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Income Tax - Case Laws
Showing 481 to 500 of 175845 Records
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2025 (6) TMI 1456
Speculation loss - addition on account of trading transactions on NSEL platform and loss incurred - HELD THAT:- As decided in decision of ITAT in assessee’s own case in [2022 (11) TMI 885 - ITAT AHMEDABAD] since the transaction was not materialized in end the settlement amount was received in consonance with these business transactions from NSEL and thus it cannot be treated as speculative loss and is a part of business loss. As rightly contended on behalf of the assessee-company, the exercise of re-characterization of transactions in the light of statement given by Shri Nilesh Patel should be restricted to only determination of correct taxable income.
The relevant purchase and sales transactions were entered into by the assessee-company in order to avail the funds and, therefore, the loss incurred in the said transactions actually represented cost of such funds which was a business loss. The adverse inference drawn by the learned CIT(A) against the assessee on the basis of withdrawal of such loss partly was also not correct as the reasons for such withdrawal proposed by the assessee were duly explained and the fact that the assessee-company by entering into these transactions had availed finance for the purpose of business was duly established. As regards the applicability of TDS provision, the learned Counsel for the assessee has pointed out from the relevant details of transactions that the sale proceeds were received by the assessee-company from different entities while payment towards the purchase was made towards different entities. The cost of finance thus was not paid to the party from whom the finance was actually availed and the applicability of TDS, therefore, was not warranted. Moreover, the cost incurred by the assessee for availing finance was not strictly in the nature of interest and the party selling the goods having offered the same for taxation, there is no obligation of deduction of tax at source by the assessee. Having regard to all these facts of the case, we are of the view that the disallowance made by the Assessing Officer and confirmed by the learned CIT(A) on account of alleged speculation loss is not sustainable and deleting the same - Assessee appeal allowed.
Disallowance on account of debit notes received by the assessee from N.K. Proteins Ltd by treating the same as unexplained expenditure - HELD THAT:- There was a Memorandum of Understanding entered into between the assessee-company & NKPL and the same was acted upon by both the sides by raising debit/credit notes for the difference in price charged by the assessee to NKPL and the price actually realized by NKPL from corresponding exports as the same was to be transferred to the assessee-company.
We are inclined to accept the claim of the assessee that the amount of debit notes in question was its business expenditure being the difference in sale price charged and actually realized which is allowable as deduction. In that view of the matter, we delete the disallowance made by the Assessing Officer and confirmed by the learned CIT(A) on this issue and allow Ground of the assessee’s appeal.
Loan Waiver / Income - Hon’ble Supreme Court in the case of Mahindra and Mahindra Ltd. [2018 (5) TMI 358 - SUPREME COURT] wherein the Court considered the applicability of Section 28(iv) and Section 41(1) of the Income Tax Act, 1961, in relation to the taxability of amounts waived, whether pertaining to capital or interest and held Section 28(iv) of the IT Act does not apply on the present case since the receipts are in the nature of cash or money.
Section 41(1) of the IT Act does not apply since waiver of loan does not amount to cessation of trading liability. It is a matter of record that the Respondent has not claimed any deduction under Section 36 (1) (iii) of the IT Act qua the payment of interest in any previous year. Decided against revenue.
Purchase of Castor Seeds on NSEL Platform to the Special Auditor - AO held that the goods were received by the assessee without any payment and the same is settled against other party’s account - assessee submitted that the castor seeds have been purchased on actual delivery bases and against that purchases payments have been made through settlement account - HELD THAT:- As The assessee has also furnished the details of purchases & sales and ledger account of purchase parties reflecting payments made thereof. Keeping in view these undisputed facts, we hold that no addition is called for. The appeal of the Revenue on this ground is dismissed.
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2025 (6) TMI 1455
Denial of benefit of deduction u/s.80P - commission income earned from MSEDCL as well as interest income on deposit with MSEDCL and other Government Securities - HELD THAT:- Revenue authorities failed to dispute this fact that the deposits with MSEDCL have been made by the assessee for carrying out the activity of earning commission and similarly the deposits made with the Government Securities are on account of the mandatory deposits for maintaining liquidity ratio to be maintained by the Credit Cooperative Societies in order to carry out its activity.
As decided in the case of CIT Vs. Ahmednagar Dist. Coop. Bank Ltd [2003 (7) TMI 50 - BOMBAY HIGH COURT] has laid down that the activity of collecting bills, dues and charges for and on behalf of the Government, local authority, MTNL, BEST, MSEB etc., is akin to banking activity and is eligible for deduction u/s.80P(2)(a)(i)
Thus, Assessee is eligible for deduction u/s.80P for the commission income earned from MSEDCL.
Similarly, the interest income earned from deposits with MSEDCL as well as mandatory deposits in Government Securities by the assessee society for carrying out the activity are akin to the main objects of the assessee society and therefore since the commission income is eligible for deduction u/s.80P(2)(a)(i) of the Act being incidental in nature and not having earned interest from deposit made from surplus funds with any Scheduled Banks, the same deserves to be allowable as deduction u/s.80P(2)(a)(i) of the Act. Accordingly, the finding of CIT(A) is set aside and the grounds raised by the assessee are allowed.
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2025 (6) TMI 1454
Nature of interest on custom Duty on import of material and service tax - 'Compensatory' Or 'Penal' - Payment of fines and penalties under sections 125(1) and 112(a) of the Customs Act, 1962 - disallowance u/s. 37 - Intimation u/s 143(1) addition - violation of provisions of Custom Act - payments were made before the due date and some mistakes are there in Tax Audit Report - employees' contribution to the Provident Fund (PF) fund - PF contribution disallowance.
HELD THAT:- At the time of hearing, Ld. Counsel for the assessee submitted the payments are not in the penal nature as and they are not penalty. He submitted that they are fines and thus he referred the decision of the tribunal in the case of Akshay Khetterpal vs. ACIT [2022 (6) TMI 122 - ITAT DELHI], by which the instant issue is squarely covered. Ld. DR could not controvert the aforesaid proposition.
Respectfully following the aforesaid precedent, we set aside the order of the Ld. CIT(A) and delete the addition in dispute and accordingly, allow the ground raised by the assessee.
Disallowance u/s. 36(1)(va) - PF contribution - Upon hearing both the parties and careful consideration, we find that law is quite settled by Apex Court in the case of Checkmate Services Pvt. Ltd.[2022 (10) TMI 617 - SUPREME COURT (LB)], for the proposition that payment made beyond the due date in PF Act is not allowable.
However, in the interest of justice, on the plea of the ld. Counsel for the assessee that some payments were wrongly shown as made beyond the due date, however, the same were made before the due date and on this aspect, this issue needs to be remitted back to the AO with the directions to consider the issue afresh and allow only those payments which are actually made before the due date, as specified in the respective Acts. We hold and direct accordingly.
In the result, the Appeal filed by the Assessee is partly allowed.
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2025 (6) TMI 1453
Reopening of assessment u/s 147 - addition towards source for the purchase of property as unexplained investment - HELD THAT:- We are of the considered view that, the assessee is able to explain the source of investment in purchase of property to the tune of Rs. 42 lakhs out of the known source of income including loan borrowed from various persons. To support the contention of the assessee, the assessee has filed relevant bank statements and also confirmations from the parties.
All these evidences were filed before the AO and the CIT(A), but, both the authorities have ignored the evidences filed by the assessee and confirmed the additions towards investment in purchase of property.
Therefore, we are of the considered view that, AO and the CIT(A) has erred in making addition towards investment in purchase of property. Thus, we set-aside the order of the CIT(A) and direct the AO to delete the addition made towards unexplained investment in purchase of property. The grounds of appeal of the assessee are accordingly allowed.
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2025 (6) TMI 1452
Reopening of assessment u/s 147 - unexplained source of cash deposit of loan taken from the bank to advance loan to it’s members for agricultural activities - as per assessee cash is re-deposited into the bank account in the regular course of business during the year under consideration - CIT(A) sustained the addition on the ground that the assessee-society failed to prove the ‘purpose’ of taking loan from the bank.
HELD THAT:- AO had made the addition in absence of return of income either u/sec.139 or u/sec.148 of the Act, ignoring the explanation furnished by the assessee-society along with relevant documentary evidences i.e., bank statements etc. - AO also denied the deduction claimed by the assessee-society u/sec.80P disclosed by the assessee-society as it’s net profit under the Head “Profit and Gain from Business or Profession”, in absence of filing of return of income u/sec.139 of the Act.
In this view of the matter and considering the facts and circumstances of the case, we deem it fit and appropriate to restore the instant issues back to the file of AO for de novo verification after providing due opportunity of hearing to the assessee society. Accordingly, the grounds raised by the assessee-society are allowed for statistical purposes.
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2025 (6) TMI 1451
Penalty u/sec.271B - not getting it’s books of accounts audited as per the provisions of sec.44AB - HELD THAT:- We find that various Courts and Tribunals have taken a consistent view that filing of tax audit report on or before the due date of filing of return of income is although mandatory in nature, but, if such tax audit report is made available to the AO before he completes the assessment for the relevant assessment year and further, if the assessee explains the reasons for the delay in filing of the tax audit report to the satisfaction of the AO, then, there is no reason for levy of penalty u/sec.271B of the Act.
In the present case, the assessee claims that it has obtained relevant tax audit report in Form 3CD on 26.09.2014. Could not filed before the AO, but, the same has been filed before the CIT(A). The assessee has filed one un-signed copy of Form-3CA and Form-3CD reports before the Tribunal.
We are not sure whether such Form-3CA/Form- 3CD reports are filed before the learned CIT(A) or not. Therefore, to ascertain the correctness of claim of the assessee that it has obtained relevant tax audit report on 26.09.2014 and also the same has been filed before the CIT(A), we set-aside the issue to the file of AO.
Thus, we set-aside the order of the CIT(A) and restore the matter back to the file of AO for fresh adjudication. AO is directed to verify the claim of the assessee in light of any evidences that may be filed by the assessee including the Form-3CA/Form- 3CD reports and also proof of such reports before the CIT(A) and take appropriate decision as per law. Accordingly, the grounds of appeal of the assessee are allowed for statistical purposes.
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2025 (6) TMI 1450
Validity of reopening of assessment - order passed by the CIT(A) was an exparte order on account of non-prosecution/ no representation on behalf of the assessee - HELD THAT:- Assessee was divested on account of sufficient cause for which he was not able to appear before the Ld. CIT(A), however, it is also noticed that the assessee had not furnished requisite explanations towards the huge cash deposits in his bank account before the Ld. AO, which he could have offered before the First Appellate Authority, who had decided the appeal without properly communicating about date of hearing to the assessee as per mandated of law, thus, his decision was considering the perspective of the assessee.
In view of such facts and circumstances, wherein both the parties have not complied the duties entrusted upon them, we do not find it appropriate to adjudicate the issue, which were not considered and adjudicated by revenue authorities, in accordance with the law, we, therefore, are of the considered opinion that, in the interest of justice, it would be appropriate to restore the matter to the file of Ld. CIT(A) to re-adjudicate the issues afresh after affording reasonable opportunity of being heard to the assessee.
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2025 (6) TMI 1449
Amount received on compulsory acquisition of land chargeable to tax as short term capital gain - addition rejecting the claim of appellant and denying exemption u/s.10 - Whether amount received by the assessee on compulsory acquisition of her land under NHAI Act, 1956 is taxable under the Income Tax Act, 1961? - HELD THAT:- We find that a similar issue had come up before the Tribunal for adjudication in the case of M/s. Heritage Buildcon Pvt. Ltd. [2023 (8) TMI 1018 - ITAT RAIPUR] wherein after relying upon a host of judicial pronouncements a/w. CBDT Circular No.36/2016, dated 25.10.2016, it was held that the compensation received on acquisition of the lands of the assessee company under NHAI Act, 1956 i.e. an enactment falling under the “Fourth Schedule” of the RFCTLARR Act, 2013, as per Section 96 r.w.s. 105(1) of RFCTLARR Act, 2013 r.w. OM dated 06.06.2019 of the CBDT, the compensation received by the assessee company was not exempt under RFCTLARR Act, 2013.
As the lands in question had been acquired by the State Government under the NHAI Act, 1956 i.e. an enactment specified in the “Fourth Schedule”, therefore, on a conjoint reading of Section 96 r.w. Section 105(1) of the RFCTLARR Act, 2013, as had been deliberated by us at length hereinabove in the case of M/s. Heritage Buildcon Pvt. Ltd. & Ors Vs. Pr. CIT (supra), the assessee could not be conferred with any right of exemption of income-tax on acquisition of her lands. Accordingly, finding no infirmity in the view taken by the CIT(Appeals), we uphold his order. Thus, the Ground of appeal No.1 raised by the assesse is dismissed.
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2025 (6) TMI 1448
Revision u/s 263 - CIT revising the assessment framed under section 147 - assessee has submitted that while exercising powers u/s 263 PCIT issued direction to the AO for framing the assessment on a issue other than issue/income, which the AO had found to have escaped assessment, which was duly explained by the assessee to his satisfaction.
HELD THAT:- As is available from a perusal of provisions of section 147, the essential requirement to exercise jurisdiction for initiating proceedings thereunder is that the AO should have “reason to believe” that “any income chargeable to tax has escaped assessment for any assessment year”.
Since, as per settled law, the AO cannot be said to have any jurisdiction as regards any other income which is alleged to have subsequently come to his notice, in the course of proceedings under section 147, and that too without resorting to the procedure prescribed under the Act, PCIT also cannot be said to have any jurisdiction to issue direction to the AO to make assessment afresh in respect of such other income.
As regards issue of income of Rs. 11 lacs - In view of the decisions cited by ld. AR for the assessee, it is held that once the AO verified and examined the issue of income of Rs. 11.00 lacs deposited by the assessee in the bank account with Axis Bank, after having issued notices to the assessee and seeking his response(s) and requisite information/documents, and ultimately accepted the returned income, ld. PCIT was not justified in observing that the Assessing Officer had not at all verified said transaction or conducted proper enquiry in respect thereof.
As regards the other transactions of Rs. 50.00 lacs - As regards said other transactions of Rs. 50.00 lacs, in respect of which, Ld. PCIT was of the view that the AO had not at all verified and made proper enquiries as to its source and genuineness, it is significant to note here that had the Assessing Officer, after reopening of the matter for reassessment, come across any other income, independently or of his own and issued notice under section 148 of the Act, then the things would have been otherwise.
But, herein, the Assessing Officer, after having reopened the matter only in respect of income of Rs. 11 lacs and having been satisfied by the assessee in respect thereof, did not come across any other income, what to say of issuance of any notice under section 148 of the Act for subjecting said other income to tax after following prescribed procedure.
Here, only Ld. PCIT is stated to have come across the other income and then issued directions to the Assessing Officer for framing of assessment afresh in respect of said other income. In other words, the issue pertaining to income or transaction of Rs. 50 lacs is not stated to have come to the notice of the Assessing Officer himself.
Thus, we find merit in this appeal, and consequently, hereby set aside the impugned order passed by PCIT. Assessee appeal allowed.
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2025 (6) TMI 1447
Charging of salary income earned by the assessee from an entity registered outside India - Income deemed to accrue or arise in India - residential status - period of stay in India - AO noted that assessee was a proprietor of M/s Saket Gems and also acted as Director in a foreign based company named M/s Saket Gems (H.K.) Ltd. situated in Honkong, China - HELD THAT:- Since the assessee was also directed to place on record the copy of Balance sheet and P&L account of M/s. Saket Gems Hong Kong and M/s. Saket Gems India, Appointment letter from employer, Ownership details of M/s. Saket Gems Hong Kong, Ledger copy of M/s. Saket Gems India in the books of M/s. Saket Gems Hong Kong and ledger of Saket Gems Hong Kong in books of M/s. Saket Gems India, Ledger copy of Sh. Saket Agrawal in the books of M/s. Saket Gems Hong Kong, but the assessee has placed on record copies of documents and that too without any certification as to which of said documents were forming part of the records before the CIT(A) and which were before the ld. AO, it is not possible for us to decide the fact that he earned the income of Salary outside India. This fact needs to be considered by Ld. CIT(A) after providing opportunity to the assessee of being heard.
Change of the residential status during the assessment proceeding, this aspect being the change in the factual aspect of the matter and the assessee having rectified the same on having realized the mistake even before the completion of the assessee, the lower authority should have considered said fact to be correct.
As relying on Babubhai Ramanbhai Patel [2017 (7) TMI 744 - GUJARAT HIGH COURT] assessee must place on record documents, as desired by ld. CIT(A) before him to enable him to decide the issue.
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2025 (6) TMI 1446
Revision u/s 263 - PCIT observed that as per Schedule 23 (Provisions on Loan and Advances) to the Profit and Loss account, an amount was debited by the assessee for Standard Assets Provisions which is not allowable as per provision of sections of section 36(1)(via) and while computing taxable income as per Income Tax Act, on account of “Syndication fees for CCPS issue (Convertible Cumulative preference shares), an amount was reduced by the assessee from the taxable income the same is not allowable as per provision of section 37(1) being an expenditure in the nature of capital in nature AND assessee debited expenses under the head rates and rates which is not allowable as per the provision of section 40(a)
HELD THAT:- AO has raised the issue and taken a plausible view or the ld. AR of the assessee placed on record relevant material so as to establish that on that issue the order is not erroneous and that of the matter has not been challenged by the ld. DR. Thus, when based on the submission and discussion so recorded herein above as is evident that on all of the aspect of the matter either the inquiry has been made or considering the submission of the assessee the same is not prejudicial to the interest of the revenue the order passed by the ld. AO cannot be held prejudicial to the interest of the revenue as the twin condition laid down under the Act fails as order of the ld. AO is neither erroneous on facts nor prejudicial to the interest of the revenue. Therefore, the order passed by the ld. PCIT cannot be sustained in law merely because the original assessment order does not exactly advert to the issue which the ld. PCIT is seeing.
Moreover, we note that the issue that has been discussed on which the ld. AO took a possible view in the matter and even though the ld. AR of the assessee demonstrated the same are not prejudicial to the interest of the revenue.
PCIT could not have exercised the powers conferred upon her u/s. 263 of the Act only on the reasons that she had a different view or perspective in the matter. The principle of law enunciated by the Supreme Court in Malabar Industrial Co. Ltd. has set up a standard concerning the width and amplitude of power vested for exercising revisionary jurisdiction under Section 263 of the Act. While exercising power under the said provision, the concerned officer must be satisfied that the twin conditions provided therein stand fulfilled, i.e., the order passed by the AO, which is sought to be revised, is erroneous and is also prejudicial to the interest of the revenue. In other words, if one of the two conditions is not satisfied, the revisionary power under the said provision cannot be invoked. One cannot quibble with the principle of law in the said case.
We are of the considered view that the Ld. PCIT was not justified in invoking the provision of section 263 to the present case of the assessee. Being so, we quash the order passed by ld. PCIT u/s 263.
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2025 (6) TMI 1417
Reopening of assessment - basic requirement of “failure to disclose” to issue re-opening notice - HELD THAT:- From the reasons quoted above, it is quite clear that there has been no failure to disclose. It is because the reason itself says “The assessee had claimed an expenditure towards bad debts written off in his profit & loss account However it is found that this amount had also been shown as provisions in Trial Balance Hence, the Bad Debt Written off Claim is not correct.” .Therefore, the basic requirement of “failure to disclose” to issue re-opening notice itself falls to the ground.
The very ground on which the notice dated 13.3.2020 under 148 of the said Act was issued to re-open the assessment was considered by the AO while originally passing the assessment order dated 24.2.2016. This itself demonstrates the fact that notice dated 13.3.2020 under Section 148 of the said Act seeking to re-open the assessment for the Assessment Year 2013-2014 is based on mere change of opinion.
Change of opinion does not constitute justification or reason to believe that income chargeable to tax has escaped assessment. Decided in favour of assessee.
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2025 (6) TMI 1416
Rejection of registration u/s. 12A(1)(ac) - as per AO assessee failed to offer any explanation or furnish requisite details in response to the discrepancies communicated, despite having been afforded adequate opportunities - HELD THAT:- Taking cognizance of the fact that the management of the assessee got changed and the trustee whose email id was given for receiving the notices also got retired without informing the assessee about the hearing notices and passing of the impugned order, we are of the considered view that, in the interest of justice and to ensure fairness to both parties, the assessee deserves one more opportunity to present its case.
Accordingly, the matter is remanded to the file of the ld. CIT(E) for denovo adjudication on merits. Assessee is directed to provide its updated email address and contact details to the Department to facilitate effective communication of notices through the ITBA portal. Appeal of the assessee is allowed for statistical purposes.
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2025 (6) TMI 1415
Stay recovery proceedings initiated u/s 156 - Seeking directions not to freeze the Bank Accounts, or to attach the assets, or to take any coercive action until the final disposal of the petitioner appeals u/s 246A - in spite of availing of statutory appeal, which is pending consideration, whether the petitioner will be entitled to the prayers made herein?
HELD THAT:- It is settled law that one cannot pursue two remedies in respect of the same matter, and as such, these two writ petitions were liable to be not entertained at the threshold itself. However, on consideration of the fact that specific prayers and submissions had been made, that the appeals that had been filed were yet to be taken up as the delay was yet to be condoned, and that the petitioner admittedly belonged to the Khasi Scheduled Tribe and as such, was exempted under Section 10(26) of the Income Tax Act, 1961, the interim orders had been passed that the respondents take no coercive action.
These matters being situated thus, and as the appeals are pending before the Appellate authority, without further discussion, these writ petitions are disposed of with the directions that the appeals be taken up by the CIT(Appeals) for consideration most expeditiously and orders passed thereon, or be finally disposed of within a period of 4(four) weeks from today. It is further provided that till such time the interim orders of this Court shall be in operation, and if no orders are forthcoming in the appeals within the period allowed, the respondents shall issue appropriate instructions to de-freeze the Bank Accounts of the petitioner.
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2025 (6) TMI 1414
Reopening of assessment - reasons to believe - additions made u/s 68 - bogus LTCG - Penny stock transactions - HELD THAT:- As per report it is found that promoters of penny stocks, the share brokers and entry operators are involved in this business of bogus LTCG by rigging the prices. Thus, it is evident that in the report of the Directorate of Income Tax (Investigation) the name of the respondent/assessee does not feature. Therefore, we are well justified in holding that the report is a general statement.
In the second paragraph of the reasons for reopening it is mentioned that the assessee found to have enjoyed bogus LTCG by transacting in penny stocks. The word ‘bogus’ which is found in reasons for reopening should have been used after independently considering the assessee’s return of income and other details.
This is required to be done because before issuing notice under section 148 of the Act, the assessing officer must have either reasons to believe by reason of omission or failure on the part of the assessee to make a return under section 139 for any assessment year to the Income Tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for any assessment order. This aspect of the matter is conspicuously absent in the reasons which were recorded for reopening the assessment. The second error committed by the assessing officer is disposing the objection raised by the assessee for the reopening of the assessment and by submitting a reply to the show cause notice dated 28.3.2016.
It is being a mandate under law as held in the case of GKN Driveshaft (India) Ltd. [2002 (11) TMI 7 - SUPREME COURT] goes to the route of the matter rendering the reopening of the assessment as bad in law.
After going through the computation of income as well as the objections raised by the assessee against initiation of proceedings under section 147 of the Act and observed that the assessee has not earned any long term capital gain during the year.
Further, there is no exemption claimed under section 10 (38) in the income tax return. Tribunal perused the profit and loss account, net income from sale of investment and found the same only to be Rs. 12,500/-. Further, with regard to short term capital loss which was Rs. 35,31,930/-, it was brought to the notice of the tribunal that during the year the assessee purchased 30,000 shares of JMD Telefilm for consideration of Rs. 35,36,867/- and the same was sold at Rs. 5,46,663/- incurring a loss of Rs. 29,90,203/-. Thus, on going through the profit and loss account the tribunal found that assessee has not shown any long term/short term capital gain/loss and purchases and sales of such shares are treated as stock in trade. Hence, the loss in such scrips were claimed as business loss and not capital loss.
Thus, we find that apart from the jurisdictional error which was pointed out by the learned Tribunal, the factual decision has also been discussed by the learned Tribunal. Thus, we find no ground to interfere with the impugned order. Decided against the revenue.
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2025 (6) TMI 1413
Validity of reassessment proceedings - notices issued u/s 148A and 148 challenged - as argued notices issued u/s 148A and the subsequent initiation of proceedings u/s 148 by the jurisdictional Assessing Officer which ought to have also been issued and proceeded in a faceless manner
HELD THAT:- This issue of proceedings being in violation of the Finance Act, 2021 i.e., the impugned notices u/s 148A and Section 148 of the Act not being issued in a faceless manner, have already been dealt with and decided by this Court in the case of KANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFICER [2023 (9) TMI 951 - TELANGANA HIGH COURT] whereby a batch of writ petitions were allowed and the proceedings initiated u/s 148A as also u/s 148 of the Act were held to be bad with consequential reliefs on the ground of it being in violation of the provisions of Section 151A of the Act read with Notification 18/2022 dated 29.03.2022. The said judgment passed by this Court has also been subsequently followed in a large number of writ petitions which were allowed on similar terms.
To a query being put to the learned counsel for the Revenue, they have categorically accepted the fact that there is no interim order granted by the Hon’ble Supreme Court in any of these matters pending before it. Meanwhile, fresh writ petitions of identical nature are being piled up before this Bench on daily basis and the pendency is getting increased on matter which otherwise has already been dealt and decided by this very High Court itself.
On the one hand, even though the order of this Court that was passed as early as on 14.09.2023 and more 16 months have lapsed, till date, we do not find any remedial steps having been taken by the Income Tax Department to take appropriate steps to either hold back issuance of notice u/s 148A and u/s 148 of the Act by the jurisdictional Assessing Officer, rather the authorities concerned in the teeth of series of decisions by all the major High Courts in India are continuously still initiating proceedings under Section 148A of the Act and also initiating proceedings u/s 148 of the Act in contravention to the amendments brought into the Income Tax Act pursuant to the Finance Act, 2020 as also the Finance Act 2021.
This Bench is of the considered opinion that unless and until we do not timely dispose of matters which are squarely covered by the decision of this Court and which stands fortified by the decisions of the various other High Courts on the very same issue, the pendency of this High Court would further be burdened which otherwise can be decided and disposed of as a covered matter.
We would only further like to make observations that since we are inclined to dispose of the instant writ petition, conscious of the fact that the earlier order of this High Court in the case of Kanakala Ravindra Reddy [2023 (9) TMI 951 - TELANGANA HIGH COURT] is subjected to challenge before the Hon’ble Supreme Court in [2024 (12) TMI 1586 - SC ORDER] preferred by the Income Tax Department, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLP preferred by the Revenue against the decision of this High Court in the case of Kanakala Ravindra Reddy (1 supra). This, in other words, would mean that either of the parties, if they so want, may move an appropriate petition seeking revival of this writ petition in the light of the decision of the Hon’ble Supreme Court in the pending SLP on the very same issue.
Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction is concerned. As a consequence, the impugned notice under challenge under Sections 148-A and 148 stands set aside/quashed.
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2025 (6) TMI 1412
Validity of reopening of assessment - notice issued u/s 148 and the approval issued u/s 151 - as argued notice issued u/s 148 has been issued by the office of the DCIT Circle-4 (3)(1), Mumbai who is a Jurisdictional Assessing Officer, and not by the Faceless Assessing Officer, as contemplated under the Scheme u/s 151A - HELD THAT:- This Court has specifically held that the notice to be issued under Section 148 would have to be as per the Scheme floated by the CBDT dated 29th March 2022 and would have to be by the Faceless Assessing Officer. This Court has specifically held that the Jurisdictional Assessing Officer would have no jurisdiction to issue the notice under Section 148. We not only agree with this view but are bound by it.
As pointed out to us that the decision in the Hexaware Technologies Ltd. [2024 (5) TMI 302 - BOMBAY HIGH COURT] is challenged before the Hon’ble Supreme Court and the same is pending. Rather than driving the Revenue to challenge even this order before the Hon’ble Supreme Court we are of the view that it would be more prudent if Rule is issued in the above Petition and interim relief is granted pending the hearing and final disposal of this Petition.
Revenue is directed to file their affidavit in reply to the above Writ Petition within a period of 4 weeks from today and serve a copy to the learned Advocate for the Petitioner.
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2025 (6) TMI 1411
Addition u/s 68 - unexplained cash credit - loans or advances as received by assessee - onus to prove - CIT(A) concluded that the three essential limbs for accepting a cash credit u/s 68 namely, identity of the creditor, creditworthiness, and genuineness of the transaction had not been satisfied in most cases - assessee argued advances received were bona fide and from genuine parties
HELD THAT:- While the assessee has submitted a list of creditors or donors, it failed to furnish key documentary evidence such as bank statements, income tax returns of the creditors, or confirmation letters. More importantly, discrepancies were found between the initial list of depositors filed earlier and the revised list submitted later. This seriously undermines the credibility of the assessee’s claim.
The lower authorities have categorically observed that in the absence of such corroborative evidence, the genuineness of the transactions is questionable. We find that the AO as well as the CIT(A) have given detailed findings, which remain unrebutted by the assessee with credible documentation. Therefore, we find no infirmity in the order of the CIT(A) confirming the addition under Section 68. Decided against assessee.
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2025 (6) TMI 1410
Validity of order passed by the Settlement Commission u/s 245D(4) of the Income Tax Act, 1961 and also Section 22D(4) of the Wealth Tax Act - HELD THAT:- As is evident from Section 245 of the Act, the Central Government has appointed the members of Income Tax Settlement Commission (ITSC) as their representatives to settle the disputes with assessee, and it reflects the confidence they had in the members because the persons appointed are of integrity and known for their outstanding ability and expertise and for the special knowledge and experience in problems relating to taxes and business accounts. These members, therefore, have been authorised to settle the disputes on behalf of the Government and it would not lie in the mouth of the Government to challenge the decision taken by their own representatives without making allegations of bias or fraud or malice.
If the ITSC has passed the order, the members, for the reasons mentioned in the provision, knew what exactly they were doing. Admittedly, there is also no allegation of bias or fraud or malice.
It is not the function of the Court to pronounce a ‘new rule’ but to maintain and expound the ‘old one’. Judges do not make law, they only discover or find the correct law. The law has always been the same. If a subsequent decision alters the earlier one, it (the later decision) does not make new law. It only discovers the correct principle of law which has to be applied retrospectively. Even where an earlier decision of a Court operated for quite some time, the decision rendered later on would have retrospective effect, clarifying the legal position which was earlier not correctly understood.
Appeal allowed.
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2025 (6) TMI 1409
Validity of final assessment orders passed u/s 147 r/w Section 144 - As argued subsequent communication intimating the DIN for DRP proceedings did not satisfy the conditions prescribed in paragraph No.3 of the circular; and that therefore, those orders are invalid in law and as a sequitur, the assessment orders which were impugned before ITAT are liable to be quashed - HELD THAT:- DIN in fact was generated for DRP proceedings, written by hand and subsequently communicated on 21.12.2022 and therefore, the conditions prescribed in paragraph No.3 of the circular have been complied with. Admittedly, the reason for writing the DIN number by hand and the reason for not generating the DIN electronically have not been specified in the format prescribed in paragraph No.3 of the circular.
Even prior written approval of the Chief Commissioner/Director General of Income-Tax, as prescribed in Clause (3) of the Circular, was not brought to our notice. If such prior permission has not been taken, that will also be another ground to make the communication to be treated as invalid and having never been issued.
Therefore, the communication or the proceedings of the DRP, is not in conformity with paragraph Nos.2 and 3 of the circular and are invalid and deemed to have never been issued. Consequently, the assessment orders under Section 144C(13) of the Act, which are passed on those directions of DRP, cannot be sustainable. Therefore, the findings of ITAT are in accordance with law and no interference is called for. The substantial questions of law are answered accordingly.
It is alleged that ITAT chose to hold that the orders are invalid, which had led to huge revenue loss to the department. It is, however, the responsibility of the Assessing Officer to ensure that he strictly complies with the Circulars issued by his Department and instead of blaming the ITAT, he should personally take the responsibility of causing revenue loss to the department.
We note another disturbing feature in these cases. According to the communication dated 21.12.2022, the DIN for the directions under Section 144C (5) of the Act, ends with the following number 1048133274(1), whereas, the DIN quoted in the DRP is the number ending with 1048143460(1). In fact, the latter number is the DIN generated in the communication dated 21.12.2022. It is not known as to how a DIN generated on 21.12.2022, could find a place in the proceedings of DRP dated 19.12.2022. Learned counsel for appellant was unable to give any satisfactory explanation. Therefore, we are of the view that the DIN has been interpolated subsequently in the proceedings of the DRP and would not have been generated in real time as claimed by appellant. The false claim by appellant, therefore, has to be viewed seriously.
We are of the view that the appellant would be liable to pay costs of Rs. 1,00,000/- [Rupees One Lakh only]. Hence, we direct appellant to pay a sum of Rs. 1,00,000/-[Rupees One Lakh only] to PM CARES Fund and this amount shall be paid within two weeks from the date of uploading this order.
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