recognition under Section 80G of the Income Tax Act, derives their spirit from Directive Principles of State Policy enshrined in the Constitution of India.
The Income Tax Appellate Tribunal (ITAT), Chennai bench, while dismissing the petition for condonation for delay, held that the appeal filed by the assessee against late fees under Section 2344E of the Income Tax Act, 1961, for the late filing of Tax Deduction at Source return, was delayed by more than 6 years.
The two-member bench of Manoj Kumar Aggarwal (Accountant member) and Mahavir Singh (Vice president) dismissed the petition to condone the delay for filing an appeal against the levy of fees under Section 2344E of the Income Tax Act for the late filing of Tax Deduction at Source. Thus, the delay had occurred for more than 6 years, indicating gross negligence on the part of the assessee.
The Income Tax Appellate Tribunal (ITAT), Surat bench, held that an addition shall not be made under section 68 of the Income Tax Act, 1961 when the creditworthiness of the loan provider through the banking channel is satisfactorily explained.
the two-member bench of Dr. A. L. Saini (Accountant Member) and Pawan Singh (Judicial Member)observed that the assessee had produced confirmation before the AO, signed by the son of the assessee, and the bank statement evidencing the debit in the account of the giver of the loan, Mr. Ishwarbhai D. Patel. Therefore, the creditworthiness of the loan giver, Late Ishwarbhai D. Patel, was established by the assessee.
The Income Tax Appellate Tribunal (ITAT), Surat bench, quashed the revision order passed under section 263 of the Income Tax Act, 1961, without following the natural justice principle in respect of the addition of Fixed assets.
The two-member bench of Dr. A. L. Saini (Accountant Member) and Pawan Singh (Judicial Member) relied upon the decision of the Supreme Court in the case of Malabar Industries Ltd. vs. CIT and observed that every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the revenue.
The Income Tax Appellate Tribunal (ITAT), Surat bench held that no revision order could be passed on issues raised by the PCIT outside the scope of limited scrutiny. Therefore, the bench quashed the revision order.
the two-member bench of Dr. A. L. Saini (Accountant Member) and Pawan Singh (Judicial Member) held that the order passed under Section 143(3) of the Act is neither erroneous nor prejudicial to the revenue, as it was passed after a detailed examination and proper verification of all documents of the subject matter of limited scrutiny.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that receipts from airlines relating to segments booked from India through the non-resident computed reservation system was taxable in India as per the India-Spain Double Taxation Avoidance Agreement (DTAA).
The two-member Bench of G.S. Pannu, (President) and Astha Chandra, (Judicial Member) observed that the impugned issue was squarely covered in favour of the Revenue by series of Tribunal’s order from AYs 1996-97 to 2019-20 in assessee’s own case which had been affirmed by the Delhi High Court. The Bench dismissed this ground of appeal. To Read the full text of the Order CLICK HERE
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has quashed the penalty proceedings as the notice under Section 271(1)(c) of the Income Tax Act 1961 was issued without specifying the charge and striking off the irrelevant limp.
A Single Bench of Challa Nagendra Prasad, (Judicial Member) referred the judgement of High Court in PCIT Vs. Sahara India Life Insurance Co. Ltd. which held that the notice issued by the Assessing Officer was bad in law if it did not specify under which limb of Section 271(1)(c) of the income Tax Act the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has quashed the assessment order framed in the name of deceased assessee.
The two-member Bench of Prashant Maharishi, (Accountant Member) and Sandeep Singh Karhail, (Judicial Member) observed that before the CIT(A), the legal heir of the assessee specifically submitted that the assessee succumbed to cancer on 06/08/2015, in this regard the Death Certificate of the assessee and the medical report were also furnished along with the appeal before the learned CIT(A). Thus, it was evident that the assessee expired much before the passing of the assessment order on 24/02/2016 and even all the notices except dated 24/06/2015 were issued after the death of the assessee on 06/08/2015.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition under Section 69A of the Income Tax Act holding that the excess jewellery found during the search in a wealthy family belonging to a married woman was reasonable.
The two-member Bench of C. M. Garg, (Judicial Member) and B. R. R. Kumar, (Accountant Member) observed that Assessing Officer under Section 69A of the Income Tax Act made addition on account of jewellery found in search of assessee , since assessee belonged to a wealthy family and jewellery was received on occasions from relatives, excess jewellery was very much reasonable and , thus, no addition under section 69A was called for.
The Income Tax Appellate Tribunal (ITAT), Surat bench, quashed the revision order passed under Section 263 of the Income Tax Act, 1961, without following the principle of natural justice in respect of the addition of fixed assets.
the two-member bench of Dr. A. L. Saini (Accountant Member) and Pawan Singh (Judicial Member)Principal Commissioner of Income Tax (PCIT) should provide an opportunity for a hearing to the assessee during revision proceedings. Therefore, failure to provide such an opportunity would render the revisional order legally fragile, not on the grounds of lack of jurisdiction, but on the grounds of the violation of the principles of natural justice.
The Income Tax Appellate Tribunal (ITAT), Surat bench held that deduction on account of bad debts is allowable if bad debt is written off as irrevocable in the books of accounts. Therefore, the bench quashed the revision order.
The two-member bench of Dr. A. L. Saini (Accountant member) and Pawan Singh (Judicial Member) quashed the revision order passed under Section 263 of the Income Tax Act and held that Deduction on account of Bad Debts is allowable if the bad debt is written off as irrecoverable in the books of accounts of the assessee.
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