Income Tax Appellate Tribunal judgments

ITAT Dehradun reinforces that once a coordinate bench quashes a revisionary order under Section 263 of the Income Tax Act, the same order cannot be revived or re-exercised by the CIT(A). The ruling underscores judicial finality, preventing repetitive revisionary actions on identical grounds and protecting assessees from procedural harassment.

ITAT Ahmedabad rules that CSR donations, even if mandatory under the Companies Act, qualify for deduction under Section 80G if the donee institution is approved. The tribunal rejects the tax department's argument that such expenditures, being obligatory, cannot be treated as voluntary donations for tax benefits. This clarifies that compliance with statutory CSR obligations does not preclude eligibility for Chapter VI-A deductions.

ITAT Ahmedabad ruled that an assessee's non-participation in assessment proceedings does not forfeit the right to a fresh hearing, upholding natural justice principles. However, the Tribunal imposed costs for the assessee's procedural lapse, balancing fairness with accountability. The decision reinforces that ex-parte assessments under Section 144 IT Act can be set aside if the assessee's default was not willful or contumacious.

ITAT Dehradun rules that revisionary powers under Section 263 of the Income Tax Act cannot be invoked merely to substitute the Assessing Officer's opinion unless a material error is established. The Tribunal quashed the PCIT's order, emphasizing that the AO's acceptance of loan details after due inquiry cannot be overturned without evidence of prejudice to revenue or procedural lapse.

ITAT Ahmedabad ruled that natural justice mandates restoring an appeal dismissed due to procedural negligence, provided the appellant pays costs. The decision reinforces that tax appeals cannot be dismissed ex-parte without affording a hearing, even in cases of oversight, balancing fairness with accountability for delays.

ITAT Dehradun quashed a penalty under Section 270A of the Income Tax Act, ruling that a show-cause notice must explicitly specify the charge of under-reporting or misreporting. The Tribunal held that levying a penalty on a different charge than the one initiated violates principles of natural justice, setting a precedent for strict procedural compliance in tax proceedings.

ITAT Ahmedabad rules that a mere agreement to purchase a residential property does not satisfy Section 54 exemption requirements; a registered conveyance deed is mandatory to claim capital gains tax relief. The ruling clarifies that taxpayers must ensure legal title transfer to avoid disallowance of exemptions, impacting property sellers relying on unregistered agreements.

ITAT Hyderabad rules that Section 12AB(4) of the Income Tax Act cannot be applied retrospectively to cancel charitable registration for prior assessment years. The tribunal emphasized judicial discipline, holding that lower authorities must follow higher judicial decisions even if they disagree, and cannot revisit settled issues without explicit legislative intent.

ITAT Ahmedabad ruled that an appellate order is void if it fails to address the assessee's grounds of appeal or written submissions, violating principles of natural justice. The tribunal emphasized that procedural compliance, including proper approval hierarchy under Section 151 of the IT Act, is mandatory for reassessment notices, setting aside the order for non-compliance.

The ITAT Delhi has ruled that tax authorities cannot disallow business purchases under Section 37 of the Income Tax Act merely because e-way bills were not produced, if the assessee has provided credible documentary evidence including invoices, bank records, and supplier confirmations. This sets a critical precedent for taxpayers in the manufacturing and trading sectors, reinforcing that substantive proof of transaction legitimacy outweighs procedural compliance gaps under GST.

The ITAT Ahmedabad has struck down the arbitrary 20% disallowance of truck rent expenses, ruling that tax authorities cannot impose such adjustments without conducting a proper comparative analysis or invoking Section 133(6) to verify genuineness. This sets a critical precedent for transport businesses and SMEs facing mechanical tax adjustments, reinforcing that procedural fairness is non-negotiable even in scrutiny assessments.

ITAT Delhi rules that cash deposits during demonetization, backed by audited books of accounts and documented sales, cannot be treated as unexplained income under Section 68. The ruling reinforces that tax authorities must consider corroborative evidence before making additions, protecting businesses with compliant record-keeping.

The ITAT Delhi has ruled that alleged financial mismanagement under Section 13 of the Income Tax Act cannot be grounds for cancelling a charitable trust’s registration under Section 12AB. Only material deviation from the trust’s stated objects or lack of genuineness in its activities can trigger cancellation, reinforcing that procedural compliance alone does not override substantive purpose in charitable exemptions.

ITAT Delhi rules that reassessment proceedings under Section 148 of the Income Tax Act are invalid if the jurisdictional notice is merely uploaded on the e-filing portal without proof of actual service. The decision underscores that procedural compliance requires tangible delivery, not just digital record-keeping, affecting all pending and future reassessment cases.

ITAT Ahmedabad rules that an ex parte assessment under Section 69A of the IT Act cannot bar reassessment if the taxpayer provides credible evidence on appeal. The tribunal mandated a fresh hearing, reinforcing natural justice principles in tax proceedings and setting a precedent for taxpayers contesting unexplained income additions.

ITAT Delhi rules that notional interest recognized under IND AS cannot be taxed as income under Section 56 of the Income Tax Act. The tribunal also mandates acceptance of documentary evidence reconciling GST and P&L discrepancies if verified by the Assessing Officer, reinforcing the primacy of accounting standards over tax disputes.

ITAT Delhi rules that reassessment under Section 147 IT Act cannot be initiated based on suspicion or fund rotation alone. The assessing officer must establish tangible material showing a direct nexus between the evidence and the belief of income escapement, setting a higher threshold for reopening assessments.

ITAT Delhi rules that startups remain eligible for Section 80IAC tax deductions even if Form 10CCB is filed late, provided the original return is submitted on time and the claim is substantiated. The ruling emphasizes substantive compliance over procedural technicalities, offering relief to startups facing disallowance due to filing delays.

ITAT Delhi ruled that where a High Court has already upheld the assessee’s transfer pricing methodology for royalty and business support service fees in a prior year, the revenue cannot re-agitate the same factual matrix. The Tribunal granted an absolute stay on recovery, reinforcing judicial consistency in transfer pricing disputes and protecting taxpayers from arbitrary reassessments.

ITAT Ahmedabad rules that reopening assessments under Section 147 of the IT Act solely based on investigation wing inputs, without independent application of mind or affording the assessee an opportunity to respond, violates principles of natural justice. The Tribunal quashed the reassessment, emphasizing that procedural fairness mandates reasoned justification beyond mere reliance on third-party information.

ITAT Delhi rules that net profit calculations in search assessments under Section 143(3) must rely on actual figures from seized documents, rejecting uniform gross profit estimates. The decision reinforces that expense deductions require concrete evidence, not presumptive additions, impacting undisclosed income assessments for businesses.

ITAT Delhi rules that assessees can claim the 22% concessional tax rate under Section 115BAA even if Form 10-IC is filed late, provided substantial compliance and intent are proven. The decision underscores a beneficial interpretation, protecting taxpayers from technical disqualifications due to procedural lapses.

ITAT Delhi rules that for non-searched persons, the six-year assessment window under Section 153C commences from the date the Assessing Officer receives seized documents, not the search date. This holding invalidates assessments conducted under Section 143(3) for such cases, setting a critical precedent for jurisdictional compliance in search-related proceedings.

ITAT Mumbai rules that inadvertent computational errors in depreciation claims can be rectified during assessment proceedings under Section 32 of the Income Tax Act, even if no revised return was filed. The decision underscores the appellate authority's jurisdiction to entertain such corrections, providing relief to taxpayers facing similar procedural hurdles.