The ITAT upheld the deletion of additions made under Section 153A for an unabated assessment year because the Assessing Officer relied solely on entries in the regular books of account. The ruling reaffirmed the Supreme Court’s mandate that no addition is permissible in completed (unabated) assessments without specific, incriminating material seized during the search.
The ITAT quashed an assessment where the taxpayer’s declared income exceeded the Rs.30 Lakh limit for an ITO in a metro city. Relying on CBDT Instruction No. 1/2011 and Calcutta High Court precedent, the Tribunal ruled that the assessment suffered from a lack of inherent jurisdiction and was void ab initio.
An assessment was quashed as the ACIT (a senior authority) issued the reassessment notice for an income below the Rs.15 Lakh limit, which was exclusively the ITO’s jurisdiction. The Tribunal affirmed that this jurisdictional defect is fatal and cannot be cured, following the Bombay High Court’s ruling.
The ITAT quashed a scrutiny assessment because the Rs.143(2) notice was issued by the ITO, a junior officer, despite the declared corporate income exceeding the Rs. 30 Lakh metro city limit. Jurisdiction for issuing the notice and conducting the assessment belonged solely to the DCIT, making the entire proceeding illegal.
The Tribunal confirmed that no disallowance under Section 14A can be made when the assessee earned no exempt income during the year. Following Calcutta High Court precedents, the ITAT rejected the Revenue’s attempt to apply the prospective Finance Act 2022 amendment to the relevant assessment year (AY 2014-15).
The ITAT ruled that loss from trading in foreign currency derivatives on a recognized exchange is non-speculative business loss, eligible for set-off under Section 43(5)(d). The Tribunal held that such transactions are covered by the exception for derivatives and rejected the lower authorities’ mechanical disallowance.
The ITAT invalidated an assessment due to two fundamental defects: the 143(2) notice was invalid as it failed to specify the type of scrutiny (Limited/ Complete) per CBDT instructions, and the assessment was completed by the ACIT, who lacked pecuniary jurisdiction over the Rs.10.41 Lakh income case. The ruling stresses that procedural compliance with binding CBDT instructions is mandatory, or the entire assessment becomes void.
This decision emphasizes that violation of binding CBDT instructions, such as failing to specify the category of scrutiny in the Sec. 143(2) notice, strikes at the root of the assessment. The Kolkata Tribunal quashed the entire Sec. 143(3) assessment as being without jurisdiction, affirming that legal grounds can be raised at any stage.
The ITAT Kolkata quashed a search assessment (Sec. 153A) because a search was never physically conducted on the assessee’s premises, ruling that a mere mention in a panchnama is insufficient to confer jurisdiction. The key takeaway is that an assessment under Sec. 153A is void ab initio if an actual search on the person or property of the assessee is not initiated and conducted.
The Kolkata ITAT allowed Winner Tradecom Pvt. Limited’s appeal, deleting a ₹15 lakh addition made under Section 68 for an alleged credit from a shell company.
