Tribunals and Commissions judgments

ITAT Ranchi slashed the presumptive profit rate from 8% to 3% for an unaccounted electronic goods business, ruling that tax authorities cannot impose arbitrary additions without rejecting books or proving higher margins. The decision reinforces that presumptive taxation under Section 44AD must align with actual business performance, protecting small traders from speculative assessments.

NGT Pune rules that detailed disclosure of vegetation, including tree count, transplantation, and conservation measures in the Environment Clearance (EC) Form, defeats claims of misrepresentation. The judgment reinforces that compliance with procedural transparency in EC applications shields project proponents from allegations of suppressed data.

NCLAT reaffirms that Employees Provident Fund Organisation (EPFO) cannot press claims for damages and interest under Sections 7A, 14B, and 7Q of the EPF Act during the corporate insolvency resolution process. The ruling clarifies that moratorium under Section 14 of the IBC bars assessment proceedings, impacting creditor hierarchy and recovery priorities for statutory dues.

ITAT Agra condoned delays of 342 and 513 days in filing income tax appeals, ruling that lack of digital access constitutes 'sufficient cause' under Section 249(3). The decision reinforces that substantial justice prevails over procedural defaults, particularly for assessees unable to receive electronic notices due to technological constraints.

NGT rules that deemed environmental clearance under the EIA Notification 2006 is invalid if procedural requirements, including tree felling permissions, are not strictly followed. The ruling sets a precedent that illegal construction or tree felling nullifies any claim to deemed clearance, impacting real estate developers and environmental regulators.

ITAT Mumbai rules that share premium received before Section 56(2)(viib) came into force (01/04/2013) cannot be taxed, even if shares are allotted later. The tribunal invalidates additions under Section 68 for lack of notice and procedural compliance, reinforcing that tax provisions cannot apply retrospectively to past transactions.

NGT rules that construction on the Ganga floodplain without NMCG approval violates the River Ganga Rejuvenation Order, 2016, and imposes environmental compensation. The judgment mandates joint inspections and underscores the statutory duty of authorities to prevent unauthorized development in protected zones, affecting infrastructure projects and environmental compliance nationwide.

ITAT Ahmedabad reaffirms that goodwill arising from amalgamations prior to the 2021 Finance Act amendment qualifies for depreciation under Section 32(1) of the Income Tax Act. The ruling reinforces the Smifs Securities precedent, impacting tax treatment for corporate mergers and intangible asset valuation.

ITAT Delhi rules that export incentives under the Focus Product Scheme qualify as capital receipts, exempt from income tax. The decision reinforces the precedent that subsidies tied to capital assets or business expansion are non-taxable, offering relief to exporters facing tax additions on such benefits.

ITAT Delhi rules that R&D expenditure rejected under Section 35(2AB) for lack of certification can still be claimed as a business expense under Section 37(1) if its genuineness is established. This holding preserves tax relief for businesses incurring legitimate R&D costs even when formal compliance fails.

ITAT Delhi rules that interest expenses are deductible under Section 57(iii) if a direct nexus with interest income is established, distinguishing prior precedents. The ruling clarifies that pre-operative interest expenses linked to borrowed funds generating taxable income qualify for deduction, impacting real estate and capital-intensive businesses.

The Central Administrative Tribunal ruled that retired employees undergoing emergency medical treatment are entitled to full CGHS reimbursement, even if intimation is delayed, provided the treatment and expenses are verified. The ruling underscores that administrative technicalities cannot override the right to medical reimbursement in emergencies, protecting pensioners from arbitrary denial of benefits.

ITAT Delhi rules that disallowance under Section 14A read with Rule 8D cannot be invoked if no exempt income is earned in the assessment year. The decision reinforces the 2022 amendment's prospective application, providing relief to taxpayers facing arbitrary disallowances on investments not yielding tax-exempt returns.

NCLAT reinforces that a pre-existing dispute under IBC Section 9 must be backed by concrete evidence-such as prior communications, quality complaints, or compensation offers-to block insolvency proceedings. Operational creditors cannot rely on spurious claims to circumvent CIRP initiation against corporate debtors.

ITAT Delhi rules that RERA-mandated compensation for delayed possession constitutes a transfer of capital asset, not interest income, and must be taxed as long-term capital gains. This precedent clarifies tax treatment for homebuyers receiving compensation under RERA, impacting real estate transactions and tax filings.

ITAT Mumbai rules that scholarships granted to Indian students for overseas education qualify as 'application of income' in India under Section 11(1)(c), preserving tax exemption for charitable trusts. The decision clarifies that the beneficiary's nationality, not the location of education, determines compliance with charitable purposes.

ITAT Delhi rules that allegations of income misuse under Section 13 of the Income Tax Act cannot justify rejection of trust registration under Section 12AB. The scope of scrutiny is limited to the genuineness of the trust's objects and activities, not the propriety of its financial transactions. This ruling clarifies the boundaries of tax authorities' powers in charitable trust registrations.

ITAT Mumbai rules that charitable trusts retain the vested right to utilise income accumulated under prior law, even if the sixth year falls after the 2022 amendment. The tribunal held that denying this right would amount to retrospective cancellation of a lawful entitlement, affecting trusts with long-term accumulation plans.

ITAT Delhi rules that forfeiture of earnest money deposit (EMD) in a joint gas tender, incurred to secure fuel for hotel operations, qualifies as a deductible business expenditure under Section 37 of the Income Tax Act. The ruling clarifies that such losses are revenue in nature, directly linked to business operations, and not capital expenditure.

CESTAT rules that insurance, professional fees for forex hedging, and HR training services qualify as input services under Rule 2(l) of the Cenvat Credit Rules, 2004, entitling manufacturers to credit. The decision clarifies the scope of 'input service' for indirect tax credit eligibility, impacting manufacturers availing such services.

CCI clarifies that limiting Core Banking Solution upgrades to Infosys-authorized partners does not violate Sections 3 or 4 of the Competition Act, reinforcing that procurement restrictions tied to technical compatibility do not constitute anti-competitive conduct. The ruling sets a precedent for digital infrastructure procurement disputes involving statutory monopolies and OEM dependencies.

NCLAT rules that a SEBI delisting order renders a promoter ineligible under Section 29A(f) of the IBC, overriding the moratorium protection. This precedent bars resolution applicants with market access prohibitions, regardless of the corporate debtor's insolvency status, impacting promoter-led resolution plans.

ITAT Bangalore rules that disallowance of interest under Section 36(1)(iii) of the Income Tax Act is unsustainable if the assessee's interest-free funds exceed advances to sister concerns. The ruling reinforces that balance sheet evidence alone can disprove tax avoidance presumptions, impacting corporate tax assessments.

ITAT Mumbai condones a 796-day delay in filing a tax appeal, holding that Covid-related disruptions and non-receipt of the assessment order under Section 144 constitute 'sufficient cause' under Section 249(3). The ruling reinforces that substantial justice prevails over procedural technicalities, particularly where assessees face genuine hardships in compliance.