Issue No. 282 / March 14^th, 2024

Journals Current Status

************

Judicial “forward & backward reference”

1) [TS-6377-HC-2016(Delhi)-O] relied in, [TS-6081-HC-2023(Bombay)-O] on revision remedy u/s. 264 available to assessee’s against genuine mistakes while filing ITR

2) [TS-316-SC-2015-O] followed in, [TS-5189-SC-2023-O] Sec.80HHC allowability as retro-amendment

3) [TS-5607-HC-2017(Madras)-O] followed in, [TS-7366-ITAT-2023(Chandigarh)-O] on Compensation to employees under special package exempt u/s 10(10B)

4) [TS-6959-ITAT-2020(Delhi)-O] relied in, [TS-6265-ITAT-2023(Delhi)-O] on cost reimbursement on account of secondment of employees cannot be treated as FTS

5) [TS-6803-ITAT-2022(MUMBAI)-O]  relied in, [TS-6355-ITAT-2023(Amritsar)-O] on addition of deposits on demonetisation

6) [TS-5437-ITAT-2016(Visakhapatnam)-O] followed in, [TS-6152-ITAT-2023(Bangalore)-O] on, once the A.O. examined the issues, the CIT cannot assume jurisdiction on the same issues which is already considered by the A.O., by stating that the A.O. has conducted inadequate enquiry or there is a lack of enquiry

7) [TS-7561-ITAT-2018(Bangalore)-O] affirmed in, [TS-5354-HC-2023(KARNATAKA)-O] on educational Institution's exemption on corpus donation

8) [TS-5793-HC-2017(Delhi)-O] set aside and matter remanded by SC in, [TS-5184-SC-2023-O]  on substantial question of law at the time of admitting the appeal.

9) [TS-6098-HC-2022(KERALA)-O]  distinguished in, [TS-6383-HC-2022(DELHI)-O]   on, reassessment order can be passed only after considering reply of assessee

10) [TS-5025-SC-2006-O] relied in,  [TS-6184-HC-2022(KARNATAKA)-O]  on, AO cannot sit in the arm chair of a businessman and decide what expenditure is expedient

***********************

 Key Takeaways from Handpicked Rulings 

1) HC: Sets aside order rejecting 4 years ITR-delay condonation, subject to Rs.10,000 cost - Bombay HC sets aside order rejecting application filed under Section 119(2)(b) seeking condonation of delay in filing income tax return for AY 2013-14; Notes Assessee’s contention that delay was unintentional and solely pertains to mistake committed by the accountant appointed to file income tax return and claim refund; Notes that the affidavit was filed by the accountant acknowledging the mistake committed which was filed before PCIT; Observes that Assessee filed income tax return for preceding as well as subsequent AYs within stipulated time and the reasons for non-filing of ITR for relevant AY was bonafide, accordingly, application seeking condonation of filing income tax return for AY 2013-14 requires liberal view; Accordingly, allows Assessee’s writ petition subject to cost of Rs. 10,000…………….. Click here to read and download Judgment copy

2) HC: Rejected books of account not reliable for invoking Sec.68 on trade payables - Punjab & Haryana HC upholds ITAT order wherein addition on account of increase in unexplained trade payable was deleted on the premise that once the books of accounts were rejected and ad hoc net profit rate has been adopted, the Revenue cannot rely upon any entry in those books for making addition under Section 68; HC notes that perusal of CIT(A) order go on to show that from preceding AYs 2012-13 to 2014-15 and even for subsequent AYs, the net profit rate at 6% was considered to be appropriate; Observes that ITAT is well justified in accepting CIT(A) order which was based on the material available on record and keeping in view the net profit of earlier as well as subsequent years which was far below 6%; Observes that no fault can be found in the procedure adopted by CIT(A) who applied higher rate of profit than the actual rate which was also affirmed by ITAT; Observes that ITAT was well justified to held that Assessee was a construction company and therefore, in a particular year, if there has been more consumption of raw material, it would not entail tax on the same as there was no concealment of any income; Observes that Revenue was not justified in making addition under Section 68..…..………… Click here to read and download Judgment copy

3) HC: Assessee’s bad health leading to audit delay, reasonable cause for penalty deletion - Madras HC deletes penalty levied under Section 271B for delay in e-filing audit report under Section 44AB in absence of mala fide intention since the Assessee underwent diagnosis of left sided radiculitis leading to non-finalization of audit report within the prescribed time limit; Opines that gross income disclosed by the Assessee was accepted subsequently by the Revenue along with declared total tax liability, accordingly, the Revenue’s conclusion on involvement of mala fide intention does not survive; Observes that it is an admitted position that Assessee was required to submit a tax report as per Section 44AB within specified time limit, however the report was filed beyond the expiry of prescribed time limit; Notes that Section 271B enables the Revenue to impose penalty equal to one half percent of total turnover or Rs.1.50 Lac whichever is less, however, Section 273B carves out an exception that no penalty shall be …………… Click here to read and download Judgment copy

***********************

***********************

5) HC: Quashes reassessment proceedings as less than 7 days provided to respond to Sec.148A(b) SCN - Karnataka HC quashes show cause notice under Section 148A(b) in the absence of physical/digital signature and consequential order under Section 148A(d) due to failure to provide less than 7 days’ time to file response to show cause notice under Section 148A(b); Notes Assessee’s reliance on coordinate bench judgment in Begur Sinnapa wherein it was held that a show cause notice under Section 148A(b) which is not either digitally or manually signed is invalid, inoperative and further proceedings pursuant thereto is liable to be quashed; Also relies on Bombay HC judgment Mukesh J. Ruparel wherein it was that if a show cause notice under Section 148A(b) prescribes a lesser period of seven days then the said notice would be vitiated resulting in quashing of not only the notice but also the subsequent assessment orders………….. Click here to read and download Judgment copy

************************