ITAT Jaipur held that denial of Section 11 exemption solely due to non-furnishing of the registration certificate under Section 12A is invalid where 80G approval exists, since 80G presupposes valid 12AA registration.
ITAT Jaipur quashed an addition of Rs.14.47 lakh made under Section 69A because the assessment was framed by a Jaipur-based AO who lacked territorial jurisdiction over the assessee residing in Sri Ganganagar. The Tribunal ruled that the objection to jurisdiction, raised by the assessee and unrebutted by the Revenue, renders the entire assessment order void ab initio.
The Income Tax Appellate Tribunal (ITAT) deleted a ₹22.21 lakh penalty under Section 271AAB, ruling that the show-cause notice was defective for not specifying the charge. The Tribunal also held that mere stock valuation differences and an already offered cash investment do not qualify as “undisclosed income” under the section’s strict definition.
The ITAT Jaipur ruled that an entire reassessment order must be quashed if the Assessing Officer (AO) makes no addition on the specific issue for which the case was reopened. Following the binding Rajasthan High Court precedent in Shri Ram Singh, the Tribunal held that the AO loses jurisdiction to assess unrelated, other escaped income (like LTCG) once the initial reason to believe is found to be incorrect.
ITAT Jaipur held that gain not realized during the year under consideration cannot be taxed under the head capital gain or as income under the head profit and gains of business or profession by valuing unsold scrips at market value.
This ruling clarifies that cash deposits during the demonetization period cannot be taxed as unexplained money under Section 68 when they are fully reflected in the business’s accepted books and sales. The ITAT emphasized that the AO failed to reject the books of account under Section 145(3) before making the addition, thereby deleting the entire demand.
once the income forming the basis of AO’s reason to believe is explained, AO cannot tax other income independently
The Tribunal partly allowed the appeal, asserting that once supporting documents are filed, genuine capital expenses like a boundary wall cannot be dismissed as bogus. The judgment confirms that only costs directly enhancing the asset’s value (like construction) are eligible as a cost of improvement, leading to the disallowance of security guard charges.
This critical ruling confirms the principle that a notice issued to a dead person is legally null and void, even if a legal heir later participates in the assessment. The ITAT emphasized that the correct procedure was to initiate proceedings afresh against the legal heir, not to continue the invalid proceedings, thereby quashing the entire reassessment.
The ITAT set aside the PCIT’s revision order, confirming that the revisional power under Section 263 cannot be invoked merely to conduct a deeper inquiry or change a view previously taken by the AO. Since the AO had specifically examined and verified the share’s Fair Market Value (FMV) during the original scrutiny, the assessment was neither erroneous nor prejudicial to the Revenue.
