Tribunals and Commissions judgments

ITAT Surat quashed a reassessment notice u/s 148 issued after 01.04.2021 for AY 2015-16, relying on Rajeev Bansal (SC) and Deepak Steel (SC). The ruling clarifies procedural validity of reassessment notices under amended Section 147-149 post-TOLA amendments.

ITAT Delhi rules sale of milk by a gaushala trust is incidental to its charitable purpose under Section 2(15) proviso, affirming Section 12A registration. The ruling clarifies that receipts from milk sales do not disqualify trusts from tax exemptions if aligned with primary charitable objectives.

CESTAT Chennai ruled that transaction value under Rule 12 of the Customs Valuation Rules, 2007 cannot be rejected solely on NIDB data. The ruling reaffirms primacy of declared transaction value unless supported by legally admissible contemporaneous import evidence, impacting valuation disputes nationwide.

CESTAT Mumbai rules that Section 35FF interest on pre-deposits applies to amounts deposited prior to 06.08.2014 under erstwhile provisions. The ruling clarifies retrospective applicability of interest on refunds for excise duty disputes, impacting pre-2014 deposit cases pending adjudication.

ITAT Kolkata rules that repayment of loans in subsequent years discharges the assessee's burden under Section 68 of the Income Tax Act, setting aside an unexplained cash credit addition of ₹1.4 crore. The ruling clarifies that delayed repayments do not automatically trigger Section 68 additions, providing relief to taxpayers facing shell company allegations.

ITAT Agra quashed unexplained bank deposits addition of Rs. 35,92,020 for CIT(A)'s failure to provide a reasoned order and violate natural justice under Section 250(6). The ruling underscores mandatory procedural compliance in appellate assessments, impacting pending unexplained income cases.

CESTAT Chandigarh has ruled that Section 110A of the Customs Act entitles importers to provisional release of restricted goods even when classification is disputed, provided there is no allegation of concealment, fraud, or misdeclaration. This overturns blanket denials based on voided CBIC circulars and reinforces natural justice by requiring disclosure of test reports before denying release, impacting all importers of regulated goods like jewelry and electronics.

The ITAT Delhi has held that dismissing a tax appeal ex-parte without addressing merits or providing reasons violates Section 250(6) of the Income Tax Act, which mandates reasoned appellate orders. This ruling reinforces that procedural fairness cannot be sacrificed even when notices are allegedly missed, and sets a precedent for taxpayers facing technical dismissals due to administrative or personal hardship.

ITAT Delhi has ruled that cash withdrawn from a proprietor’s capital account shortly before a search can constitute a credible source for unexplained cash, overturning an addition of Rs. 9 lakh under Section 69A. This sets a critical precedent for small business owners facing scrutiny during income tax searches, affirming that ledger entries alone - even without vouchers - may suffice if consistent with business practice and timing.

CESTAT rules that sending tax orders via speed post without confirmed delivery proof fails to satisfy statutory service requirements under Section 37C, rendering the order ineffective for limitation purposes. This sets a critical precedent for taxpayers and revenue authorities alike, mandating verifiable receipt for any official communication that triggers statutory deadlines.

CESTAT rules that when common input services are used for both taxable services and non-service investment activities like securities trading, proportionate reversal of CENVAT credit is mandatory. This clarifies a critical boundary in indirect tax compliance for financial institutions and corporate entities with dual-use expenditures, preventing unjustified credit claims on non-taxable activities.

The ITAT Raipur bench ruled that dismissing an income tax appeal solely due to delay, without affording the appellant an opportunity to explain the reason, violates fundamental principles of natural justice. This sets a critical precedent for taxpayers and tax authorities alike: procedural fairness trumps technical non-compliance when substantive rights are at stake.

The ITAT Agra bench ruled that technical non-compliance with Form 10AB filing deadlines cannot justify summary rejection of charitable trust registration when the entity’s core charitable purpose is clear and undisputed. This reinforces that natural justice and substantive fairness must prevail over rigid procedural defaults in tax exemption matters.

The ITAT Delhi has ruled that cash deposits made during demonetization, if fully supported by genuine, audited cash sales recorded in the books of account and already taxed as turnover, cannot be reclassified as unexplained income under Section 68. This protects businesses with transparent cash-based operations from double taxation and reinforces that proper bookkeeping is a valid defense against presumptive tax additions.

CESTAT Bangalore has ruled that input service credit for executive jet hiring and aviation services is eligible under CENVAT Rules if used directly or indirectly in manufacturing operations, provided no evidence of misuse exists. This clarifies a critical gray area for manufacturing firms using premium transport for logistics, client visits, or inter-regional coordination, expanding the scope of allowable input services beyond traditional infrastructure.

The ITAT Delhi has ruled that reassessments under Section 153C cannot proceed if the deemed date of search falls on or after April 1, 2021, due to the Finance Act 2021 amendment that eliminated the power to initiate such proceedings beyond that date. This decision protects taxpayers from retrospective application of reassessment powers and clarifies the temporal limits of search-related assessments under the Income Tax Act.

The ITAT Delhi has ruled that returning excess CSR funds to the original donor does not violate Section 13(1)(c)(ii) of the Income Tax Act, as it lacks the element of benefit to a prohibited person. This clarifies that charitable trusts can return unutilized corporate donations without forfeiting their tax exemption under Section 11, providing critical relief to NGOs managing CSR compliance.

The ITAT Delhi has ruled that an entity pursuing both religious propagation and active charitable work-such as education and medical relief for the underprivileged-cannot be registered solely as a religious body under Section 12AB. This decision ensures that entities fulfilling broader public welfare objectives are not unfairly confined to narrow religious classification, expanding access to tax exemptions for genuinely charitable initiatives.

The ITAT Mumbai ruled that fees for research management support services do not constitute Fees for Technical Services under the India-Singapore DTAA unless the recipient receives and retains transferable technical knowledge. This clarifies the boundary between advisory support and taxable technical service, impacting multinational corporations structuring intra-group support arrangements in India.

The ITAT Ahmedabad affirmed that the Principal Commissioner can invoke revisional powers under Section 263 even after assessment is complete, if a subsequent DVO report proves the original valuation was materially understated, leading to significant revenue loss. This sets a critical precedent for tax authorities to act on credible post-assessment evidence that exposes deliberate or negligent undervaluation of capital assets.

The ITAT Delhi has ruled that Common Area Maintenance charges collected by mall owners from tenants constitute service payments under Section 194C, not rent under Section 194I, reversing the TDS demand at 10%. This clarifies a critical distinction for commercial property managers, mall operators, and deductors who must now apply 2% TDS on such service fees instead of 10% on rent, reducing compliance risk and tax liability.

The ITAT Delhi has ruled that the CPC cannot unilaterally treat foreign contributions disclosed under FCRA as undisclosed income under Section 143(1), especially when the assessee has consistently reported them over multiple years. This sets a critical precedent for NGOs and non-profits, affirming that mechanical adjustments without verification violate procedural fairness and the principle of tax consistency.

The ITAT Delhi ruled that disallowance of business expenditure under Section 37(1) is unlawful when the tax authority fails to verify a vendor at the correct address provided by the assessee and ignores supporting KYC, TDS, and payment records. This sets a critical precedent for taxpayers: documentary compliance must be evaluated on substance, not procedural missteps by revenue officials.

The ITAT Surat has ruled that the Principal CIT cannot use Section 263 to reopen an assessment already concluded under Section 147 if the AO conducted a thorough scrutiny, accepted the assessee’s return, and no evidence of revenue loss was established. This reinforces that revisionary powers are not a substitute for proper reassessment and protects taxpayers from arbitrary re-litigation after full adjudication.