The Tribunal clarified that CPC could not make prima facie adjustments denying Section 80P deduction before the Finance Act, 2021 amendment. The disallowance made in 2019 was held invalid and deleted.
The Tribunal clarified that under the pre-amended law, accumulated income could be applied within five years or the immediately following year. Utilization within the sixth year barred taxation in AY 2023-24.
The ruling confirms that transactions with banks involve third parties, defeating the identity required for mutuality. While sustaining taxability, the Tribunal permitted a 5% estimated expense deduction to compute real income.
ITAT Kolkata held that reassessment under Section 147 was invalid as it relied solely on existing records. In absence of new tangible material, reopening amounted to impermissible review.
The addition under Section 68 was deleted as capital introduced by partners is not a loan or unexplained credit of the firm. Enquiry into partners creditworthiness must be conducted separately in their cases.
The Tribunal observed that merely using the term misreporting without linking it to any specific statutory limb is insufficient. It quashed the penalty, reiterating that penal proceedings must be precise and legally justified.
The Tribunal upheld 200% penalty under Section 270A for misreporting income through ineligible deductions. Admitted incorrect claims were treated as conscious misrepresentation, not a bonafide error.
The Tribunal held that cash received at the time of executing a registered sale deed does not fall within the definition of “specified sum” under Section 269SS. Since the provision primarily targets advances in property transactions, penalty under Section 271D was unsustainable.
The Tribunal noted that the AO reopened the case under the mistaken belief that no scrutiny assessment had been made. Such factual error and absence of new incriminating material vitiated the assumption of jurisdiction under Section 147.
The AO recorded reasons for escapement without receiving confirmation from the Sub-Registrar. ITAT ruled that absence of tangible evidence vitiated reassessment, making the subsequent Section 263 revision unsustainable.
