The ITAT set aside the CIT(A)’s order which had wrongly confirmed a 37% surcharge on a Discretionary Trust with low income, relying on a precedent later clarified by the Tribunal. The ruling establishes that levying the highest 37% surcharge rate on MMR trusts, without considering the income slabs, leads to legal absurdity and is incorrect.
The ITAT partly allowed the Revenue’s appeal, upholding the Section 147 reopening as the notice was issued within the four-year limit because the assessee hadn’t filed a return. However, the Tribunal confirmed the deletion of the Section 50C capital gains addition, ruling that the AO is bound by the DVO’s accepted valuation after making a reference.
The case confirms that the CBDT’s Section 151A notification makes the NFAC/NPAC the sole authority for issuing Section 148 reassessment notices after March 29, 2022.4 The ITAT ruled that the local AO lacked the legal authority, rendering the entire reassessment process and order non est.
The ITAT held that alleged on-money based on an unverified photocopy of a sale agreement could not be added to income, emphasizing that a registered sale deed is the primary document. Furthermore, payments made in the next financial year cannot be taxed in the current Assessment Year, leading to a significant deletion of the unexplained investment addition.
The ITAT held that a reference to the Departmental Valuation Officer (DVO) under Section 50C(2) is mandatory when the taxpayer objects to the stamp duty valuation of the property sold. The Tribunal set aside the addition of short-term capital gains, ruling that the AO erred by directly adopting the jantri value without obtaining a DVO report, and remanded the matter for re-adjudication.
The ITAT set aside the additional tax demand raised by applying Section 50C through Section 154 (Rectification), ruling that this aspect of the transaction must be adjudicated simultaneously with the primary, remanded issues of cost of acquisition and cost of improvement. The final computation must await the fresh determination of the capital gains after the DVO report and verification of expenses.
The Revenue relied on suspicion and the principle of human probability to challenge cash deposits made by a crockery and electronics trader during the permitted demonetisation window. The Tribunal held that without first rejecting the books of accounts under Section 145(3), the AO cannot legally disregard the substantial cash-in-hand shown by the assessee’s audited records and verified festival season sales.
ITAT Bangalore partially allowed Shobha Sundar Babu’s appeal, admitting new loan documents obtained via Karnataka High Court order and remanding the Rs. 53,09,817/− deduction claim under Section 24(b) to the AO for fresh verification.
The Bombay High Court set aside the Deputy Commissioner’s order retrospectively canceling Dipak Metal Industries’ GST registration, ruling a gross violation of natural justice for serving notice to an outdated address.
The Bombay High Court ordered the restoration of a firm’s cancelled GST registration after it paid all outstanding dues, interest, and late fees, accepting the delay was bona fide. The court imposed an additional ₹50,000 cost payable to a hospital under Corporate Social Responsibility (CSR).
