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Income Tax - Case Laws
Showing 41 to 60 of 163811 Records
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2024 (5) TMI 293 - ITAT DELHI
Penalty u/s 271(1)(c) - disallowance of cash business expenses by invoking provisions of Sec 40(A)(3) - HELD THAT:- We find that in this case, assessee does not deserve to be visited with the rigours of penalty u/s 271(1)(c) of the Act. The case laws cited above duly supports the case of the assessee [MSK CONSTRUCTIONS P. LTD. [2007 (3) TMI 181 - MADRAS HIGH COURT] and RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT]. Furthermore, the conduct of the assessee is not contumacious. Accordingly, relying on the precedent as above, we delete the penalty. Appeal filed by the assessee is allowed.
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2024 (5) TMI 292 - ITAT COCHIN
Levy of interest u/s 234A and 234B - Interest for defaults in furnishing return of income - Determination of ‘date of regular assessment’ - obliteration of demand consequent to an assessment being set aside - original assessment stands set aside in the appellate proceedings for fresh assessment - as original demand surviving no longer, the Revenue claims the subsequent assessment as the regular assessment, while the assessee claims it to be the first one
HELD THAT:- As explained in CIT vs. Prakash Chand Lunia [2023 (4) TMI 1057 - SUPREME COURT] for a precedent to be binding there has to be a conscious consideration of an issue involved (Also see - Hussain Bhai & Ors. v. [1971 (4) TMI 1 - SUPREME COURT].
The decision in Modi Industries Ltd. [1995 (9) TMI 324 - SUPREME COURT] settles the issue qua the ‘date of regular assessment’, clarifying it to be for the purpose of determination of interest payable to or, as the case may be, by the assessee, i.e., ss. 214, 215, also adverting to ss. 243 and 244 - The said provisions are no longer operative, with, further, there being legislative changes, the legal import of which is to be judicially determined.
The decision in Mahesh Investments . [2020 (10) TMI 428 - KARNATAKA HIGH COURT] and by the Tribunal in Santhimadom Herbal City Trust [2013 (7) TMI 1219 - ITAT COCHIN] stand rendered de hors the same. There being no consideration of the changed legal scenario, we only consider it fit and proper to restore this issue, i.e., computation of interest u/ss. 234A & 234B, back to the file of the ld. CIT(A) for a consideration afresh, who shall adjudicate thereon per a speaking order after allowing adequate opportunity of hearing to the parties before him, in accordance with law, considering all the decisions that may be relied upon by them, or that he may wish to rely upon, confronting them therewith. All contentions qua this issue, whether raised and considered in this order or not, are, without reservation, open to both the sides. We may not be construed as having expressed any final view in the matter, save as to the instant appeals, as indeed the assessments from which they arise, as being maintainable.
Two, we may clarify that the nature of levy as mandatory, as well as compensatory, and of the default being a continuing one, is not in dispute, so that demand, where paid, would automatically close the interest, even as found in CIT v. Pranoy Roy [2008 (9) TMI 150 - SUPREME COURT] - The compensatory aspect, which also prevailed with the Apex Court in Modi Industries Ltd. [1995 (9) TMI 324 - SUPREME COURT] stands met by the extant law providing for interest up to the date of grant of interest; a statutory confirmation of the interest being compensatory. The dispute concerns only the aspect of ‘date of regular assessment’ in the given facts and circumstances of the case, and the law in the matter. Assessee’s appeals are allowed for statistical purposes.
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2024 (5) TMI 291 - ITAT KOLKATA
Registration applied u/s 80G - denial of registration as application in Form 10AB u/s 80G(5)(iii) was not filed in time - HELD THAT:- In the present case in hand that the assessee is a registered Society under the Registrar of Firms, Societies & Non-Trading Corporations, West Bengal, exemption u/s 80G(5) of the Act on 19.08.2008, application for provisional approval u/s 80G(5)(iv) was filed on 29.04.2021, Order for provisional approval exemption u/s 80G(5)(iv) of the Act passed on 28.05.2021, and assessee filed application for regular exemption u/s 80G(5)(iii) of the Act on 01.06.2023.
The present case is squarely covered with the aforesaid cited decisions. Therefore, the impugned order is set aside. The appeal of the assessee is allowed and CIT (E) is directed to grant provisional approval to the assessee u/s 80G(5)(iii) of the Act if the assessee is otherwise found eligible. CIT (E) will decide the application for final registration within three months of the receipt of this order. Appeal filed by the assessee is allowed.
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2024 (5) TMI 290 - ITAT JODHPUR
Undisclosed income of the assessee - bogus sale of agricultural produce - preponderance of probability theory - as per revenue assessee has coloured the story of sale of agricultural produced - AR vehemently argued before us that based on the information placed on record, it is not under dispute that the assessee is having the only source of income and that is agricultural income. Even on the same set of evidence the ld. AO has partly considered as income of the assessee - While making the addition the ld. AO recorded statement of Mr. Pappu, who handles the affairs of his agricultural land on sharing basis
HELD THAT:- During the course of assessment proceedings, it is very much clear that the assessee has his son and his relative (Buwa) holding 50 bighas of agricultural land and the assessee is having facility for storage of agricultural produce. Even the Krushi Upaj Mandli based on the set of facts placed on record has not lodged any compliant for enquiry. Considering all these set of facts merely invoices which are not of registered firm or a person and having not paid agricultural cess, the same cannot be considered as non genuine. In support of the contention our attention was invited to the various judgement of Co-ordinate Bench cited by ld. AR of the assessee.
As decided in Shri Chaudhary Mange Ram Panwar [2023 (6) TMI 1129 - ITAT DEHRADUN] preponderance of probability theory would go in favour of the assessee in the instant case. The predominant income available with the assessee is only the agricultural income. No other source of income is brought on record by learned Assessing officer and it is not in dispute that the assessee is not engaged in any business or profession. The source of income in any manner whatsoever could only emanate from agricultural income. Hence, the overall explanation given by the assessee for explaining the cash deposits as emanating out of the sale of car and agricultural receipts need to be accepted. No other source available with the assessee which would have enabled him to earn income.
Thus we are of the considered view that the addition made by the ld. AO in the case of the assessee is directed to be deleted. Appeal of the assessee is allowed.
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2024 (5) TMI 289 - ITAT SURAT
Cash deposit in bank account treated as unexplained income - Agricultural income or not? - appellant is an agriculturist and there is nothing on record to show that assessee had earned income from any other source except from agricultural activities - whether the quantum of agricultural income claimed by the assessee is justifiable? - HELD THAT:- It is a fact that there are 6 other members in the family of assessee. Therefore, it cannot be said that the assessee was the owner of all the agricultural land of 38 binghas and the entire agricultural income belonged to him. Assessee stated that uncles and cousins of the assessee are staying in USA and only the assessee and his father carried out agricultural activities. Even if uncles and cousins are staying in USA, then also it cannot be accepted that the entire agricultural income was earned only by the assessee and he retained the same.
No confirmation or affidavit of his uncles and cousins staying in USA has been given to support the claim of appellant that agricultural income legally earned by them was given up in favour of the appellant. The assessee has also not furnished any details of the ITR and other supporting evidences to show that the income of his father was diverted to him. He has not even given the affidavit or confirmation of his father in support of such claim. Therefore, the explanation of the assessee that the entire agricultural income belongs to him and to none others is not acceptable. Be that as it may, the fact that assessee is an agriculturist and that he was not having any other source of income cannot be denied in the face of various details and evidences given by him.
It has accepted the contention of the assessee that he had deposited cash in the bank account out of agricultural income and out of earlier cash withdrawals from the bank (i.e., unused cash out of the cash withdrawn from bank of assessee). The ratio of above decision is applicable to the present case. We have already held that explanation regarding agricultural income of Rs. 2,24,000/- out of claim of Rs. 9,24,000/- is not acceptable. Therefore, addition to the extent of Rs. 2,24,00/- is sustained and remaining amount of Rs. 14,85,000/- is deleted. Accordingly, this ground is partly allowed.
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2024 (5) TMI 234 - SC ORDER
Validity of order passed by the Settlement Commission - Revenue submits that the Settlement Commission has wrongly allowed deductions u/s 80-IA (4) as the returns were filed after the period prescribed by law - As decided by HC [2019 (7) TMI 2019 - MADHYA PRADESH HIGH COURT] contention of petitioner that the Settlement Commission has wrongly allowed deductions under Section 80- IA (4) of the Act, without taking into consideration the aspect of delay, has no merit and does not survive for either being raised or adjudicated.
HELD THAT:- We are not inclined to interfere with the impugned judgment passed by the High Court. Hence, the Special Leave Petition is dismissed.
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2024 (5) TMI 233 - DELHI HIGH COURT
Addition u/s 68 - unexplained share application money - genuineness and creditworthiness of the share capital subscription challenged - ITAT deleted addition - Revenue has challenged the order of the ITAT as it failed to appreciate that the Director, Tushar Kumar, had clearly admitted the receipt of the accommodation entries by the respondent-assessee and the respondent-assessee had failed to substantiate genuineness and creditworthiness of the share capital subscription - HELD THAT:- With regard to the first contention relating to the genuineness and creditworthiness of the share capital subscription, the ITAT has noticed that the CIT(A) had duly recorded its satisfaction relating to identity, genuineness and creditworthiness of the amounts received along with confirmations, address, cheque number and PAN and therefore, the ITAT declined to interfere with the order of CIT(A) in deleting the addition.
We may allude to the order of ITAT, wherein, while affirming the deletion of additions carried out by CIT(A) towards unexplained share application money under Section 68 held that CIT (A) has duly satisfied himself as the assessee and the parties could provide documents relating to identity, genuineness and creditworthiness of the amounts received along with confirmations, address, cheque number and PAN. Hence, we decline to interfere with the order of the ld. CIT (A).
Finance received from M/s Arha Buildcon Pvt. Ltd., the ITAT, in our view, has correctly delved into the facts to come to the conclusion that there have been direct finance arrangements between M/s Arha Buildcon Pvt. Ltd. and the respondent-assessee. ITAT had rendered a finding of fact with respect to the statement and held it to be factually incorrect observing that the bank statement of the assessee reflects the amounts received and paid with regard to M/s Arha Buildcon Pvt. Ltd.
Receipt from each of 48 flats concerning Bhagwanti CGHS ITAT has made a categorical finding that the addition was made on theoretical premise on the basis of presumptions and there was no evidence gathered, collected or investigated by the Revenue to support the addition.
ITAT has examined the facts in great detail. It may be noted that the ITAT is the final arbiter of the facts and appeal can be entertained by the High Court only if any substantial question of law arises. A conspectus of the proposed substantial questions of law signify that they only relate to the findings of fact and the order of the ITAT cannot be construed in any manner to be ex-facie perverse. Thus no substantial question(s) of law arises for our consideration.
Unexplained investment in properties - Cash component of the consideration paid by assessee for Two projects - ITAT deleted addition - HELD THAT:- ITAT has held that there was no scope to treat the amount as paid in cash to be brought under unexplained investment under Section 69 of the Act and came to a conclusion that there was no material to corroborate the addition as made by the AO.
Addition of unexplained investment in Kashipur land for the project designated as GTM Kashipur-II, the ITAT, in our view, has correctly delved into the facts to come to the conclusion that the nature and contents of the seized material do not reflect any unexplained investment in the land purchased at Kashipur and the addition has been made on a presumptive basis.
Amounts received from Haryana CGHS and the alleged illegal link between the respondent-assessee and Haryana CGHS, the ITAT, after analysing the facts has held that there was no link between the respondent-assessee and Haryana CGHS and it was not a benami concern of the respondent-assessee company.
Undisclosed investment in Wings CGHS for taking its control via an MoU, the ITAT, after carefully analysing the facts, held that the MoU cannot be treated as executed since during the search itself, it was conveyed that Tushar Kumar did not want to enter into an agreement with Ajay Jain as per the MoU and the said MoU was also not signed by Tushar Kumar.
Unexplained investment in the shares of M/s. Sargam Estate Pvt. Ltd., the ITAT concurred with the findings as returned by the CIT(A) in deleting the additions as share capital remained constant as at 31.03.2007 and as at 31.03.2006. The share application money as at 31.03.2006 was Rs. 32,18,000/- which was refunded to the assessee company after receipt of fresh share application money of Rs. 53,86,000/- by M/s Sargam Estate Pvt. Ltd. Instead of enquiring, the source of application money, the AO brought to tax the amount of share application money refunded to the assessee by M/s Sargam Estate Pvt. Ltd. Hence, the addition made has been rightly deleted by the ld. CIT (A).
Unexplained advertisement expenditure, ITAT again concurred with the findings rendered by the CIT(A) in deleting the additions as the total expenditure debited on account of advertisement was Rs. 3.19 Cr. as against Rs. 2.85 Cr. alleged by the Assessing Officer.
Undisclosed investment in the stock of jewellery ITAT held that since there is a panchnama drawn in the case of M/s GTM Jewellery Mart Pvt. Ltd., stock inventory was made in the said company and keeping in view the fact that M/s GTM Jewellery Mart Pvt. Ltd. is a separate assessable entity, keeping in view the fact that the difference is due to difference in price but not in quantity, we hold that the addition cannot be made in the hands of the assessee in the instant year.
Thus ITAT has minutely examined and marshaled the facts. It cannot be gainsaid that the proposed substantial questions of law are merely based on the findings of fact by the ITAT. The order of the ITAT on the concerned issues which stand raised before us, in our opinion, does not suffer from any perversity as claimed by the Revenue. Revenue appeal dismissed.
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2024 (5) TMI 232 - ALLAHABAD HIGH COURT
Gross profit determination - addition of undisclosed profit in the hands of the assessee while framing the assessment u/s 143(3) - credibility of books of accounts of the assessee - substantial question of law or fact - Addition u/s 40-A(3) as the assessee had made cash payments of expenses exceeding Rs. 20,000/- under different heads - disallowance relating to unverified consignment sales expenses - Tribunal has dismissed the appeal filed by the revenue - HELD THAT:- There no finding was recorded by the AO to doubt the credibility or correctness or completeness of the books of accounts of the assessee. Yet, since the books of accounts of the assessee came to be rejected the Assessing Officer further proceeded to disturb the gross profit rate for the assessment year in question. Relying on gross profit rate achieved by the assessee in the previous three years, addition of about Rs. 3 crores was made.
We find no error on part of the Tribunal in recording either of the above findings. Once the CIT (Appeals) looked into the vouchers of cash expenses and recorded a clear finding that those were duly vouched except for two expenditures, in absence of any material shown to establish that that finding was perverse, there survives no room to interfere with the confirmation of such finding by the Tribunal (the last fact finding authority). As to the issue of ad hoc disallowance of expenditure of consignment sale the Tribunal has rightly concluded the same to be an academic issue.
Seen in that light, in absence of any other objection found in the books of accounts of the assessee as may have been pressed before the Tribunal, there survives no room to reject the books of accounts of the assessee. Consequently, there is no intrinsic evidence to enhance the gross profit rate. Once the books of accounts of an assessee are found accepted the Assessing Officer may have remained within the confines of his powers ad not disturbed the gross profit rate as that would remain in the nature of the result of the book entries and not an original entry by itself.
Settled principle in this regard being that the assessing officer may never step into the shoes of the assessee to infer more profit than may have been derived by the assessee and further his jurisdiction being confined to examine the correctness and completeness of the books of account, it never became open to the Assessing Officer to reject the gross profit rate disclosed by the assessee. It is also shown, the finding on acceptance of books of accounts of the assessee recorded to by the CIT (Appeals) was not even specifically challenged. Tribunal has not erred in confirming the order of the CIT (Appeals) - Decided against revenue.
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2024 (5) TMI 231 - BOMBAY HIGH COURT
Validity of reopening of assessment - Petitioner had not filed its ROI and no reply also has been filed against notice under Section 148A (a) - Valid approval u/s 151 provided or not? - another notice was issued u/s 148A (b) stating that the submissions made were not satisfactory and Petitioner failed to reconcile each and every entry in the notice with ITR filed by it - HELD THAT:- We agree with Petitioner contractual receipts and interest earned on securities have been raised for the first time in the impugned order passed under Section 148A (d) of the Act. Also, Petitioner, in the letter dated 14th April 2023, has explained the rent receipt and source and nature of foreign remittances and if the AO was not satisfied with the explanation, he ought to have, in the impugned order dated 20th April 2023, made out a case as to why he does not agree with the explanation given by Petitioner than making a bald and incorrect statement that Assessee has failed to demonstrate that these items have been disclosed.
In the circumstance, in our view, the impugned order under Section 148A (d) of the Act has been passed without application of mind. It is obvious that even the sanction that is accorded under Section 151 of the Act, has been issued without application of mind. We say this because if only the Range Head or the PCIT had bothered to read the file together with the notices issued under Section 148A (b) of the Act, they would have not recommended or approved issuance of the notice under Section 148 of the Act.
In our view, the impugned order cannot be sustained. The same is hereby quashed and set aside. Decided in favour of assessee.
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2024 (5) TMI 230 - HIMACHAL PRADESH HIGH COURT
Condonation of delay of 1085 days in filing the appeal u/s 260-A - application seeking condonation of delay filed u/s 5 of the Limitation Act, 1963, the applicant/appellant contended that the appeal has to be treated as one within time from 28.06.2022, when Income Tax Appeal [2022 (8) TMI 1506 - HIMACHAL PRADESH HIGH COURT] was disposed of as infructuous by this Court and also contended that the delay is neither willful nor intentional.
HELD THAT:- We may point out that Income [2022 (8) TMI 1506 - HIMACHAL PRADESH HIGH COURT] had no doubt become infructuous in view of modification of the order challenged therein [2019 (1) TMI 421 - ITAT CHANDIGARH] by the Income Tax Appellate Tribunal by passing a fresh order on 11.10.2019.
The appellant had a right to question the order passed on 11.10.2019, by filing appeal under Section 260-A of the Act, within the period of 120 days prescribed under the Income Tax Act.
The said period ended on 08th February, 2020. Thereafter from around 15th March, 2020 the Covid Pandemic started, and in view of the same, the Hon’ble Supreme Court titled Re: Cognizance for Extension of Limitation [2022 (1) TMI 385 - SC ORDER] directed that the period from 15.03.2020 till 28.02.2022 would stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. It further stated that if limitation had expired during the period between 15.03.2020 till 28.02.2022 notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022.
In the instant case, the limitation having expired prior to 15.03.2020 on 08.02.2020 itself, the applicant cannot get the benefit of the said period of 90 days on 28.02.2022.
Admittedly, the instant appeal has been preferred on 12.10.2022, 224 days after 28.02.2022. No valid explanation for this period of delay is mentioned in the application. We are also of the opinion that the date on which Income Tax Appeal No. 10/2019 was disposed of as infructuous on 28.06.2022 had no relevance, since the order impugned in that ITA and in the instant ITA would be different orders.
Since we are satisfied that there has been negligence on the part of the applicant/appellant in filing the appeal within the time prescribed by law, this application is dismissed.
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2024 (5) TMI 229 - GUJARAT HIGH COURT
TDS u/s 194H - assessee is a cellular mobile service providers - discount offered by assessee to its distributors on the payment made by the distributors towards pre-paid sim-cards/recharge coupons - - whether appellant assessee and its distributors enjoy legal relationship of principal and agent and not of principal to principal basis? - HELD THAT:- As decided in [2024 (3) TMI 41 - SUPREME COURT] the term ‘agent’ denotes a relationship that is very different from that existing between a master and his servant, or between a principal and principal, or between an employer and his independent contractor. Although servants and independent contractors are parties to relationships in which one person acts for another, and thereby possesses the capacity to involve them in liability, yet the nature of the relationship and the kind of acts in question are sufficiently different to justify the exclusion of servants and independent contractors from the law relating to agency.
The term ‘agent’ should be restricted to one who has the power of affecting the legal position of his principal by the making of contracts, or the disposition of the principal’s property; viz. an independent contractor who may, incidentally, also affect the legal position of his principal in other ways. This can be ascertained by referring to and examining the indicia mentioned in clauses (a) to (d) in paragraph 8 of this judgment. It is in the restricted sense in which the term agent is used in Explanation (i) to Section 194-H of the Act.
We hold that the assessees would not be under a legal obligation to deduct tax at source on the income/profit component in the payments received by the distributors/franchisees from the third parties/customers, or while selling/transferring the pre-paid coupons or starter-kits to the distributors. Section 194-H is not applicable to the facts and circumstances of this case. Decided in favour of assessee.
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2024 (5) TMI 228 - GUJARAT HIGH COURT
Reopening of assessment u/s 147 - Disallowance u/s 14A r.w.r. 8D - concept of "change of opinion" - as per assessee no exempt income earned during the relevant assessment year and the assessee had made investment in long term, non-trade (unquoted investment) in private limited companies being carried forward from earlier years - HELD THAT:- As respondent has failed to assume jurisdiction to issue such notice on the basis of the material which was available on record even during the course of original assessment proceedings and in absence of any fresh tangible material for reopening, the respondents could not have formed any reason to believe that the income has escaped assessment, more particularly, when the impugned notice is issued after four years from the end of the assessment year and after framing assessment u/s 143(3), wherein the issue for which the reopening sought to be made is already considered by the AO.
Therefore, as per proviso to section 147 of the Act, as the petitioner has disclosed truly and fully all material facts during the regular assessment, no notice could have neem issued under section 148 of the Act. Moreover, in view of scrutiny of the issue of disallowance u/s 14A of the Act read with Rule 8D of the Rules during the regular assessment proceedings, reopening on the same issue would amount to mere change of opinion of the assessing officer. Decided in favour of assessee.
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2024 (5) TMI 227 - GUJARAT HIGH COURT
Validity of reopening of assessment - reasons to believe - survey conducted in Jammu & Kashmir Bank u/s. 133A and only because the petitioner assessee has transacted with the said bank made a total of transaction of inward and outward remittance, thus concluded that the income has escaped the assessment - material in form of Survey report of the Jammu & Kashmir Bank that there was a mismatch of the remittance amount as the bank has calculated two remittance amount one on the notional basis and other on the actual realization basis and it is not known as to which amount is taken for accounting purpose by the assessee - HELD THAT:- When the Jammu & Kashmir Bank has clearly stated in the reply that there are two different entries captured in the statement of account and remittance sheet have two different types of rate one is notional and one is actually realized and statement of account submitted to the petitioner, the same is duly recorded in the books of accounts reflecting the actual realized rate of foreign exchange. In such circumstances, on application of the basic accounting principles, when the petitioner has produced all the material before the assessing officer during the course of the regular assessment, AO could not have formed a prima facie belief that there is escapement of income in view of the material available on record in form of details of bank accounts along with the bank statement for the month of March-2016 of the Jammu & Kashmir Bank, details of exchange, difference/ net loss in foreign exchange transaction and translations along with the copies of the ledger account of the exchange difference, details of expenditure in foreign currency, copy of Form-15CA filed by the petitioner-company, wherein all details of foreign remittance are reflected.
When such record was already available with the respondent Assessing Officer, which was produced by the petitioner assessee during the original assessment proceedings, he ought to have considered the same and applied his mind with regard to the material made available by the survey action u/s. 133 of the Act, which was conducted on Jammu & Kashmir Bank coupled with the explanation tendered by the Jammu & Kashmir Bank reflected in the reasons recorded.
The impugned notice issued u/s. 148 of the Act is nothing but amounts to change of opinion on the part of the respondent assessing officer and he has issued the impugned notice only on the borrowed satisfaction without there being any fresh tangible material to come to the prima facie conclusion that the income has escaped assessment. Thus the impugned show cause notices u/s. 148 of the Act are hereby quashed and set aside. Assessee appeal allowed.
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2024 (5) TMI 226 - GUJARAT HIGH COURT
Violation of principle of natural justice - non-granting opportunity of hearing to the petitioner - adjournment prayer made by the petitioner ignored - HELD THAT:- AO has not granted opportunity of hearing to the petitioner though petitioner has prayed for same which is not in dispute as per the screenshot placed on record . It appears that the petitioner has also personally met the respondent Assessing Officer and requested for time to file reply to the show-cause notice, however the same is not reflected in the impugned order nor the AO has referred to in the affidavit-in-reply.
In view of the above undisputed fact of not granting opportunity of hearing to the petitioner, the impugned assessment order is hereby quashed and set aside and the same is remanded back to the Assessing Officer to pass fresh de novo order after giving opportunity of hearing to the petitioner from the show-cause notice stage. Such exercise shall be completed within 12 weeks from the date of receipt of copy of this order.
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2024 (5) TMI 225 - GUJARAT HIGH COURT
Reopening of assessment u/s 147 - Reasons to believe - reopening on the basis of the audit party objections - claim made towards the notional guarantee commission - HELD THAT:- The notice u/s 142(1) clearly indicates the break-up of any other amount allowable as deduction, in which in reply the petitioner has submitted that the claim made towards the notional guarantee commission and the same is deemed to have been considered by the AO while framing the assessment.
Moreover, it is settled legal position that the reopening on the basis of the audit party objections is invalid and on bare perusal of the reasons recorded, it is apparent that there was no material available with the respondent - AO to form a reason to believe that the income has escaped assessment. In such circumstances, the impugned notice issued u/s 148 of the Act is held to be without jurisdiction and accordingly, the same is quashed and set aside. Rule is made absolute to the aforesaid extent.
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2024 (5) TMI 224 - GUJARAT HIGH COURT
Rectification application u/s 254 - Tribunal not followed the decision on the identical facts by the Coordinate Bench which is confirmed by this Court - as per the view of the Tribunal, the interest earned on the staff loan and advances incidental to the assessee’s business is factually incorrect as the loan advances given to the employees are not mandatory incentive given to the staff and cannot be termed as incidental to the business, but Tribunal could not have taken different view than what was already taken by the Coordinate Bench which is confirmed by this Court in [2020 (3) TMI 1468 - GUJARAT HIGH COURT]. Thus, there is a mistake apparent on the face of the record
HELD THAT:- When the Tribunal has not followed the decision on the identical facts by the Coordinate Bench which is confirmed by this Court, there is mistake apparent on the record which ought to have been considered by the Tribunal when it is pointed out being a mistake apparent on record.
As decided in Air Conditioning Specialities (P.) Ltd [1995 (3) TMI 14 - GUJARAT HIGH COURT] as held no doubt in our minds that when a point is concluded by a decision of this court, all subordinate courts and inferior Tribunal within the territory of this State and subject to the supervisory jurisdiction of this court are bound by it and must scrupulously follow the said decision in letter and spirit. Since the second respondent has not decided the matter in accordance with law laid down by this court in the case of Bharat Textile Works [1978 (2) TMI 72 - GUJARAT HIGH COURT] the order passed by him requires to be quashed and set aside.”
In such circumstances, not following the binding decision is mistake apparent on record. The impugned orders are accordingly quashed and set aside. The matter is remanded back to the Tribunal to pass fresh orders in Misc. Application preferred by the petitioner.
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2024 (5) TMI 223 - DELHI HIGH COURT
Reopening of assessment against entity ceased to exist/amalgamating entity - petitioner has not declared its return of income for AY 2016-17 - as contended that the notices were addressed to SIPL and SRPL, which are the predecessor companies that ceased to exist as on the date of issuance of notice - HELD THAT:- AO neither before passing of the show cause notice u/s 148A(b) of the Act nor before the impugned order u/s 148A(d) has considered the ITR filed by the petitioner which duly captures the income earned by the amalgamated entity.
As noted that the statutory authority which is entrusted with the wide powers is also casted with the responsibility that those powers should not be used unwarrantedly and that the due procedure infused with concomitants of principles of fairness should be adhered to before passing of the impugned notice u/s 148A(b) of the Act
As understanding of the legislative intent and the cardinal duty entrusted upon the authority to duly apply its mind before the issuance of the notice u/s 148A(d) of the Act, clearly elucidates that it is pertinent for the AO to consider the material before it to even form a prima facie opinion.
In the present case, the petitioner vide its ITR filed on 08.09.2016 and reply to the show cause notices has already intimated the Revenue regarding the amalgamation of the entities. It is evident that the bone of contention in the instant case i.e., sale transaction undertaken by the amalgamating entity, which is solitary rationale for issuance of the show cause notice under section 148A(b) of the Act, has also been rightly reflected in the ITR filed by the petitioner.
Therefore, it is crystal clear that the Revenue has not considered the ITR filed by the petitioner and issued the impugned notice without due application of mind and in a mechanical manner, without adhering to the statutory responsibilities envisaged under section 148 of the Act.
Unable to accept Revenue, to remit the matter back to the concerned AO for the simple reason that on a bare examination of the facts, we find that the reason for the issuance of the notice under section 148A(b) of the Act is itself de hors the available record. WP allowed.
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2024 (5) TMI 222 - DELHI HIGH COURT
Applicability of provisions of Section 144C - AO proceeded to frame a Draft Assessment Order to form the opinion that the income as shown was liable to be taxed at the rate of 20% as per the provisions of Section 115A - assessee chose not to file any objections before the DRP against the aforesaid order, thus Final Assessment Order came to be framed - ITAT noticed that Respondent was an eligible assessee in terms of Section 144C(15)(b)(ii) - HELD THAT:- As has been noticed by the ITAT, and which fact remained uncontested even before us, there was no variation in the income as returned. The only point of disputation was with respect to whether the respondent was entitled to claim the benefits under Article 11 of the DTAA. It was that claim of the respondent which alone came to be negated by the AO. Accordingly, while the income offered became subject to tax at the rate of 20%, the total income as declared remained unvaried. As we read Section 144C of the Act as it stood at the relevant time, it would have empowered the AO to frame a Draft Assessment Order only if a variation in the income returned was suggested. This was clearly not the case which obtained.
No error in the view as expressed by the ITAT. The appeals thus raise no substantial question of law.
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2024 (5) TMI 221 - ITAT MUMBAI
Penalty levied u/s 271(1)(c) - estimation of income on bogus purchases - addition to an extent of 12.5% of the total suspicious purchases - CIT(A) deleted penalty levy - HELD THAT:- We find that the coordinate bench of the Tribunal in Mun Gems [2024 (1) TMI 209 - ITAT MUMBAI] held that ad hoc GP rate applied on alleged bogus purchases to factor in the suppression of alleged gross profit could not be the basis of levying penalty for furnishing of inaccurate particulars of income or concealing particulars of income.
Thus the impugned order deleting the penalty levied under section 271(1)(c) of the Act is upheld. As a result, grounds raised by the Revenue are dismissed.
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2024 (5) TMI 220 - ITAT PUNE
Denying advance tax liability because of applicability of sec. 80P - Assessee’s case that it is admittedly a cooperative society eligible for sec. 80P deduction and therefore, it could not have been held liable for payment of advance tax regarding an income which was not assessable under the provisions of the Act - HELD THAT:- No merit in assessee’s case denying it’s advance tax liability because of applicability of sec. 80P of the Act. This is for the precise reason that such a deduction has to be claimed in “a return” going by sec. 80A(5) of the Act which has been held to be a mandatory condition as per EBR Enterprises vs. Union of India [2019 (6) TMI 484 - BOMBAY HIGH COURT].
It is made clear that there is no material in the case file indicating the assessee to have raised the foregoing sec. 80P claim in a return in above terms. That being the case, find no merit in assessee’s instant sole substantive grievance seeking to reverse NFAC’s lower appellate findings dismissing it’s appeal u/sec. 249(4)(b) of the Act. Ordered accordingly.
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