Tribunals and Commissions judgments

ITAT Bangalore rules that charitable trusts remain entitled to Section 11 deductions despite delayed filing of Form 10B audit reports, provided the delay is bona fide. The tribunal directed the Assessing Officer to compute net income after allowing admissible expenditure, reinforcing that procedural lapses alone cannot deny substantive tax benefits to trusts.

ITAT Delhi sets a critical precedent: unexplained expenditure under Section 69C cannot be added solely based on seized documents if the assessee proves transactions through banking channels. The ruling mandates direct evidence linking cash payments to unexplained income, offering relief to taxpayers facing arbitrary additions during search and seizure assessments.

ITAT Delhi rules that statutory development authorities like Aligarh Development Authority qualify as charitable entities under Section 2(15) of the Income Tax Act. Funds earmarked for infrastructure development under state directives are not taxable income if utilized for statutory public purposes, reinforcing the principle of diversion of income by overriding control.

CAT Allahabad rules that recovery of excess MACP benefits from a Group C employee without establishing fraud, issuing a show-cause notice, or providing a hearing violates natural justice. The tribunal relies on the Supreme Court’s Rafiq Masih precedent, reinforcing that overpayments cannot be reclaimed mechanically, safeguarding retired employees from arbitrary financial setbacks.

Central Administrative Tribunal rules that denial of benefits to similarly placed employees after granting them to one group violates Article 14, unless laches or acquiescence is proven. The judgment directs CPWD to extend 'highly skilled' category benefits to petitioners from the date of passing their trade test, ensuring pay and arrears parity.

CAT Jammu rules that denial of police appointment based solely on FIR registration violates natural justice, mandating consideration of exoneration via supplementary charge-sheet. The judgment reinforces that substantive evidence, not mere allegations, must guide employment decisions in government recruitments.

ITAT Jodhpur rules that cash deposits during demonetization under Section 69A of the Income Tax Act demand rigorous documentary proof of source. The Tribunal remanded the case for fresh assessment, emphasizing procedural compliance and the assessee’s burden to substantiate transactions with valid evidence, impacting tax litigation and banking law.

ITAT Delhi holds that reassessment proceedings under Section 147/148 of the Income Tax Act are vitiated if the approval under Section 151 is granted mechanically without independent application of mind. The ruling mandates that authorities must record reasoned approval, impacting all pending and future reassessment cases.

CAT remanded a KVS transfer order, ruling that serious medical conditions like Crohn’s disease and TB must be empathetically considered even if not explicitly listed in the policy. The tribunal emphasized administrative justice requires weighing individual hardships beyond rigid policy exclusions, impacting service law and employment rights.

CAT Bangalore holds that 20 years of irregular but not illegal ad-hoc service must be counted for pensionary benefits, affirming pension as a constitutional right under Article 21. The ruling mandates pay protection and MACP benefits for employees appointed without UPSC compliance but through due process.

NCLAT clarifies that a power of attorney holder can file an insolvency application under Section 95 IBC if authorised by a board resolution, even without explicit mention in the power of attorney. The ruling underscores the sufficiency of corporate authorisation for initiating personal insolvency proceedings against guarantors.

NCLAT affirms that a tribunal-approved scheme of arrangement under the Companies Act binds dissenting creditors, even if it mandates withdrawal of pending civil suits and assigns claims to a third party. The ruling reinforces the legal sanctity of court-sanctioned compromises over individual creditor objections, impacting creditor rights in corporate debt restructuring.

NCLAT clarifies that merely mortgaging property to secure a loan does not qualify as 'financial debt' under the IBC unless funds are disbursed to the corporate debtor. Creditors relying on mortgage security alone must now assert claims as 'other creditors,' impacting insolvency priority and recovery rights.

ITAT Mumbai ruled that donations to political parties under Section 80-GGC are ineligible for tax deductions if linked to circuitous cash-return schemes, reinforcing strict scrutiny of political funding legitimacy. The decision impacts taxpayers claiming deductions for donations where the recipient party is involved in fraudulent financial practices.

ITAT Mumbai overturns Rs.6.75 crore disallowance, ruling that professional fees paid to facilitate payments to OFAC-sanctioned entities qualify as deductible business expenditure under Section 37(1) IT Act. The tribunal emphasizes that commercial expediency, not revenue assumptions, determines allowability of such expenses.

Central Administrative Tribunal rules that IGNOU B.Tech degrees obtained before 2010 qualify government engineers for promotion to Executive Engineer, rejecting arbitrary disqualification based on distance education. The judgment reinforces equal protection in employment advancement and sets a precedent for recognizing UGC-recognized distance degrees in service law.

CAT Ernakulam rules that employees unilaterally transferred under FR 15(a) retain entitlement to ACP/MACP financial upgradation based on cumulative service, including pre-transfer tenure. The judgment protects government employees from benefit erosion due to administrative transfers, reinforcing continuity in career progression under service law.

ITAT Mumbai rules that additions under Section 69 of the Income-tax Act for unexplained investments require substantive evidence beyond third-party statements or Excel data from search proceedings. The assessee must be afforded an opportunity for cross-examination to uphold natural justice principles, invalidating additions made without such corroboration.

CAT Lucknow rules that tribunals, including the Central Administrative Tribunal, cannot condone delay under Section 5 of the Limitation Act unless expressly empowered by statute or rules. The decision clarifies that the tribunal's procedural flexibility under Section 22 of the Administrative Tribunals Act does not extend to delay condonation, impacting review applicants across administrative law proceedings.

ITAT Bangalore set aside a penalty under Section 270A of the Income Tax Act, ruling that a show-cause notice must explicitly specify the limb of misreporting to sustain the penalty. The tribunal held that bonafide reliance on Form 16 constitutes valid disclosure under Section 270A(6)(a), protecting assessees from arbitrary penalties.

ITAT Mumbai rules that Form 3CL issued by DSIR and already part of the Assessing Officer’s record cannot be dismissed as additional evidence in rectification proceedings under Section 154. The ruling mandates consideration of pre-existing documents for income tax deductions, impacting taxpayers relying on DSIR approvals.

ITAT Lucknow rules that disallowance of cash payments under Section 40A(3) of the Income Tax Act is unsustainable without examining Rule 6DD exemptions. The tribunal mandates a fresh assessment, ensuring taxpayers can prove the legitimacy of cash transactions, reinforcing natural justice in tax proceedings.

ITAT Bangalore rules that cash deposits from demonetization-era sales, backed by audited books and VAT returns, cannot be taxed as unexplained income under Section 68, even if payments were made in Specified Bank Notes (SBNs). The ruling clarifies that RBI guidelines on SBNs do not override statutory provisions of the Income Tax Act, reinforcing the primacy of documented business receipts over procedural currency norms.

CAT Cuttack sets aside a recovery order imposed without inquiry, ruling that even under Rule 16 of CCS (CCA) Rules, an employee’s factual denial triggers the right to a formal inquiry as a minimum natural justice requirement. The tribunal held that denying access to relevant documents prejudiced the employee’s defense, rendering the penalty procedurally void.