Assessee's Appeal Against Rejection of 80G(5)(iii) Approval Remanded for Re-Examination

The assessee challenges the rejection of their application for approval u/s 80G(5)(iii) of the ITA, 1961 by the [CIT(E)], Ahmedabad. The assessee contends that the rejection was based on incorrect grounds, as they had submitted all necessary documents and clarifications in response to the notice issued by CIT(E). After reviewing the submissions, the Tribunal found that the rejection was unjustified and decided to remand the case to CIT(E) for a fresh examination, allowing the assessee an opportunity to be heard and ensuring compliance with the necessary documentation requirements. The appeal was allowed for statistical purposes.

Revenue Appeals CIT(A)’s Decision on Exemptions and LTCG Taxation for AY 2016-17

The appeal in question is filed by the Revenue to challenge the First Appellate order passed by the Ld. CIT(A) on 16.03.2022, which dealt with the disallowance of exemptions u/s 10(34A) and taxation of Long Term Capital Gains (LTCG) u/s 112 of the Income Tax Act, 1961 for the AY 2016-17. The Revenue disputes the Ld. CIT(A)’s decision to allow the exemption and the special tax rate on LTCG, arguing that there were alleged manipulative transactions with unlisted companies. However, the Ld. CIT(A) found the assessee's claims to be valid, dismissing the Revenue's appeal. Additionally, a Cross Objection has been filed by the assessee supporting the Ld. CIT(A)’s decision.

**Assessee Challenges Invalid Assessment Order u/s 147 and 148 of the Income Tax Act**

The final assessment order under section 147 read with section 144 of the ITA, 1961, issued on 22.03.2024 by the ACIT, Circle Int. Tax 1(1)(2), following the directions of the Dispute Resolution Panel-1 u/s 144C(5) for AY 2013-14. The appeal raises issues regarding the validity of the notice u/s 148, arguing it was barred by limitation and lacked a proper opportunity for assessment. The assessee contended a 1/6th share in the property sales, totaling Rs.14,39,500/-, while the Department argued for unexplained investment of Rs.86,27,000/- towards capital gains. The Tribunal ultimately ruled in favor of the assessee, deeming the assessment order illegal and void, setting aside the assessment and directions from the DRP.

ITAT Ahmedabad Grants Reconsideration of Trust Registration Appeal with Rs. 5,000 Cost for Non-Compliance

The assessee appealed against the denial of trust registration u/s 12AB by the CIT(E), Ahmedabad, citing errors in the decision. A 141-day delay in filing the appeal was condoned due to the Managing Director’s academic commitments. The tribunal found inadequate compliance with CIT(E)’s notices and deemed the explanations unsatisfactory. However, to ensure fairness, it imposed a Rs. 5,000 cost on the assessee and remanded the case for reconsideration after payment, granting the trust another opportunity to present its case.

"Revenue Appeal Dismissed: CIT(A) Quashes Assessment for Lack of Incriminating Material"

The appeal by the Revenue arises from the order of the CIT (A)-23, New Delhi, concerning assessment framed by the ACIT u/s 153C r.w.s. 143(3) of the Income Tax Act for the AY 2012-13. The CIT(A) quashed the assessment, ruling that no incriminating material was found during the search to justify the additions made. The Revenue contended that additions were for bogus purchases, but these were not based on seized material. The CIT(A) upheld the quashing of the assessment, as no incriminating evidence was found. Consequently, the Revenue’s appeal was dismissed.

Re-evaluation of Assessee's Appeal: Misconception of Direct Taxes Vivad Se Vishwas Scheme

The appeal originates from an order dated 24.01.2024 by the National Faceless Appeal Centre (CIT(A)), which dismissed the assessee's appeal based on the assumption that the assessee had opted for the Direct Taxes Vivad Se Vishwas scheme and filed the necessary forms. The assessee contested this dismissal, asserting they never applied for the scheme nor submitted any related forms. The assessment involved an addition of Rs.6,15,946.71, including professional fees, advertisement expenses, convenience expenses, and salary expenses. The ld. CIT(A)'s dismissal was deemed erroneous due to a lack of evidence. The case was remanded to CIT(A) for a fresh adjudication on merits, with the appeal allowed for statistical purposes.

Assessee's Appeal for AY 2017-18: Partial Disallowance Upheld

The assessee for AY 2017-18 challenges the decision of the Learned CIT(A)-5, Delhi, concerning the addition made by the AO u/s 143(3) of the ITA. The assessee contested an addition of Rs.6,20,000/- out of Rs.8,90,000/-, which was sustained by the Ld. CIT(A). The assessee argued for the deletion of the entire addition, citing substantial evidence of agricultural income. However, the tribunal, after examining the case, directed a partial disallowance of Rs.62,000/- instead of Rs.6,20,000/-, ensuring normal taxation under the provisions of the ITA.

Revenue Appeals Dismissed Due to Tax Effect Below CBDT's Revised Limit

The Revenue has filed appeals against the orders of the Ld. CIT (Appeals)-27, New Delhi, dated February 25, 2019, for the AYs 2012-13 and 2014-15. The tax effects for these years are Rs. 48,96,376 and Rs. 50,72,235, respectively, both of which fall below the new limit of Rs. 60 lakhs set by the CBDT in Circular No. 09/2024 dated September 17, 2024. The Ld. DR for the Revenue acknowledged this threshold. Consequently, the appeals are deemed not maintainable and are dismissed in accordance with the latest CBDT circular.

"The Chamber of Tax Consultants Challenges Software Changes Preventing Section 87A Rebates for AY 2024-25: Court Extends ITR Filing Deadline to Ensure Fairness"

1. Petition Overview: The Chamber of Tax Consultants filed a PIL challenging modifications in the tax department's software that prevent taxpayers from claiming rebates u/s 87A of the Income Tax Act, 1961, after July 5, 2024, for the AY 2024-25. The petition argues this modification is arbitrary, unjustified, and contrary to legislative intent, causing financial hardship to eligible taxpayers.

2. Key Provisions Discussed:

• Section 87A: Provides a rebate to taxpayers with incomes below specified thresholds, intended to offer relief to low-income groups. For AY 2024-25, a 100% rebate on tax for incomes up to Rs.7 lakh is allowed under the new tax regime.

• Section 115BAC: Introduced an alternate tax regime with lower tax rates but fewer exemptions, which became the default regime unless taxpayers opt otherwise.

3. Petitioner's Arguments:

• Disabling the rebate in the tax-filing utility violates fairness and transparency principles.

• Taxpayers are denied their statutory rights due to software modifications.

• Revised returns under Section 139(5) should be permitted for those unable to claim the rebate.

• The unilateral actions of the tax department undermine public confidence and legislative intent.

4. Respondent's Position:

• The changes were made to address anomalies in rebate claims and align the utility with statutory rules.

• The rebate depends on statutory eligibility, not necessarily on claims made in the return.

5. The Court’s Interim Observations and Directions:

• The rebate under Section 87A is a substantive right linked to income and tax liability. Procedural barriers like software modifications cannot override it.

• Procedural hurdles caused by the tax department warrant judicial intervention to uphold legislative intent.

• Interim Relief: The court directed the tax authorities to extend the deadline for filing income tax returns from December 31, 2024, to January 15, 2025, ensuring eligible taxpayers can claim their rebates.

6. Next Hearing: The petition is listed for final disposal on January 9, 2025.

The court emphasized the importance of fairness, equity, and transparency in tax administration and the need for procedural measures to support, not hinder, compliance with statutory rights.

"Appeal Against Section 263 Order Quashed: Validity of Reassessment Upheld"

The First Appellate order dated 21.03.2024 issued by the (PCIT), Faridabad, u/s 263 of the ITA, 1961, pertaining to the AY 2014-15. The appeal filed by the assessee contends that the assessment order dated 29.03.2022 u/s 147 read with section 144B was neither erroneous nor prejudicial to the interests of the revenue, and hence, the invocation of section 263 was unjustified. The primary issues raised include lack of jurisdiction, violation of natural justice, and invalidity of assessment due to procedural lapses. Ultimately, the appeal was allowed, and the 263 order was quashed, reaffirming the reassessment as valid.

"Assessment Dispute: Regional Rural Bank Challenges Addition of Rs. 87,73,904/- in 2020-21"

This appeal pertains to the AY 2020-21, where the assessee, a Regional Rural Bank, contested the addition of Rs. 87,73,904/- made by the AO. The addition was based on discrepancies in the TDS schedule and the income reported in the income tax return due to a software error. The assessee argued that the addition was erroneous and violated principles of natural justice as they were not provided with adequate opportunities to present their case. The CIT(A)/NFAC initially passed an ex-parte order due to a miscommunication regarding the hearing date. Upon review, the Tribunal decided to set aside the ex-parte order and remand the case for a fresh hearing, ensuring that the assessee is provided with a reasonable opportunity to present their case.

Tribunal Allows Assessee's Appeal, Restores Trust Registration Application to CIT(E) for Reconsideration

The assessee appealed against the order of the CIT(E), Ahmedabad, dated 15.05.2024, rejecting the Trust's registration application u/s 12AB of the Income Tax Act, 1961. The application was initially filed on 11.11.2023, but the CIT(E) denied it due to the assessee's non-response and failure to provide required details. The assessee explained that it missed the notices due to insufficient response time and infrequent email access.

The Tribunal found merit in the assessee's explanation and restored the matter to the CIT(E) for reconsideration. The CIT(E) is directed to issue a fresh notice to the assessee on a valid email ID and allow them an opportunity to comply. The appeal is allowed for statistical purposes.

The Court Quashes Reassessment Proceedings Against Insolvent Company

The petitioner, a company incorporated under the Companies Act, 1956, challenged the reassessment proceedings initiated by the respondent authorities u/s 148A and 148 of the ITA, 1961. The petitioner emphasized the moratorium imposed by the Insolvency and Bankruptcy Code, 2016 (IBC) and an approved resolution plan by the (NCLT), which bars such proceedings for the period prior to the effective date stipulated in the resolution plan. Despite detailed submissions, the respondent authorities continued reassessment proceedings, citing allegations of suspicious transactions with shell entities. The petitioner argued that these actions were illegal, arbitrary, and violated the statutory requirements under both the ITA and the IBC. The court found the reassessment proceedings to be without jurisdiction and quashed the notices and orders issued u/s 148A and 148, with all consequential proceedings being invalidated.

"Tribunal Allows Assessee's Appeal, Citing Consistency in Past Assessments"

The Assessee challenges the order passed by the Ld. CIT (Appeals) for A.Y. 2014-15. The main grounds revolve around procedural violations u/s 148 to 153, incorrect addition of unexplained cash deposits, and misuse of the assessee's bank account by the employer for trading transactions. The Assessee contended that the cash deposits and credit entries were not made with his knowledge and sought relief based on past assessments where similar issues did not result in additions. The Ld. CIT(A) dismissed the appeal mainly due to the absence of the FIR, but the Tribunal allowed the appeal, considering consistency in past assessments where no additions were made.

"Assessee's Appeal Dismissed as Infructuous Following Opting for Direct Tax Vivad se Vishwas Scheme, 2024"

The assessee filed an appeal against the CIT(A) order for AY 2012-13, which was dismissed as infructuous. This was due to the assessee opting for the Direct Tax Vivad se Vishwas Scheme, 2024, having submitted Form 1 and receiving Form 2 from the designated authority. The appeal was dismissed on this basis.

Tribunal Remands: Rs.72.95 Lakh Deposits as Unexplained Cash Credits Under Section 68 and Section 115BBE for AY 2017-18

An order dated 16.07.2024 by the CIT(A), NFAC, Delhi, for the AY 2017-18. The assessee, a proprietor of a Reliance Petroleum franchise, challenged the rejection of a rectification application where it was claimed that prior submissions were not considered.

The assessee’s income tax return, highlighting cash deposits of Rs.72,95,000 during the demonetization period. The AO treated the deposits as unexplained cash credits u/s 68 and made additions per Section 115BBE.

The CIT(A) dismissed the assessee’s appeal, leading to the current proceedings. Upon review, the tribunal found that neither the AO nor the CIT(A) adequately considered the evidence submitted by the assessee regarding the cash deposits. Therefore, the case is remanded to the AO for reassessment, ensuring proper verification and adherence to the Income Tax Act.

The appeal is partly allowed for statistical purposes.

ITAT Ahmedabad Overturns Unexplained Cash Deposit Additions for AY 2014-15

The appeal was filed by the Assessee against the order of the Ld. CIT(A) regarding the AY 2014-15. The Assessee challenged the validity of proceedings u/s 148, claiming the AO failed to follow proper procedures and lacked independent inquiries regarding unexplained cash deposits. The Assessee argued that the cash deposits in their bank account were made by their employer without their knowledge and were linked to trading activities. Despite providing supporting documents, the AO added Rs. 26,35,500 as unexplained income. The Ld. CIT(A) dismissed the appeal, citing insufficient evidence, particularly the absence of an FIR copy against the employer. However, the appeal was ultimately allowed, as the Tribunal noted similar prior assessments found no wrongdoing, suggesting consistent treatment in the current case. Thus, the additions made by the AO were deemed unsustainable.

Appeal Remanded for Fresh Adjudication Following Non-Compliance with Section 249(4)(b)

The appeal was filed by the Assessee challenging the order passed by the Ld. CIT (Appeals), National Faceless Appeal Centre, Delhi, for the AY 2017-18. The Assessee raised multiple grounds, primarily disputing the ex-parte assessment, additions made u/s 69A, and penalties levied under various sections. The appeal was dismissed by the Ld. CIT(A) for non-compliance with section 249(4)(b) of the Act. The matter has been remanded to the Ld. CIT(A) for fresh adjudication, ensuring that the Assessee is given an opportunity to be heard, and compliance is made with the applicable provisions.

Appeal Against CIT(A) Order for AY 2019-20: Disallowance of Deduction u/s 11(1A)

The order passed by the Ld. CIT (Appeals)-13, Ahmedabad, for the AY 2019-20. The Assessee disputes the dismissal of their appeal on a technical ground without addressing the merits of the case. Key issues include the timeliness of Form No. 10B filing and the disallowance of a deduction u/s 11(1A). The Tribunal found discrepancies in the reasons provided by the CPC and the Ld. CIT(A), ultimately allowing the assessee's appeal, stating that the claim u/s 11(1A) was unjustly denied based on inaccurate grounds.

"Cross Appeals Address Key Issues for AY 2011-12: Revenue and Assessee Disputes Resolved"

The Assessee addressed multiple issues related to the AY 2011-12. The Revenue contested the CIT(A)'s decisions on various matters including the allowance of Guarantee Fees, treatment of miscellaneous receipts, adjustments to Book Profit u/s 115JB, and disallowance of excess depreciation. The Assessee contested disallowances related to prior period expenses, capital grants, additional depreciation, and the classification of interest income.

Key decisions:

1. Guarantee Fees: Upheld as revenue expenditure.

2. Capital Grants: Re-evaluated for the proportionate amount of depreciation.

3. Prior Period Expenses: Set aside for reconsideration.

4. Additional Depreciation: Disallowed, aligning with legislative amendments.

The CIT(A) provided directives for reassessment and verification of certain claims, maintaining consistency with legal precedents and adjustments in line with the IT Act. Additionally, issues related to interest income and miscellaneous receipts were addressed, with specific adjustments upheld or re-evaluated. Ultimately, all raised grounds were dismissed in favour of the assessee.

"Assessee's Appeal Contests Rs. 35,18,000/- Disallowance u/s 36(1)(iii) for CWIP Financing"

The Assessee's appeal challenges disallowances made by the AO for the AY 2018-19, including disputes u/s 14A, 36(1)(va), 40(a)(i), and 36(1)(iii). Specifically, the appeal focuses on a Rs. 35,18,000/- disallowance u/s 36(1)(iii) for interest expenses related to Capital Work In Progress (CWIP). The Assessee argued that sufficient interest-free funds were available to support CWIP, and the borrowed capital was not required for its financing. The court partly allowed the appeal, agreeing with the Assessee that no disallowance was warranted.

Tribunal Condones 159-Day Delay in Assessee's Appeal, Remands Case for Fresh Adjudication

The assessee challenges the order of the ld. (CIT(A)) dismissing the appeal due to a 159-day delay in filing. The assessee argued that the delay was due to several circumstances, including arrest by the VAT department, judicial custody, and the death of their accountant during COVID-19. The assessee requested condonation of the delay to present their case on merit. The ld. CIT(A) dismissed the appeal in limine, but the Tribunal found that the reasons provided for the delay were significant and not due to negligence. Consequently, the Tribunal condoned the delay and remanded the case to the CIT(A) for a fresh adjudication on its merits, emphasizing the financial implications and the substantial issues raised by the assessee.

"ITA No.335/Del/2019: Reassessment Quashed Due to Lack of Substantial Evidence and Inadequate Approval Under Section 151"

The AY 2013-14 and involves the reassessment order passed by the (AO) u/s 144/147 of the ITA, 1961. The primary issue revolves around the AO's assumption of jurisdiction u/s 147, which the assessee contested.

The assessee, a leading manufacturer of high barrier polymer films, provided comprehensive documentation supporting genuine transactions with M/s Perfect Polychem Private Limited. However, the AO reopened the assessment based on the statement of Mr. Vijay Goyal from M/s Perfect Polychem Private Limited, alleging bogus sales and accommodation entries.

The tribunal reviewed the facts and found that the AO relied on insufficient and conjectural evidence to reopen the assessment. It was concluded that the AO had no tangible material to support the allegations of bogus sales, and the reassessment proceedings were held to be legally flawed, including the inadequate approval u/s 151 of the Act. Consequently, the reassessment was quashed, and the appeal of the assessee was allowed, while the appeal of the revenue was dismissed.