Tribunals and Commissions judgments

ITAT Agra rules that foreign tax credit claims under Double Taxation Avoidance Agreements (DTAA) cannot be invalidated merely due to delayed Form 67 filing. The tribunal held that Rule 128(9) of the Income Tax Rules is procedural, not mandatory, and treaty rights prevail over procedural non-compliance, offering relief to taxpayers with foreign income.

ITAT Mumbai rules that TDS credit on dividend income accruing after a taxpayer’s death must be allowed to the deceased’s estate, not the legal heir, under Section 168 read with Section 199 of the Income Tax Act. The decision clarifies that the estate is the taxable entity for post-demise income, overriding procedural requirements under Rule 37BA(2) where factual timing of income accrual is established.

ITAT Ahmedabad rules that digital evidence, such as mobile phone data, cannot sustain tax additions under Section 69A for unexplained cash unless corroborated by independent inquiry or direct assessee linkage. The Tribunal dismissed cash addition claims in land transactions, reinforcing the need for substantive proof beyond digital records.

ITAT Mumbai rules that inter-company cost allocations under Section 37(1) of the Income Tax Act are deductible if backed by a contractual agreement and a rational allocation method. The ruling clarifies that group companies can claim such expenses without disallowance if they demonstrate a clear business nexus and avoid markup, offering relief to corporate taxpayers.

ITAT Pune rules that penalties under Section 270A cannot be sustained where deduction claims (e.g., Section 80P) are debatable or previously allowed in identical cases. The ruling shields assessees from punitive action for legitimate, albeit disputed, tax positions, reinforcing judicial safeguards against arbitrary penalty imposition.

ITAT Ahmedabad rules that the 60% tax rate under Section 115BBE applies prospectively from A.Y. 2018-19, not A.Y. 2017-18, invalidating rectification orders under Section 154 where legal interpretation is debatable. The decision reinforces natural justice principles, protecting assessees from retrospective tax impositions without clear legislative intent.

ITAT Mumbai rules that penalty under Section 271(1)(c) cannot be imposed merely on estimated additions unless concealment of income is proven. The decision clarifies that additions based on gross profit rates or suspected accommodation entries do not meet the legal threshold for penalty, protecting taxpayers from arbitrary penal action.

ITAT Mumbai rules that the issuance of a Section 143(2) notice by the Jurisdictional Assessing Officer does not invalidate a faceless assessment under Section 144B. The Tribunal remanded the case for fresh adjudication on merits, reinforcing that procedural compliance under faceless assessment regimes does not override jurisdictional authority. This ruling clarifies the interplay between jurisdictional notices and faceless assessment procedures, impacting tax assessees and revenue authorities alike.

ITAT Ahmedabad rules that reassessment under Section 147 is invalid if initiated after the merger of the original assessment with the CIT(A) order, unless there is a failure to disclose material facts. The ruling reinforces procedural safeguards against arbitrary reassessment, impacting tax litigation strategy for government and corporate assessees.

CESTAT Chennai rules that misdeclaration of a new vehicle as used does not constitute prohibited goods under Section 111(d) of the Customs Act, mandating redemption under Section 125. The ruling clarifies that absolute confiscation is unwarranted unless goods are inherently banned, impacting importers facing policy violations.

ITAT Surat ruled that cash deposits during demonetization cannot be treated as explained income under Section 68 without documentary proof of source, identity, and creditworthiness. The tribunal also penalized violations of Sections 269SS and 269ST, reinforcing strict compliance for high-value cash transactions.

ITAT Pune rules that late fees under Section 234E of the Income Tax Act cannot be imposed for periods prior to 01.06.2015, even if TDS returns were filed late. The Tribunal also held that delays in filing appeals must be condoned when the assessee challenges the jurisdiction of the authority, ensuring substantive justice over procedural rigidity.

ITAT Ahmedabad rules that Corporate Social Responsibility (CSR) expenses cannot be added back to 'book profit' for Minimum Alternate Tax (MAT) calculations under Section 115JB. The tribunal also clarifies that Section 14A disallowance for exempt income does not apply when tax liability is computed under MAT, offering relief to taxpayers facing revisionary proceedings.

ITAT Nagpur rules that organizing medical conferences to disseminate specialized knowledge constitutes 'education' under Section 2(15) of the Income Tax Act, entitling trusts to Section 12A registration. The ruling clarifies that surplus generated from such activities must be ploughed back into charitable objects to retain tax-exempt status, impacting medical and scientific trusts nationwide.

CAT Lucknow rules that a judgment granting MACP benefits operates in rem, mandating its extension to all employees in identical positions unless barred by laches or acquiescence. This holding reinforces Article 14's equality principle in service law, impacting government employees seeking parity in pay-scale upgrades.

ITAT Mumbai rules that for capital gains computation under Section 50C, the stamp duty valuation must be pegged to the date of the sale agreement-not registration-if the consideration was received prior to registration. This holding clarifies the timing for deeming provisions and prevents arbitrary additions to taxable income.

ITAT Bangalore condoned a 74-day delay in filing an income tax appeal because the assessee’s failure to receive the assessment order stemmed from a consultant’s negligence, even in the absence of formal engagement documents. This ruling affirms that reasonable reliance on professional advisors, when genuine and not negligent, qualifies as sufficient cause under Section 250(6) of the Income Tax Act - protecting taxpayers who act in good faith despite procedural gaps.

ITAT Delhi rules that delivery order charges received by Turkish Airlines are integral to international air transport profits under Article 8 of the India-Turkey DTAA, making them taxable only in Turkey. The decision clarifies that ancillary charges directly connected to air cargo operations fall within the scope of 'international traffic' and are exempt from Indian taxation.

CESTAT Chandigarh rules that a corporate guarantee issued by an overseas parent company without monetary consideration does not constitute a 'taxable service' under service tax law. The tribunal quashed a ₹11.6 crore demand, holding that the reverse charge mechanism cannot apply where no service fee or benefit is exchanged, setting a precedent for cross-border financial arrangements.

ITAT Mumbai rules that surrendering rights in a capital asset (via allotment letter) constitutes a 'transfer' under Section 2(47), making capital gains taxable under Section 45. This disqualifies additions under Section 69A for unexplained income and preserves Section 54 exemption eligibility for assessees.

ITAT Mumbai rules that additions under Section 69 of the Income Tax Act cannot be justified based solely on third-party electronic data (e.g., Excel files from a search) unless the assessee is confronted with the evidence and given an opportunity for cross-examination. The tribunal emphasized that unauthenticated digital documents lack evidentiary value under the Indian Evidence Act, reinforcing natural justice principles in tax proceedings.

ITAT Delhi condones a 3-year delay in filing an appeal against a penalty under Section 271(1)(c) IT Act, ruling that lack of legal awareness and procedural confusion constitute 'sufficient cause'. The decision underscores that assessees without professional assistance may seek relief from strict timelines where genuine ignorance is proven.

CESTAT Kolkata rules that the limitation period for filing a service tax appeal under Section 85(3A) of the Finance Act 1994 commences only from the date of actual receipt of the order, not the deemed service date. The Tribunal remanded the case for merits adjudication, emphasizing natural justice where prior notices were unserved.

ITAT Delhi rules that reassessment proceedings triggered by evidence from a search under Section 132 must strictly follow Section 153C of the Income Tax Act. Reassessment under Section 147 is invalid if it relies on search materials, reinforcing jurisdictional exclusivity for such cases. This precedent binds tax authorities to adhere to the prescribed procedure, impacting all reassessment cases involving search-derived evidence.