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Income Tax - Case Laws
Showing 321 to 340 of 175842 Records
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2025 (6) TMI 1745
CIT(Appeals) justification in dismissing the appeals filed by the assessee on account of non-prosecution and non-participation in the appellate proceedings - ex-parte order u/s. 153A r.w.s. 144 - HELD THAT:- We are unable to persuade myself to concur with the manner in which the CIT(Appeals) had proceeded with and disposed off the appeal without adverting to the issue and the grounds, based on which, the impugned order was assailed before him. CIT(Appeals) ought to have called for the records, and adjudicated upon the specific grounds of appeal, based on which, the impugned addition was assailed by the assessee before him.
We are unable to persuade myself to accept the manner in which the appeal of the assessee has been disposed off by the CIT(Appeals). In my considered view, once an appeal is preferred before the CIT(Appeals), it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal on account of nonprosecution of the same by the assessee. In fact, a perusal of Sec.251(1)(a) and (b), as well as the "Explanation" to Sec.251(2) of the Act reveals that the CIT(Appeals) remains under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per the mandate of law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution.
The aforesaid view is fortified in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) [2016 (5) TMI 290 - BOMBAY HIGH COURT]
Thus, not being able to persuade myself to subscribe to the dismissal of the appeal by the CIT(Appeals) for non-prosecution, therefore, set-aside his order with a direction to dispose off the same on merits. CIT(Appeals) shall in the course of the de-novo appellate proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty so substantiate his claim based on documentary evidence, if any.
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2025 (6) TMI 1744
Protective additions to the income of the appellants - alleged accommodation entries and unaccounted commission income - substantive additions having been made and confirmed in the hands of directors/related persons.
HELD THAT:- Hon’ble apex court in Lalji Haridas Vs. ITO [1961 (7) TMI 8 - SUPREME COURT] has settled the issue long back that when there arises a doubt in the mind of the AO that a particular income might be taxable in more than one assessee’s hands, he could indeed make such protective addition so as to protect the interest of the Revenue as per ‘ex-abundat cautela” i.e. as a matter of abundant caution. We now advert to the Revenue instant identical sole substantive grievance wherein it seeks to revive the impugned protective additions.
We are of the considered view that allthough there would be no dispute about the foregoing settled legal propostion involving a protective assessment, the facts herein stand on a different footing since there is a clear cut finding that the corresponding substantive additions in case of Diroctor/Sh. Arun Tyagi involving former Sh. Ram Prakash Bhatia in the latter assessees’ case, had been duly confirmed.
And also that both these assessees are found to be mere namelanders only without having derived any independent taxable income. We accordingly are of the considered view that the learrned CIT(A) has rightly deleted the impugned protective additions after only confirming the corresponding substantive additions and therefore, the Revenue’s instant identical sole grievance deserves to be rejected. Ordered accordingly.
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2025 (6) TMI 1743
Validity of proceedings u/s.147 against dead person/assessee - consequential direction as contemplated u/s.159 - HELD THAT:- Ostensibly, the legal heir of the assessee (since deceased), had in the course of the appellate proceedings, brought the fact about the death of the assessee to the notice of the CIT(A). However, we find that the CIT(A) despite having been intimated about the fact that the assessee had expired failed to implead his legal heir and passed the order in the name of the deceased assessee.
As stated by the AR, and rightly so, as per the settled principle of law, no order can be passed against a dead person, and thus, any proceedings taken against the deceased assessee shall be continued against the legal representative from the stage at which it stood on the date of the death of the deceased.
In a case where an assessee dies pending any assessment proceedings, the provisions of Section 159 get attracted. Accordingly, it is incumbent on the A.O to ensure compliance with sub-section (2) of Section 159 before any order is passed. The aforesaid view is supported by the judgment of Dalumal Shyamumal [2004 (11) TMI 57 - MADHYA PRADESH HIGH COURT] as observed that as the A.O had framed the assessment in the name of the assessee (since deceased), therefore, assessment so framed was a nullity. However, the Hon’ble High Court was of the view that once the assessment order was held to be nullity, then the Tribunal should have given a consequential direction as contemplated u/s. 159 of the Act to the A.O so that proper assessment order could be passed.
Thus, remand the matter to his file for ensuring compliance with Section 159(2) of the Act for passing an appropriate order after validly putting to notice the legal representative/representatives of the deceased assessee. CIT(Appeals) is also directed to consider the submissions that were filed by the assessee before him on 14.08.2024.
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2025 (6) TMI 1742
Additions against Unsecured loan - Scrutiny proceedings u/s 143(3) - addition mainly for the reasons that notice u/s 133(6) issued by the AO was not complied by M/s Santosh Tradelink Ltd. (Third party)
HELD THAT:- AO has made attempt by way of sending notice u/s 133(6) at the two addresses of assessee and letter to the Chairman/Secretary of the Society, where office of said party was located and also by way of deputing Ward Inspector for verification of the address. But the said party was not found to be in existence at that address provided.
Assessee submitted that said party had complied to the notice u/s 133(6) of the Act but said reply was received in the office of the AO after completion of the assessment. Since the identity of the party could not be established in assessment and appellate proceedings, the assessee is seeking one more opportunity.
Thus,we feel it appropriate to restore this issue back to the Assessing Officer with the direction for issuing fresh notice u/s 133(6) of the Act to M/s Santosh Tradelink Ltd at the address which will be provided by the assessee to the AO. Thereafter, the Assessing Officer may examine the issue of addition u/s 68 of the Act in accordance with law. The ground of the appeal of the assessee are accordingly allowed for statistical purposes.
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2025 (6) TMI 1741
Assessment u/s.144 - addition of the deposits in the bank account as well as in the Post Office account - Non filing of return of income for the impugned assessment year - HELD THAT:- From the perusal of the computation of total income and balance sheet etc, filed in the paper book, we find that all the deposits in the form FDs, RDs account and other cash deposits find place in the assets shown in the balance sheet and also the income earned thereon in the shape of interest etc are duly taken to the computation of total income where after considering other incomes and investments made for deduction under Chapter VIA, the total income of the assessee was computed which is lower than the amount maximum not chargeable to tax.
Further from the perusal of the fund flow statement, we find that there was opening balance taken from the balance sheet of preceding year and the closing balance was taken to the next year where the return was also not filed being income not exceeding the amount not chargeable to tax.
It would be fair and reasonable to set aside the matter to the file of the Assessing Officer with the direction to examine whether all these deposits are forming part of the balance sheet submitted before us.
On verification, if the AO found that all these forming part of balance sheet, then no addition is required to be made as the income computed on such Balance Sheet is lower than the amount not chargeable to tax. Appeal of the assessee stands partly allowed for statistical purposes.
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2025 (6) TMI 1740
Addition u/s 68 - unexplained cash credit being unexplained unsecured loans - HELD THAT:- Assessee has furnished before us the details of loans taken and the creditworthiness of persons giving loan to the assessee. DR has not provided any materials to dislodge the claim of the assessee regarding the identity, genuineness and creditworthiness of the transactions.
CIT(A) held that once the assessee has furnished the identity, details of the investor alongwith their bank account statement showing credit worthiness and genuineness. The onus shifted on the AO to prove that the investor did not have sufficient balance of funds to provide the money to the assessee company. We are of the considered view that no adverse inference can be drawn from such findings of the CIT(A) and the conclusions of the CIT(A) cannot be faulted with.
Since the assessee has successfully explained the three ingredients necessary to discharge the onus cast upon her, section 68 of the Act is clearly not applicable. Appeal of revenue dismissed.
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2025 (6) TMI 1739
Denying benefit of exemption u/s 11 - charitable activity u/s 2(15) - assessee is predominately a mutual association and that on the principle of mutuality the interest income and other income are taxable - As per AO assessee is engaged in the activity of providing / rendering services to Members / Non-members in relation to trade, commerce or business for a fee - AR submitted that the 1st proviso to section 2(15) cannot be applied in assessee's case for reason that the assessee is not involved in carrying on any activity in the nature of trade, commerce or business for a cess or fee or any other consideration - HELD THAT:- The assessee is a charitable trust existing since 2001, having registration under section 12A of the Act.
In assessee's case it is not in dispute that it is a charitable organization since the assessee is registered under section 12A of the Act and that the revenue till now has not held the assessee to be otherwise. Now coming to the question of whether the assessee is a mutual organization, from the perusal of the financial statements of the assessee, we notice that the income of the assessee consist of subscription fee from members, sponsorship fees for annual event and bank interest. Further from the perusal of the brochure of the annual event, we notice that the event is held for the benefit of insurance consumers and brokers and that the events conducted without collecting any fees.
Therefore, in our considered view there is merit in the submission of the ld. AR that the assessee is not only for the benefit of members but is also for the benefit of insurance consumers from general public. In our view when the assessee is engaged in charitable activity in the nature of advancement of any other object of general public utility, it cannot be said that the assessee is exclusively engaged in the activities beneficial only to its members. Therefore, we are of the view that the action of the AO in applying the principle of mutuality in assessee's case is not sustainable and accordingly the addition made towards interest and other income on that ground is not tenable.
Whether proviso to section 2(15) is applicable in assessee's case? - From the plain reading of the section, it is clear that the Trust whose objects is for the advancement of any other object of general public utility shall be held to be not for charitable purpose if it involves the carrying on of any activity in the nature of trade, commerce business for rendering of any service to any trade, commerce or business for a cess or fee or any other consideration. We also notice that the income of the assessee does not contain any revenue from any activity in the nature of trade, commerce or business. Further the participation in the annual meet for which the sponsorship fees is received is free of cost and therefore cannot be held to be a service for a fee for rendering service. Considering these facts we are of the view that the AO is not correct in stating that the 1st proviso to section 2(15) is applicable in assessee's case without bringing anything on record to substantiate the claim. See Ahmadabad Urban Development Authority [2022 (10) TMI 948 - SUPREME COURT]
We are of the view that the AO is not correct in denying the benefit of section 11 to the assessee by invoking the proviso to section 2(15) of the Act and in holding that the principle of mutuality is applicable to assessee to make an addition towards interest and other income. Accordingly, the AO is directed to delete the addition made in this regard.
Addition towards interest and other income by applying the principle of mutuality to the assessee - Since we have held that the assessee is entitled to claim exemption u/s 11 and that the principle of mutuality is not applicable in assessee's case.
Assessee appeal allowed.
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2025 (6) TMI 1720
Addition u/s 56(2)(vi) - Agreement to sell - forfeiture of earnest money - Application of section 51 - as decided by HC [2013 (2) TMI 74 - DELHI HIGH COURT] before a plea based on section 56(2)(vi) of the said Act can be taken, a foundation has to be laid that the transaction was without any consideration. No such foundational plea had been taken before the Tribunal. Apart from this, we find that the Tribunal has rightly noted that the provisions of section 51 of the said Act would come into play as it specifically covers this type of a transaction. Once the transaction has been held to be genuine, there is no question of the transaction being without any consideration.
HELD THAT:- No good reason to interfere with the impugned order passed by the High Court of Delhi at New Delhi.
The Civil Appeal is, accordingly, dismissed.
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2025 (6) TMI 1719
Reopening of assessment - reasons to believe - alleged bogus sub contract with Sadbhav Engineering Ltd as well as alleged on-money received on sale of agricultural lands by the petitioners
HELD THAT:- On perusal of the reasons recorded, it appears that the AO has failed to disclose or provide any incriminating material allegedly found during the search/survey of residential premises of Shri Pritamkumar Rameshbhai Patel pertaining to the assessee indicating that the petitioners have understated the income or claimed excessive losses, deductions etc. Instead the respondent has relied on unsubstantiated information regarding bogus contact worth either Rs. 21 crores or Rs. 42 crores with Sadbhav Engineering Ltd. with final amount remaining unclear so far as Assessment Year 2014-2015 in case of Pravinkumar Premchandbhai Patel.
With regard to transaction of sale of agricultural land is concerned, the respondents have accepted the reply filed in case of Gunvantbhai Premchandbhai Patel who is co-owner of such sale transaction in the assessment order. Therefore, the very basis of reopening of alleged receipt of on-money by the petitioners on sale of four parcels of agricultural land is not in existence as no addition has been made in case of other co-owner which clearly shows that there is absence of any tangible material with the respondent assessing officer at the time of recording the reasons which is a mandatory requirement for assumption of jurisdiction for reopening for formation of reasonable belief for escapement of income.
It is also pertinent to note that so far as Special Civil Applications the assessment orders have been passed on the same day i.e. 30.03.2022 when this Court issued the notice and granted stay of further proceedings. Therefore, assessment orders are also challenged whereby additions are made in absence of any reply filed by the petitioners in view of challenge to the notice of reopening before this Court. It is also pertinent to note that the AO has made addition for alleged on-money received without any basis.
Pursuant to order passed by this Court, Respondent has also placed on record relevant extract from the record available online forming part of the original record of the petitions and on perusal of the same, it appears that the Insight Portal only reveals that assessee has entered into bogus sub-contract with Sadbhav Engineering Ltd for Assessment Years 2013-2014 and 2014-2015 for Rs. 21 crores in case of Pravinkumar Premchandbhai Patel on the basis of seized material in case of Pritamkumar R. Patel which has no nexus with the petitioner Pravinkumar Premchandbhai Patel.
Assessee appeal allowed.
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2025 (6) TMI 1718
Validity of CIT (A)/NAFC order as acted without looking into the records - HELD THAT:- No hesitation in recording that this seems to be a case of gross negligence if not a case of dereliction in duty. CIT (A) at NAFC who passed the order has acted without looking into the records.
At such a high position where he is required to consider each and every aspect of the matter in appeal, it is difficult to believe that an officer at his level would act in such a manner that it would result in causing hardship to the assessee and multiply the litigation. This Court is confining it’s observations with regard to the order impugned in the present writ application only.
In the admitted position, this Court sets aside the impugned order as contained in Annexure ‘P/1’ to the writ application and directs the CIT (A) to consider the appeal afresh - CIT (A) has offered to give a personal hearing to the petitioner which must be given and a reasoned order be passed within a period of three months from the date of receipt/production of a copy of this order.
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2025 (6) TMI 1717
Validity of reassessment proceedings - non-service of the show-cause notice u/s 148A(b) on the correct email ID of the petitioner - HELD THAT:- As respondent has updated his new Email ID upon which, intimation under section 143 (1) has been sent by CPC but the same was not reflected in the ITBA system due to non-updation of the system.
Assessee also confirmed that the aforesaid Email ID of the petitioner is correct and is in operation as on today.
Considering the above submissions, impugned order under section 148A(d) and the notice u/s 148 are hereby quashed and set aside and the matter is remanded back to the respondent No. 3 so as to provide an opportunity to the petitioner-assessee to file a reply to the notice u/s 148A(b) and thereafter, give an opportunity of hearing to the petitioner and pass a fresh de novo order under section 148A(d) - Decided in favour of assessee.
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2025 (6) TMI 1716
Reopening of assessment - information available with the department in absence of any return of income filed by the petitioner - as argued petitioner was denied the opportunity of hearing as mandated u/s 144B(6)(vii) thereby violating principles of natural justice - HELD THAT:- Petitioner has not filed any return of income disclosing the transaction of sale of immovable property during the year under consideration. It is also the case of the petitioner that the petitioner has entered into consent terms with its lender and to satisfy the debt, has sold the property which was mortgaged by the petitioner to the third party for a sale consideration of Rs. 40 Lakh.
Be that as it may, the fact remains that the petitioner has not filed the return of income and therefore, the question of giving any opportunity of being heard to the petitioner does not arise. More particularly, when the petitioner has also admitted that no return of income has been filed disclosing the sale transaction entered into between the petitioner and its lendor for sale of the mortgaged property in favour of the third party to satisfy debt so as to compute the income properly on the face of the record, there is an escapement of income resulting into loss of revenue.
We do not entertain this petition as the petitioner is required to comply with the impugned notice issued under section 148 of the Act.
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2025 (6) TMI 1715
Rejection of petition u/s 264 - petitioner had failed to file any reply or produce any documentary evidences to demonstrate the case before the AO - reason given by the petitioner for not participating in the assessment proceedings was because of change in the name of the Management and notices were served in the Old PAN Number instead of New PAN Number, hence, he was not aware of the notices - HELD THAT:- This Court is of the considered opinion that, merely because of non participation of the assessment proceedings, the valuable right of the petitioner would not be deprived of to prosecute a case under Section 264. Initially, the petitioner's society had been registered as a Trust and subsequently, it has been converted into a society.
So, therefore some practical difficulties were aroused in the management of the society, due to the change in the name of the management.
Considering this aspect, in the interest of justice, to give one more opportunity to the petitioner, this Court is inclined to set aside the impugned orders passed under Section 264 along with the best judgment assessment orders passed under Section 143 & 147 and remand the matter to the Assessing Officer / 2nd respondent for fresh consideration.
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2025 (6) TMI 1714
Violation of principles of natural justice - No opportunity of personal hearing to the Petitioner - HELD THAT:- It is settled law that violation of principles of natural justice is a failure of due process. If any order is passed against the petitioner with demand, that order has to be passed after giving an opportunity of personal hearing to the petitioner otherwise, it will amount to depriving the interest of the petitioner and the same amounts to violation of principles of natural justice.
In the case on hand, the impugned order was passed without taking notice of the replies filed by the petitioner and also without giving an opportunity of personal hearing to the Petitioner and therefore the same is liable to be set aside.
Accordingly, this Court passes the following order-
The impugned order is set aside and the matter is remanded back to the Respondents, subject to the payment of a sum of Rs. 5,000/- to the Adyar Cancer Institute, situated at Chennai, within a period of 2 weeks from the date of receipt of copy of this order and the setting aside of the impugned order will take effect from the date of payment of the said amount. Upon production of proof with regard to the payment of a sum of Rs. 5,000/- as stated above, the Respondents shall activate the Departmental portal, within a period of two weeks, in order to enable the petitioner to file his reply.
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2025 (6) TMI 1713
Applicability of section 40(A)(2)(b) - payments made on account on consultancy and development charges - excessive or unreasonable payments - HELD THAT:- In the case of IKEA Trading (India) (P.) Ltd. [2020 (7) TMI 48 - ITAT DELHI] the ITAT held that where Assessing Officer had not brought any comparable case to demonstrate that payments made by assessee to directors were excessive/unreasonable, Commissioner (Appeals) had rightly deleted addition.
As initial onus is on the AO to assess fair market price and give comparable instances and looking into the instant facts, where no such exercise was done by the AO and no attempt was made by the AO to establish that the professional fees paid by the assessee to the concerned parties was excessive, we are of the considered view that there was no discharge of burden by the Revenue u/s 40(A)(2)(b) of the Act and hence, no disallowance is called for in the instant case. Appeal of the assessee is allowed.
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2025 (6) TMI 1712
Revision u/s 263 - deduction of donation u/s 80G in respect of certain donation - HELD THAT:- On careful perusal of assessment order, we find that case was selected for scrutiny on the issue of large amount of donation. No doubt that the assessing officer during the assessment examined the issue and disallowed donation u/s 80G to Urvashi Foundations.
Though, there is no discussion about the donation to other charitable trust or institution, however the assessing officer has sought details of donations to all about such charitable trust and institution. We find that the assessee also furnished all required details to the assessing officer.
Thus, the assessing officer impliedly accepted the donation to such charitable trust or institution. We find that recently in DCIT Vs Gabriel India [2025 (5) TMI 863 - ITAT MUMBAI] on similar issue where the assessee–company claimed deduction u/s 80G at the rate of 50% of CSR expenses and furnished receipts of donees evidencing eligibility of deduction under section 80G allowed claim of such assessee.
Considering the fact that view taken by assessing officer while allowing 50% of donation under section 80G out of CSR expenses are in accordance with the decisions of various benches of Tribunal. Thus, the view taken by assessing officer cannot be said to be erroneous. Thus, the pre-requisite twin conditions for exercising jurisdiction u/s 263 has not meet out in the present case hence we quash / set aside the order of Pr. CIT. Grounds of appeal raised by assessee are allowed.
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2025 (6) TMI 1711
Disallowance u/s 14A read with Rule 8D - exempt income to be earned in the relevant year for invoking disallowance - HELD THAT:- CIT (A) has rightly directed the ld. AO to verify and recompute the disallowance u/s 14A read with Rule 8D of the Rules considering only those investments which have yielded exempt income during the year.
MAT computation - Disallowance u/s. 14A rwr 8D is a notional disallowance and cannot be imported while computing book profit u/s. 115JB.
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2025 (6) TMI 1710
Disallowance u/s 14A - disallowance of expenses incurred in relation to exempt income - HELD THAT:- We have taken note of the fact that the AO has not given any reasoning for rejecting the assessee’s suo-moto working of disallowance u/s 14A of the Act.
As contended that the AO could not enhance the disallowance u/s 14A of the Act without recording any reason for rejecting the assessee’s working of disallowance u/s 14A of the Act.
We find that this case is squarely covered by the decision of the Co-ordinate Bench in assessee’s own case [2024 (5) TMI 1584 - ITAT DELHI] and the decision of Jaypee Ventures Pvt. Ltd.[2018 (1) TMI 1759 - DELHI HIGH COURT].
We therefore, respectfully following the decision of (supra), we are inclined to delete the disallowance u/s 14A confirmed by the CIT(A). Thus, we order accordingly and allow the respective grounds raised by the assessee. The assessee gets consequential relief in this regard.
Appeal of assessee is allowed.
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2025 (6) TMI 1709
Validity of the reopening of the assessment - reason to believe - Reliance on information for the transactions of purchase and sale of immovable properties - non independent application of mind - borrowed satisfaction - HELD THAT:- As in the course of assessement proceedings, if the assessee is able to explain the source of investment, then no addition was required to be made. Hence in the peculiar facts and circumstances of the case, we do not find any merits in the grounds challenging the validity of the reopening of the assessment. The decisions relied upon by the assessee cannot apply to the facts of the assessee's case when the assessee has not filed any return of income and also not produced any supporting evidence to explain the source of the said investment.
Unexplained investment - assessee failed to furnish the creditworthiness of the persons from whom the assessee claimed to have borrowed the amounts as well as the genuineness of the transactions - CIT(A) has confirmed the addition made by the Assessing Officer after considering the remand report of the Assessing Officer on the point that most of the Bank Accounts of the creditors were having the cash deposits prior to the payment made to the assessee. Now the assessee has filed additional evidence in the shape of confirmation as well as the identity proof of the loan creditors which needs to be examined and verified at the level of the Assessing Officer. Accordingly, in the facts and circumstances of the case and in the interest of the justice, we set aside the matter to the record of the AO for proper verification and examination of the additional evidence filed by the assessee and then decide the issue as per law after giving an opportunity of hearing to the assessee.
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2025 (6) TMI 1708
Estimation of commission income adopting net profit @12% - ex-parte order of CIT(A) - CIT(A) not giving an opportunity to the assessee to furnish the relevant record as well as submissions - HELD THAT:- AO has estimated the commission income of the assessee by adopting net profit @12% which is without any basis and further the same is on the higher side and arbitrary.
AO has not given any basis for estimation of the commission income @ 12% as against the income declared by the assessee at Rs. 1,25,950/-. Further, the entire deposits in the bank account of the assessee are treated by the AO as business income.
Therefore, when the learned CIT(A) has passed the ex-parte order, we set aside the impugned order and remand the matter to the record of the learned CIT(A) for fresh adjudication after giving an appropriate opportunity of hearing to the assessee. Appeal filed by the assessee is allowed for statistical purposes.
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