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Income Tax - Case Laws
Showing 1 to 20 of 172400 Records
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2025 (4) TMI 301
Delay of 1797 days in filing an appeal before ITAT - HELD THAT:- As going through the reasons assigned for delay in filing the appeal, this Court is of the considered opinion that although a delay cannot be condoned without sufficient cause but the merits of the case cannot be discarded solely on the technical grounds of limitation. A liberal approach should be taken in condoning delays when the limitation ground undermines the merits of the case and obstructs substantial justice.
Hence, this Court finds that the appellant has been able to put forth “sufficient cause” for the delay in filing the appeal before ITAT.The delay in filing an appeal before the ITAT is herby condoned.
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2025 (4) TMI 300
Denial of registration u/s 12AA - objects and purposes of the assessee Trust is only religious in nature - HELD THAT:- In view of the categorical finding recorded by the ITAT that the purposes and objects of the assessee Trust are both charitable and religious in nature, which could not be contradicted competently by learned counsel appearing for the appellant / Revenue during the course of argument before us, as such, the ITAT is absolutely justified in holding that the assessee Trust is entitled for registration u/s 12AA of the Act, which is pure and simple finding of fact based on the evidence available on record and is neither perverse nor contrary to law. Decided in favour of the assessee.
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2025 (4) TMI 299
Validity of reopening of assessment - way the objections of the Petitioner were required to be considered and disposed of - HELD THAT:- Except for summarising the Petitioner’s objections, such objections are not considered. The impugned order contains no reasons and records only conclusions. Simply stating that the AO, who issued the initial notice, has elaborately discussed each of the issues does not amount to the incumbent or the Faceless Centre dealing with the objections in accordance with law. None of the objections appear to have been considered, and the impugned order dated 2nd February 2022 has been made very cursorily.
We set aside the impugned order and direct the Jurisdictional Assessing Officer to hear the Petitioner and decide the Petitioner’s objections to the reopening of the assessment within five weeks of the uploading of this order.
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2025 (4) TMI 298
Appeal against order being issued beyond the prescribed period of limitation - HELD THAT:- It would not be appropriate for us to decide on the rival contentions, particularly since the Petitioner has an alternate remedy of appeal. Before the Appellate Authority, all these contentions can be raised, and the AO would be in a better position, at least in the first instance, to decide on such issues.
At this stage, we can only say that the arguable issues raised on either side. The issues raise disputed or at least mixed questions of law and fact. No case is made out in such circumstances, bypassing the statutorily prescribed remedies. In the decisions relied upon by the Petitioner, the Respondents offered a concession, and based upon such concession, this Court remanded the matters. Nothing in the earlier decisions indicates that the objection regarding the exhaustion of alternate remedies was raised or decided by this Court.
We decline to entertain this Petition but with leave to the Petitioner to avail of the alternate statutory remedy of Appeal under the IT Act. However, we record that this Petition was instituted on 30 December 2021 and has been pending until today. Therefore, the Assessing Officer should consider this factor should the Petitioner institute an Appeal within four weeks from today.
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2025 (4) TMI 297
Reopening of assessment u/s 147 - non-compliance of certain terms of Section 13A of the said Act which provides for special provisions related to incomes of political parties and on the ground of information available with the authorities that income had escaped assessment - HELD THAT:- From the disclosure made in the writ petition, it would transpire that in July, 2024, the petitioner had intimated the respondents that it was in the process of challenging the order passed u/s 148A(d) and the notice issued u/s 148 of the said Act, both dated 27th March, 2024 for the assessment year 2017-18. The writ petition had however, not been filed until 17th March, 2025.
The aforesaid in our view, is not so fatal to disentitle the petitioner from maintaining the writ petition though the same becomes a relevant consideration for grant of interim relief.
Having regard thereto, and considering the fact that the respondents are on the verge of bringing the assessment proceedings to a conclusion, petitioners despite having made out a prima facie case is not entitled to stay of further proceedings, though a limited protection may be afforded.
Thus, grant liberty to the petitioner to respond to the notice proposing variation dated 13th March, 2025 by 04:30 p.m. on 29th March, 2025. Accordingly, if such response is filed, the Faceless Assessment Unit shall upon accepting such response and upon providing opportunity of hearing, if sought for, shall take the proceeding under Section 148A of the said Act to its logical conclusion. However, the order if any, to be passed by the Faceless Assessment Unit shall not be communicated to the petitioner, nor shall the same be uploaded or enforced without the leave of this Court.
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2025 (4) TMI 296
Transfer order u/s 127 - first respondent, had transferred the income tax assessment files pertaining to the appellants from the office of the second respondent to the office of the Deputy Commissioner of Income Tax, Circle-4(4), Kolkata ('Central Circle'), to centralise the case of the appellants for effective and co-ordinated investigation along with other cases - appellants in all these appeals are either private limited company or limited liability partnership or partnership concern or individuals, who are having business only in Tamil Nadu
HELD THAT:- The show-cause notice refers to incriminating documents seized from the various premises of the appellants by the authorised officer under the control of Principal Director of Income Tax (Investigation), Kolkata. The documents seized would also affect the assessment in respect of the respective appellants.
When the documents are seized from different premises of a group of companies/concerns, it is necessary for all the cases to be centralised or considered together at one place, so that there will be a coordinated investigation.
The object of Section 127 is to meet situations as in the present case. The appellants admit that they are a group of companies may be carrying on different business. There is no mala fides alleged in this case as against the first respondent in any of the cases for passing the impugned order for transferring the cases from the office of the second respondent to the office of the Deputy Commissioner of Income Tax, Circle-4(4), Kolkata under Section 127 of the Income Tax Act, 1961.
The power u/s 127 is not circumscribed or limited by express language. We find no reasons to doubt the bona fides in this case. Therefore, we do not find any error or infirmity in the order of the learned single Judge and the same deserves to be confirmed and all the writ appeals fail.
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2025 (4) TMI 295
Validity of reassessment proceedings - parallel assessment proceedings u/s 153C with 147 - Period of limitation - as argued second section 148 notice should be considered as non est as it was issued after the notice u/s 153C - HELD THAT:- Considering the definite stand taken on behalf of the Revenue is that the period of limitation for issuance of notice under Section 148 of the Act in the present case is four years from the end of the relevant assessment year, that is AY 2016-17, we find that the second section 148 notice has been issued beyond the period of limitation. Thus, without going into the question whether the second section 148 notice is invalid as it was issued when the proceedings for reassessment of income for the relevant assessment year had commenced pursuant to the notice issued under Section 153C of the Act, all proceedings continued pursuant thereto are required to be set aside.
We say this for the reason that the first section 148 notice – which was directed to be considered as a notice under Section 148A (b) of the Act in terms of the decision of the Supreme Court in Union of India & Ors. v. Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] was issued on 23.06.2021 as the last date for issuing a notice under Section 148 of the Act in this case had expired on 31.03.2021. However, the period of limitation was extended by virtue of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA] and the time period for issuance of such notice was extended till 30.06.2021.
In the present case, the first section 148 notice was issued on 23.06.2021, which is six days prior to the expiry of the period of limitation. The time period for issuing a notice under Section 148 of the Act was extended by following the directions issued by the Supreme Court in Union of India & Ors. v. Ashish Agarwal (supra) and as explained by the Supreme Court in the latter decision in Union of India & Others v. Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)]
As noted above, the Assessee had responded to the first section 148 notice (which was required to be construed as a notice under Section 148A (b) of the Act) on 07.06.2022 and therefore the order under Section 148A (d) of the Act and the second notice under Section 148A of the Act was required to be issued within the period of seven days thereafter. In the present case the second 148 notice was issued beyond the period of limitation. The said issue is squarely covered by the decision of this Court in Ram Balram Buildhome Pvt. Ltd. [2025 (2) TMI 55 - DELHI HIGH COURT]
We do not consider it apposite to examine the question as to whether the notice issued has been approved by the competent authority as stipulated under Section 151 of the Act or whether the second section 148 notice was valid.
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2025 (4) TMI 294
Adjusting the refund due to the petitioner against an outstanding demand u/s 245 - HELD THAT:- Section 245 permits the Revenue to set off any demand from the amount to be refunded subject to the only condition of intimation in writing to such person against whom action is proposed to be taken. In the present case, the Revenue has complied with the said provision.
This Court does not find any jurisdictional error in issuing the subject intimation or taking action by the Revenue u/s 245 of the Act.
However, considering the fact that an appeal has been preferred against the outstanding amount and disallowance has been accepted for the relevant Assessment Years in an identical issue, as submitted by learned counsel for the petitioner, this Court is of the view that a good case is made out in favour of the assessee for issuance of a direction to the Appellate Authority that till adjudication of stay application, pre-deposit of 20% of the disputed amount be not insisted upon.
This Court deems it appropriate to direct the Appellate Authority to decide the stay application without insisting upon pre-deposit of 20% of the outstanding demand. The petitioner is also directed to demonstrate before the Appellate Authority that the identical issue has already been covered up in the earlier Assessment Years.
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2025 (4) TMI 293
Reassessment proceedings initiated against the petitioner u/s 148A(b) - AO observed that prima facie the Assessee’s income was taxable under Clause 2(k) of the India-UK DTAA where managerial services were taxable as PE in the State, if they were rendered for more than ninety days in a year - HELD THAT:- Once apparent from the above that the reasons as set out in the impugned order passed u/s 148A (d) was not the information as set out in the notice under Section 148A (b). There was no allegation in the said notice that the Assessee had a PE in India, which forms the entire basis of the order u/s 148A (d). The decision to issue notice u/s 148 of the Act cannot be based on information and grounds that were not set out in notice u/s 148A (b).
In view of the above, the impugned notice issued u/s 148A (b) of the Act; the impugned order passed u/s 148A (d) of the Act and the impugned notice u/s 148 of the Act are set aside. Decided in favour of assessee.
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2025 (4) TMI 292
Demand of 20% of the disputed tax - Rejection of petitioner's stay petitions and rectification petitions by the respondents - HELD THAT:-Though the learned counsel for both sides fought tooth and nail regarding the demand of 20% of the disputed tax, which comes around to a sum of Rs. 126 crore, considering the submission of the learned counsel for the petitioner that the petitioner has voluntarily come forward to deposit Rs. 30 Crore, to which even the learned Senior Standing Counsel for the respondents is not agreable, this Court, considering the vital fact that the petitioner is a state Owned Corporation and it plays an anchor role to the development of Power Sector Projects in the State of Tamil Nadu, as it executes an array of welfare schemes of the Government of Tamil Nadu like
i) Child Protection Scheme, Covid-19 Protection Scheme, Oru Kalla Pooja Schemes, etc., also, the Pension Funds of the State of Universities under Old Pension Scheme and Contributory Pension Scheme are deposited only with the petitioner.
Order - i) The impugned order passed by the second respondent is stayed till the disposals of the Appeals filed by the petitioners before the third respondent, however, the same is subject to the condition that the petitioner deposits Rs. 30 crore of the disputed tax within a period of three weeks from the date of receipt of a copy of this order.
iii) The petitioner is also at liberty to agitate all the issues, that were canvassed herein before the Appellate Authority.
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2025 (4) TMI 291
Reopening of assessment u/s 147 and Demand Notices against a company that was struck off from the Register of Companies - HELD THAT:- Respondent submitted that instantly, the Assessing Officer had also written a Letter to the Standing Counsel before the National Company Law Tribunal (NCLT) to revive the petitioner company, pursuant to which, a Company Petition has been filed before the National Company Law Tribunal (NCLT), Chennai for restoration of the petitioner company in the Register maintained by the Registrar of Companies, Chennai. As further submitted that the aforesaid Company Petition was heard on merits and has been reserved for orders.
The above submission made by respondent has been fairly conceded by for the petitioner.
The impugned Notices, Assessment Orders and Demand Notices passed by the respondent are quashed and the case is remanded back to the respondent to await the final order to be passed by the National Company Law Tribunal (NCLT), Chennai.
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2025 (4) TMI 290
Disallowance of investment write off claimed as a deduction in the computation of taxable total income - HELD THAT:- Admittedly, the assessee has made an investment in furtherance of the objects in the MOA, which has become unrecoverable. A business investment cannot be compared with devaluation of shares, in the teeth of the objects in the Appellants' MOA. The case of ICS Systems related to payment of compensation for non-execution of an agreement that was held to be capital in nature and such a situation does not arise in the present case.
The facts and legal issue has been considered in the assessee's own case for AY 2001-02 and allowed, and in light of the admitted identity of factual and legal position in both the years, we are of the considered view that the appellant must succeed. The substantial questions are answered in favour of the assessee and against the revenue.
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2025 (4) TMI 289
Revision u/s 263 - computing Minimum Alternate Tax (MAT) u/s 115JA - Tribunal held that the prior period expenses cannot be reduced from the book profits computed u/s 115JA even if such expenses have been debited to the Profit and Loss Account in the books and have been allowed in the assessment order and also that Profit and Loss appropriation account does not form part of the Profit and Loss account and as such any amounts displayed under the Profit and Loss appropriate accounts has to be excluded while computing Book Profits
HELD THAT:- The flaw committed by the appellant is in the presentation of the profit and loss account where the expenditure in question has been presented after arriving at the net profit. Perhaps in the interests of transparency, the appellant has classified the expenses in question as prior year expenses insofar as they relate to expenditure in connection with bonus and other expenses that arose in connection with prior years. However, the amounts have, in fact, admittedly, been crystallised and expended only in the financial year relating to assessment year 1998-99.
Had this amount been taken into account prior to the computation of net profit, the Department might not have put up any resistance in accepting the claim. An important point to note is that neither the allowability of the claim, incorrectness of the expenditure nor quantification of the same have been doubted by the Department in the regular computation of income.
Hence, while the argument of the Department to the effect that there should be no adjustment to net profit after determination of the profit is technically correct, in the present case, the adjustments made are allowable adjustments that impact the net profit for the assessment year in question. The true picture should not be lost by virtue of a quirk of presentation of the financials.
The order of the Tribunal confirming the proposal is also, in our view, hyper technical. The Tribunal has proceeded on the assumption that there is a profit and loss appropriation account which is erroneous as there is no such account in the financials produced before us. Substantial question No.2 hence is returned as unanswered in the present facts and circumstances of the case.
Referring to the Accounting Standards (AS) and to the judgment of Khaitan Chemicals & Fertilizers Ltd [2008 (9) TMI 89 - DELHI HIGH COURT]and to the other cases relied upon by that assessee, this Court holds that AS – 5 stipulates that prior period items are income or expenses which arise ‘in the current period’, as a result of errors or omissions in the preparation of financial statement of one or more prior periods.
In the present case, the components of bonus, internal audit fees and power charges had, admittedly, been crystallized only in the relevant previous year. In such circumstances, it is all the more necessary that these amounts must be taken into account for the proper determination of net profit or loss.
Thus, we are of the view that the proposal for revision does not hold any merit and substantial question of law No.1 is answered in favour of the Assessee.
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2025 (4) TMI 288
Penalty imposed u/s 271E and 271D - violation of Section 269SS or 269T - HELD THAT:- We find that there is a transaction between the assessee company and its sister concern. The transaction between the assessee company and its sister concern is essential to the nature of current account. It is further pertinent to mention here that Shri Sanjit Kundu is a common partner in both the firms. It is well settled that the withdrawal of addition made in the partners capital account in cash is not a violation of Section 269SS or 269T. Appeal filed by the revenue is here by dismissed.
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2025 (4) TMI 287
Reopening of assessment u/s 147 - notice beyond three years from the end of the relevant assessment year even though the income escaped assessment does not exceed Rs. 50 lakhs or more - HELD THAT:- AO has passed order u/s.148A(d) of the Act on the basis of non-existent information which is evidenced from the final assessment order passed by the AO.
Therefore, in our considered view if the AO is allowed to reopen the assessment on the basis of information which is not at all available in the file, then, the AO can reopen the assessment by referring some irrelevant information and stated that income escaped assessment exceeds Rs. 50 lakhs or more and the case is fit for issue of notice u/s. 148 of the Act beyond three years and up to ten years is contrary to the law provided u/s. 148 of the Act.
This is because, for this reason alone provision has been made to issue notice u/s. 148A(b) of the Act for causing enquiries by calling replies from the assessee to ascertain the correct facts with regard to the escapement of income and for issue of notice under the relevant provisions of the Act.
AO assumed jurisdiction by passing order u/s. 148A(d) of the Act on the basis of incorrect information and issued notice beyond three years from the end of the relevant assessment year even though the income escaped assessment does not exceed Rs. 50 lakhs or more. Thus, we are of the considered view that the notice issued by the AO u/s. 148 is illegal, void-ab-initio and consequently the assessment order passed by the AO u/s. 143(3) r.w.s 147 is liable to be quashed. Decided in favour of assessee.
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2025 (4) TMI 286
National Faceless Appeal Centre (NFAC) jurisdiction to decide the appeals involving TP adjustments under Chapter-X of the Income Tax Act, 1961 - HELD THAT:- At this stage, it is pertinent to note that the Revenue is not challenging the improper exercise of jurisdiction by the AO/TPO, and rather it is challenging the improper exercise of jurisdiction by the learned CIT(A), NFAC, in passing the impugned orders. Therefore, we are of the considered view that merely because the Revenue is in appeal before us, the same would not restrain it from challenging the improper exercise of jurisdiction by the learned CIT(A). Accordingly, we do not find any merits in the plea raised by the learned AR that the jurisdictional issue cannot be raised to the prejudice of the assessee in the present case. Further, even though the assessee has paid all the taxes and there is no outstanding demand in respect of the assessment years under consideration before us, the same would not absolve the learned CIT(A) from properly assuming jurisdiction while deciding the appeal filed by the assessee.
Therefore, since the appeals filed by the assessee before the learned CIT(A) are decided by the NFAC, which does not have the jurisdiction to decide the same, being the appeals, inter-alia, pertaining to transfer pricing adjustment, we are of the considered view that the learned CIT(A), NFAC, wrongly assumed the jurisdiction while passing the impugned orders in the present case.
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2025 (4) TMI 285
Validity of assessment order based on a non-existing 143(1) intimation - HELD THAT:- The 1st proviso to Section 143(1) provides that an intimation shall be sent to the assessee in case where the loss declared in the return by the assessee is adjusted but no tax, interest or fee is payable by, or no refund is due to him. And the 2nd proviso to Section 143(1) provides that no intimation under sub-section shall be sent after the expiry of nine months from the end of the financial year in which the return was made.
In this case, the intimation u/s. 143(1) dated 10-08-2021 determining the loss as made by CPC but the same was not communicated to the assessee. As per 1st proviso to Section 143(1), the intimation shall be sent to the assessee declaring the loss assessed/adjusted but no tax, interest or fee payable or no refund due to the assessee.
In this case, the intimation was never served on the assessee, after repeated grievance petitions before various authorities, the assessee was served with copy of the intimation through email on 13-01-2025. In the meanwhile, regular assessment and notice u/s. 143(2) was issued on 29-06-2021. After issuance of the 143(2) notice, there is no question of making intimation u/s. 143(1). Therefore the so called intimation is invalid in law, which was not served to the assessee as per 1st proviso to Section 143(1) of the Act.
Final assessment order is liable to be modified as that of the returned loss of Rs. 30.65 crores made by the assessee. Thus the Ground Nos. 1 to 6 raised by the Assessee are allowed.
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2025 (4) TMI 284
Levy of penalty u/s 271(1)(b) - assessee has not filed any plausible explanation for non-compliance of the notices neither at the time of assessment proceedings, penalty proceedings, nor during the appellate proceedings - HELD THAT:- As in the present case, no material has been brought on record by the Revenue to ignore the email addresses considered as “registered email address” as per the provisions of clauses (i) and (ii) of Explanation (t) to section 144B of the Act and to send the notice u/s 142(1) of the Act at the email address which can be considered to fall within the last clause, i.e., clause (vi) of Explanation (t) to section 144B of the Act.
Since in the present case the statutory notice dated 08/02/2023 issued u/s 142(1) of the Act was not sent on the email addresses, which are also recognised as “registered email address” for the purpose of electronic communication between the National Faceless Assessment Centre and the assessee and falls within the first two categories of “registered email address” as per the provisions of Explanation (t) to section 144B of the Act, we find merits in the submission of the assessee in not responding to the notice dated 08/02/2023 issued under section 142(1) of the Act.
The explanation of the assessee falls within the scope of “reasonable cause” within the meaning of the provisions of section 273B of the Act for failure to respond to the notice issued u/s 142(1) of the Act. Therefore, we direct the deletion of the penalty levied under section 271(1)(b). As a result, the grounds raised by the assessee in its appeal are allowed.
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2025 (4) TMI 283
Unexplained money u/s 69A - AO has not accepted the explanation of the assessee with regard to the claim of agricultural income and cash received on sale of Gold - HELD THAT:- Assessee is deriving income from agricultural operations and the question is only what is the extent of agricultural income earned by the assessee for the AY 2015-16 and 2016-17. Since the assessee could not file relevant evidence including the extent of land holdings, in our considered view, going by the agricultural income declared for the AY 2017-18, a reasonable amount of the agricultural income needs to be considered for the purpose of source for cash deposit. Therefore, out of total agricultural income claimed by the assessee for Rs. 9 lakhs, we direct the AO to accept the explanation of the assessee for source to the extent of Rs. 4,50,000/-.
In respect of errors in computation of opening cash in hand as on 1/4/2016, although the assessee has filed relevant evidences including bank account statement, in our considered view, the entire cash withdrawals cannot be considered as savings with the assessee. Therefore, out of differential cash withdrawal of Rs. 7,62,500/- claimed by the assessee, we direct the AO to allow source for the cash deposit to the extent of Rs. 3,50,000/- only. To sum up, the assessee gets further relief of Rs. 4,50,000/- out of agricultural income of the AYs 2015-16 and 2016-17 and further relief of Rs. 3,50,000/- out of cash withdrawal of AY 2015-16 and in total, the assessee gets relief of Rs. 8 lakhs. Therefore, we direct the AO to allow further relief of Rs. 8 lakhs out of the additions sustained by the CIT(A) for Rs. 17,06,950/-. In other words, out of the addition sustained by the CIT(A), the assessee gets relief of Rs. 8 lakhs and the balance addition of Rs. 9,06,950/- is sustained.
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2025 (4) TMI 282
Addition in respect of cash seized from locker - CIT(A) deleted addition - HELD THAT:- CIT(A) has found the cash to be accounted in the hands of Temple Trust. Since the audited accounts of Temple Trust are not disturbed and the exemption benefits of Temple Trust are not disturbed by the department, there is no reason to disturb the findings of ld. CIT(A) and the factual acceptance of same in the case of Vinod Kumar Bajaj [2024 (11) TMI 1059 - ITAT DELHI], thus without entering into the merits of assertions again on first principles, we are inclined to follow the co-ordinate bench decision, and find no substance in the grounds no 1,2 and 4 of revenue qua the present assessee too.
Cash in hand shown in the audited books / cash book of the business concerns - Since the ld. AO having opportunity in remand proceedings to examine the veracity of claim of assessee has failed to rebut the same with any material discrepancy in the books of business concerns of the group, the conclusion of ld. CIT(A) qua the amount of Rs. 19,26,234/- deserve no interference.
Addition of Rs. 3,29,445/- in the hands of assessee, we are of considered view that the existence, composition and operations of Vikram Bajaj (HUF) being not pleaded immediately at time of search statement, so we find no error in the findings of ld. CIT(A), while sustaining the addition to extent of Rs. 3,29,446/-. The grounds of both the sides have no merit.
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