1. NOTIFICATION [No.09/2023/F.No.300196/39/2021-ITA-I] dated 01.03.2023
Vide this notification the Central Board of Direct Taxes (CBDT) has notified ‘Insolvency and Bankruptcy Board of India’ for the purposes of the clause (46) of section 10 of the Income-tax Act, 1961. The exemption shall be available in respect of Grants-in-aid, fees & fines collected under IBC and interest income accrues on them.
2. NOTIFICATION G.S.R. 118(E) [NO. 7/2023 [F. NO.370142/47/2023-TPL] dated 22.02.2023
Vide this notification the Central Board of Direct Taxes (CBDT) notifies new audit reports to be furnished by charitable or religious trusts and other institutions. That the CBDT via this Notification dated 22.02.2023 notified Income-tax (third amendment) rules, 2023 – substitution of rules 16CC and 17B, and substitution of form Nos. 10B and 10BB.
3. NOTIFICATION G.S.R. 156(E) [NO. 8/2023 (F. NO. 370142/51/2022–TPL)] DATED 28.02.2023
Vide this notification the CBDT has issued corrigendum to its Notification G.S.R. 91(E), dated 10-02-2023 issued to notify new Income-tax Return (ITR) forms applicable for the Assessment Year 2023-24. The corrigendum is issued to correct minor errors/omissions in the ITR forms.
Important Judicial Precedents
- Re-assessment order stands invalidated where passed without enabling assessee to cross examine relevant witness whose statement was relied on to pass order; Rules of Natural Justice contravened: ITAT
In the absence of providing opportunity to cross examine Mr Nuruddin Ajani, there is violation Principles of natural justice. Before us, the revenue has expressed its inability to produce the sworn statement recorded from Mr Nuruddin Ajani or Mr D N Israni. Hence, it is not clear as to whether the above said two parties have implicated the assessee in this deal, if any. Even if it is assumed for a moment that these parties have admitted to have received amount of Rs.60 lakhs from the assessee, it is not shown that the action taken by the revenue in the hands of the above said two persons in respect of the above said amount. Hence, on a conspectus of the matter, we are of the view that the AO was not justified in making addition of Rs. 60.00 lakhs in the hands of the assessee, as other corroborative evidences militate against the impugned addition. Accordingly, we set aside the order passed by CIT (A) on this issue and direct the AO to delete this addition.
[2023-TIOL-150-ITAT-MUM _ ITA No. 2838/Mum/2016 _AY 2005-06 _ LATE SHRI NAZMIN JAMAL Vs. INCOME TAX OFFICER-20(3)(5)]
2. Where assessee sold land at a price less than stamp duty value and AO made additions on basis of difference between value declared by assessee and value determined by DVO, since value determined by DVO was based on estimation, additions made on basis of estimation could not be foundation for under-reported income for purpose of imposition of penalty under section 270A
Section 270A, read with section 43CA, of the Income-tax Act, 1961 – Penalty for under-reporting and misreporting of income – Assessment year 2017-18 – Assessee sold land at a price less than stamp duty value – Assessing Officer made additions by taking note of stamp value – Later, on receipt of report from DVO, rectification order was passed and additions were made on basis of difference between value declared by assessee and value determined by DVO – Consequently, Assessing Officer also imposed penalty under section 270A – It was noted that value determined by DVO was an estimate based on other properties at different rates and then rates were averaged to find out value which property ought to have realised on transfer – Whether since difference between value determined by assessee and by DVO was minimal, additions made on basis of estimation could not be foundation for under-reported income for purpose of imposition of penalty under section 270A and same was to be deleted – Held, yes [Paras 3 and 4 [In favour of assessee]
[2023] 147 taxmann.com 333 (Pune – Trib.)[10-02-2023] Jaibalaji Business Corporation (P.) Ltd. vs. ACIT, Circle-14.
3. New property shall be deemed to have been acquired only when assessee gets its possession: ITAT
Section 54 of the Income-tax Act, 1961 – Capital gains – Profit on sale of property used for residence – Assessment year 2019-20 – Assessee, a non-resident Indian, had sold his bungalow and earned long term capital gain – He claimed deduction of partial capital gain under section 54 for investment made in a residential flat – Assessing Officer held since new property purchased by assessee was beyond one year preceding to sale of old property, thus, he was not entitled for deduction under section 54 – It was noted that assessee had sold old property on 23-10-2018 – Further, he entered into an agreement with developer on 21-12-2016 for purchasing new residential flat i.e. he had only received right to get flat from developer – However, it was only on 24-1-2018 that assessee received possession letter of said new property after construction was completed – Whether new property shall be deemed to have been acquired only when it was ready, full consideration had been paid and possession was received by assessee – Held, yes
Whether further where at time of execution of agreement, residential property was not in existence, date of possession of flat would be actual date of purchase for claiming exemption under section 54 – Held, yes – Whether, in view of facts and principles, since assessee had received possession of new flat on 24-12-2018 which was within prescribed time limit under section 54 from date of sale of old residential house i.e. 23-10-2018, therefore, assessee was entitled to benefit of exemption under section 54 – Held, yes [Paras 8 and 9] [In favour of assessee]
4. Whether credit for TDS should go to person in whose hands income is finally assessed to tax in accordance with law irrespective of person in whose hands TDS was deducted and TDS Certificate was issued at first place – YES: ITAT
The CBDT has framed Rule 37BA which contains the conditions for granting credit for TDS for the purposes of section 199. The CIT(A) has extracted Rule 37BA in his appellate order. The Jaipur Bench in ITA No. 676/JP/15 in Jai Ambey Wines, Ajmer vs ACIT – 2017-TIOL-326-ITAT-JAIPUR observed that the essence of the provisions of the Section 199 r.w. corresponding Rules is that the tax deducted at source (TDS) is nothing but tax, and credit for TDS should go the person in whose hands the income is rightfully and finally assessed to tax in accordance with law irrespective of the person in whose hands the TDS has been deducted and TDS Certificate has been issued at first place; In so far as the assessee, Hari Shankar Singhania Estate is concerned, it shall abide by the procedure laid down u/s 199 r.w. Rule 37BA(2)(i), as amended by the Income Tax (Eight amendment) Rules, 2011 to enable the AO to give credit of TDS of Rs. 15,00,000/- in the hands of Late Hari Shankar Singhania (Individual) in AY 2013-14.
[2023-TIOL-231-ITAT-DEL_ITAT DELHI _ITA No. 4176/Del/2019 _AY: 2014-15 _HARI SHANKAR SINGHANIA ESTATE Vs. JCIT]
5. Whether PCIT can invoke its own jurisdiction u/s 263 of the Act in cases where AO failed to initiate penalty proceeding observing that the order of the AO is erroneous and prejudicial to interest of revenue – NO: ITAT
Judicial proceedings hold that Commissioner is not entitled to set aside the assessment order passed by ITO on the ground that there was no mention of initiation of penalty proceedings in the order and that he could not direct the ITO to make fresh assessment to initiate penalty proceedings. Accordingly, we have no hesitation in holding that PCIT is not correct in assuming jurisdiction u/s 263 of the income tax act where AO has failed to initiate penalty proceedings and also does not record any satisfaction of furnishing of inaccurate particulars or concealment of income in the assessment order.
[2023-TIOL-147-ITAT-MUM _ ITA No. 1071/Mum/2022 _AY 2011-12 _ KUSEGOAN REALTY PVT LTD Vs. PCIT-2]
6. Whether deduction u/s 54B is not available on ‘on-money consideration’ paid for purchase of agricultural land in cash – YES: ITAT
Exemption u/s 54B does not emanate from the order of CIT (A), as no such ground of appeal was raised before the CIT (A). It is only before this Tribunal, the assessee has sought the relief u/s 54B in the form of additional ground of appeal. It is stated that the sale consideration received on sale of agricultural land was invested in purchase of agricultural lands in the name of son and daughter-in-law. It is further submitted that in respect of addition to above consideration, the assessee paid to on-money consideration for purchase of said agricultural land in cash. It is further submitted that the assessee also invested the same consideration in construction of the house property at Kedgaon by withdrawing the said amounts. Therefore, the assessee also sought the claim for deduction u/s 54B. Therefore, the assessee is not entitled for deduction in respect of section 54B;
[2023-TIOL-160-ITAT-PUNE _ ITA No. 1533/Pun/2016_AY 2011-12_ POPAT MANAJI RAHINJ Vs. ITO]
7. Non-filing of Form No. 10B in time can’t be a ground to deny sec. 11 exemption to trust: HC
Assessee obtained audit report from Chartered Accountant well before time, however, same could not be uploaded along with return of income inadvertently – In absence of any audit report, CPC had not granted exemption under section 11 which otherwise was available to it since many years and resultantly demand was raised – Assessee therefore filed a rectification application under section 154, seeking to place on record audit report to CPC but same was rejected on ground that Form No. 10B audit report, was not filed in time – Assessee filed an application before CBDT to condone delay in filing Form No. 10B audit report, however same was rejected.
Whether since assessee was a public charitable trust for past 30 years and substantially satisfied conditions for availing exemption under section 11 it should not be denied exemption merely on bar of limitation especially when legislature had conferred wide discretionary powers to condone such delay – Held, yes – Whether thus, impugned order of rectification under section 154 was quashed and set aside and application for condonation of delay filed by assessee before respondent was allowed – Held, yes [Para 5] [In favour of assessee] [2023] 147 taxmann.com 283 (Gujarat-HC) Social Security Scheme of GICEA vs. CIT (Exemptions)]