Income Tax Appellate Tribunal judgments

The Delhi ITAT ruled that a charitable trust’s failure to register its deed does not invalidate its claim to Section 12A tax exemption. This clarifies that registration is not a statutory prerequisite, benefiting existing and prospective charitable trusts seeking exemption.

ITAT Delhi upholds deduction for warranty provisions as accrued liability under Section 37(1) and full R&D expenditure under Section 35(2AB), citing Rotork Controls precedent. Ruling benefits corporates claiming contingent liabilities and innovation expenses.

ITAT Amritsar upheld the rejection of books of accounts in the liquor trade but set aside arbitrary profit additions, modifying the net profit estimation to 0.55% on net sales. The ruling emphasizes the need for stronger grounds to reject audited accounts in regulated sectors like liquor distribution.

ITAT Pune quashes reassessment notice u/s 148 for AY 2015-16 after harmonious construction of Section 149(1) provisos. The ruling underscores strict compliance with limitation periods in reassessment proceedings, impacting taxpayers facing similar notices.

ITAT Delhi quashes reassessment for AY 2012-13 after finding the prescribed authority’s Section 151 approval lacked independent application of mind. Ruling reaffirms that mechanical approvals violate judicial discipline and render reopening proceedings invalid under CIT vs. S. Goyanka Lime and Chemical Pvt. Ltd. (2015).

Ahmedabad ITAT permits deduction of interest on borrowings acquired via slump sale under Section 36(1)(iii), rejecting Revenue's colourable device and res judicata challenges. Ruling clarifies allowability where assets are put to use, benefiting corporate taxpayers in asset acquisitions.

ITAT Jaipur rules that penalties in search cases must be levied under Section 271AAB of the Income Tax Act, 1961, not Section 271(1)(c). The ruling clarifies the correct penalty framework for undisclosed income detected during search assessments, impacting taxpayers facing similar proceedings.

ITAT Delhi sets aside ex-parte dismissal by CIT(A) for non-prosecution, holding Section 250(6) mandates reasoned orders on merits. Remand directs fresh adjudication, reinforcing statutory compliance and natural justice in tax appeals.

ITAT Jaipur set aside an unexplained money addition of Rs.10,90,100 u/s 69A after finding assessee's cash withdrawals sufficient to cover credit card payments. The ruling clarifies that correlated withdrawals can rebut Section 69A additions, impacting taxpayers facing similar assessments.

ITAT Bangalore allows ₹1.47 crore success fee paid to Singhi Advisors as deductible under Section 48(i) ITA, holding it was incurred wholly and exclusively for facilitating share transfer. The ruling clarifies capital gains computation for individual taxpayers engaged in share transactions.

ITAT Jaipur quashed an assessment under Section 153C of the Income Tax Act, 1961, after finding the Assessing Officer failed to apply mind while recording satisfaction. The ruling underscores strict compliance with statutory prerequisites for invoking Section 153C, impacting pending and future assessments based on similar jurisdictional flaws.

ITAT Jaipur quashes Section 153C assessment for AY 2014-15, ruling seized agreement dated 2012 irrelevant as it pertained to a prior year. The ruling clarifies jurisdictional limits on incriminating material under Section 153C, impacting future assessments based on third-party searches.

The ITAT Jaipur bench quashed penalty under Section 271(1)(c) after the assessee settled quantum dispute under the Direct Tax Vivad Se Vishwas Scheme 2020, holding that Section 5 grants immunity from penalty post-scheme settlement. This ruling clarifies that penalty proceedings cannot survive once a dispute is resolved under the DTVSV Act.

Supreme Court set aside a Rajasthan High Court order quashing a Section 148 reassessment notice, restoring the Income Tax Appellate Tribunal Jaipur’s jurisdiction to re-examine the case under the Faceless Assessment Scheme. The ruling clarifies that appellate jurisdiction under the Act remains distinct from writ jurisdiction, impacting reassessment proceedings pending before ITAT.

ITAT Delhi rules that disallowance under Section 14A read with Rule 8D cannot be factored into book profit computation for MAT under Section 115JB. The ruling clarifies that such disallowances remain excluded from MAT calculations, impacting corporate tax assessments.

Kolkata ITAT quashed reassessment notices under Section 148A for failing to provide the mandatory 7-day compliance period and unsigned notices, reinforcing strict procedural safeguards in tax reassessment. The ruling underscores the importance of adherence to statutory timelines for notices issued under the Income Tax Act, impacting future reassessment proceedings.

Kolkata ITAT rules the 10% tolerance band under Section 43CA applies to past transfers, granting relief where sale consideration is within 10% of stamp duty valuation. The ruling impacts real estate transactions assessed under the Income Tax Act, offering retrospective clarity for taxpayers facing valuation disputes.

ITAT Delhi bench ruled that orders giving effect to ITAT decisions are appealable under Section 246A, and CIT(A) can adjudicate interest u/s 244A adjustments. Clarifies refund computation mechanics and jurisdictional limits for tax appeals.

ITAT Surat bench rules BSNL VRS 2019 compensation as exempt under Section 10(10B) of the Income-tax Act, 1961, treating it as retrenchment compensation. The ruling allows appeals and directs refund of TDS deducted on such payments.

ITAT Kolkata set aside ₹13.5 lakh addition under Section 68 for unexplained share capital after the assessee furnished investor details, PANs, and source of funds. The ruling clarifies the evidentiary burden required to rebut Section 68 presumptions in share premium cases.

ITAT Surat quashed a reassessment notice u/s 148 issued after 01.04.2021 for AY 2015-16, relying on Rajeev Bansal (SC) and Deepak Steel (SC). The ruling clarifies procedural validity of reassessment notices under amended Section 147-149 post-TOLA amendments.

ITAT Delhi rules sale of milk by a gaushala trust is incidental to its charitable purpose under Section 2(15) proviso, affirming Section 12A registration. The ruling clarifies that receipts from milk sales do not disqualify trusts from tax exemptions if aligned with primary charitable objectives.

ITAT Kolkata rules that repayment of loans in subsequent years discharges the assessee's burden under Section 68 of the Income Tax Act, setting aside an unexplained cash credit addition of ₹1.4 crore. The ruling clarifies that delayed repayments do not automatically trigger Section 68 additions, providing relief to taxpayers facing shell company allegations.

ITAT Agra quashed unexplained bank deposits addition of Rs. 35,92,020 for CIT(A)'s failure to provide a reasoned order and violate natural justice under Section 250(6). The ruling underscores mandatory procedural compliance in appellate assessments, impacting pending unexplained income cases.