Income Tax Appellate Tribunal judgments

ITAT Delhi condoned a 614-day delay in filing an income tax appeal, ruling that the sudden death of the assessee and lack of communication from the authorized representative constituted sufficient cause. The tribunal directed the CIT(A) to decide the appeal on merits after hearing the legal heirs, reinforcing the liberal approach to condonation under natural justice principles.

ITAT Delhi rules that cash received at the time of property registration does not violate Section 269SS if it falls under Explanation (iv) of the Income Tax Act. The tribunal deleted the penalty under Section 271D, emphasizing the exception for transactions during property sales, offering relief to taxpayers facing similar penalties.

ITAT Delhi rules that delayed filing of Form 10CCB under Section 80IAC does not invalidate tax deductions if submitted before assessment finalisation, reinforcing the principle of substantial compliance over procedural technicalities. This precedent protects startups and eligible businesses from losing tax benefits due to minor filing delays.

ITAT Delhi rules that belated filing of Form 67 does not extinguish the substantive right to claim Foreign Tax Credit under DTAA, reinforcing that procedural defects cannot override treaty-based entitlements. The decision applies Delhi HC precedent, ensuring taxpayers retain FTC claims despite administrative delays.

ITAT Delhi rules that reassessment notices under Section 148 of the Income Tax Act for Assessment Year 2015-16 issued after 01.04.2021 are time-barred, affirming the Supreme Court's judgment in Union of India v. Ashish Agarwal. The decision reinforces that the Taxation and Other Laws (Amendment) Act, 2020 (TOLA) does not extend the limitation period for reassessment under the old regime, impacting pending tax reassessment proceedings.

ITAT Ahmedabad rules that for unsecured loans under Section 68, establishing the lender’s identity, creditworthiness via bank statements/ITR, and repayment through banking channels is adequate to avoid additions-even without tracing the origin of funds. This simplifies compliance for taxpayers and narrows the scope of scrutiny for revenue authorities.

ITAT Mumbai rules that consultancy receipts cannot be treated as unexplained income under Section 69 without evidence of illegality. Only expenses proven unverifiable-not the entire amount-are disallowed, protecting taxpayers from arbitrary additions.

ITAT Pune prioritized substantive justice by condoning a 971-day delay in filing an appeal by a legal heir, remitting the case to CIT(A) for merits adjudication. The ruling underscores that procedural delays caused by the assessee's death should not bar access to appellate remedies under Section 154 of the Income Tax Act.

ITAT Ahmedabad quashes reassessment proceedings for AY 2017-18, ruling that escaped income below Rs. 50 lakhs does not trigger jurisdiction under Section 149(1)(b) of the Income Tax Act. The decision reinforces the statutory threshold as a non-negotiable precondition for reassessment beyond three years, impacting tax authorities' powers to reopen closed assessments.

ITAT Mumbai rules that additions under Section 68 of the Income Tax Act cannot rely solely on bank-routed transactions or third-party allegations. The assessee must independently establish the creditworthiness of lenders and the genuineness of transactions to avoid additions, reinforcing the burden of proof on taxpayers in accommodation entry cases.

ITAT Mumbai rules that where sales are accepted, disallowance of bogus purchases under Section 69C is restricted to the profit element (12.5%) rather than the entire purchase amount. This narrows tax liability for taxpayers facing allegations of accommodation entries, providing clarity on the treatment of unexplained expenditure.

ITAT Mumbai rules that a delay in filing Form 10-IC under Section 115BAA does not bar a taxpayer from claiming concessional tax benefits, provided the intent to opt for the regime and compliance with statutory conditions are established. This decision underscores substance over procedural formalities, offering relief to taxpayers facing similar technical lapses.

ITAT Bangalore grants partial stay on a ₹1.83 crore transfer pricing demand but mandates a 20% deposit under Section 254(2A) of the Income Tax Act. The ruling sets a precedent for conditional relief in tax appeals, balancing assessee hardship with revenue interests.

ITAT Mumbai ruled that dismissing an income tax appeal for incomplete Form 35 without allowing the assessee an opportunity to cure the defect violates principles of natural justice. The Tribunal emphasized that substantive justice should prevail over procedural technicalities when the assessee demonstrates good faith, setting a precedent for faceless appeals under the Income Tax Act.

ITAT Mumbai rules that interest paid on loans for land acquisition by real estate developers qualifies as a business expense under Section 36(1)(iii) of the IT Act, as land held for development constitutes inventory, not a capital asset. This decision clarifies the tax treatment of financing costs for developers and may impact similar pending assessments.

ITAT Mumbai sets aside a ₹6.17 lakh penalty under Section 271(1)(c) of the Income Tax Act, ruling that inadvertent computational errors-even if leading to underreported income-do not constitute furnishing 'inaccurate particulars' absent fraudulent intent. The decision reinforces that penalties under the provision require proof of deliberate concealment, offering relief to taxpayers and tax professionals.

ITAT Ahmedabad rules that penalties under Section 271(1)(c) cannot be imposed if the assessee discloses foreign receipts and takes a bona fide legal position that they are capital in nature. The tribunal emphasized that debatable tax positions do not attract penalties, reinforcing protection for taxpayers acting in good faith.

ITAT Ahmedabad rules that Section 94(7) of the Income Tax Act disallows capital losses against the entire dividend received, not just the tax-exempt portion. This decision curtails dividend stripping strategies by ensuring losses are disallowed proportionate to total dividends, impacting taxpayers engaging in such transactions.

ITAT Pune condoned a 32-day delay in filing an appeal after the assessment order landed in the assessee's spam folder, reinforcing that procedural fairness must yield to substantial justice. The ruling sets a precedent for condonation of delay where technical glitches prevent actual notice, impacting taxpayers and revenue authorities alike.

ITAT Ahmedabad ruled that denying a taxpayer's request for a video hearing in faceless appeal proceedings violates principles of natural justice, setting aside the reassessment order. The decision reinforces that procedural fairness under Section 250 of the Income Tax Act requires adjudicating authorities to consider alternative hearing formats, impacting all faceless assessment appeals.

ITAT Mumbai rules that additions under Section 153C of the Income Tax Act cannot be sustained solely on third-party statements or seized electronic data unless corroborated and the assessee is given an opportunity for cross-examination. The judgment reinforces principles of natural justice in tax assessments, impacting taxpayers facing similar proceedings.

ITAT Dehradun rules that taxpayers who voluntarily disclose additional income via an updated return and pay due taxes before issuance of a show-cause notice (SCN) cannot be penalized under Section 270A of the Income Tax Act. The ruling underscores that acceptance of the updated return by the Assessing Officer negates any allegation of under-reporting or misreporting, protecting taxpayers from punitive penalties.

ITAT Ahmedabad rules that trade payables cannot be added as unexplained income under Section 68 of the IT Act without independent verification of creditor genuineness, including cross-examination rights. The ruling reinforces natural justice principles, mandating AO scrutiny of documentary evidence before invoking tax liability on trade creditors.

ITAT Rajkot rules that reassessment notices under Section 148 of the IT Act are invalid if the escaped income falls below the ₹50 lakh threshold mandated by Section 149(1)(b). The tribunal also held that notices issued beyond the surviving limitation period under TOLA are time-barred, reinforcing procedural compliance as a jurisdictional prerequisite. This ruling impacts taxpayers facing reassessment for AY 2016-17 and beyond, setting a precedent for threshold-based jurisdictional challenges.