India's ITAT issues major rulings for Reliance Jio and NPCI

The Income Tax Appellate Tribunal (ITAT) in India has issued several significant rulings across various tax disputes. In a major victory for Reliance Jio Infocomm, the Mumbai ITAT deleted a ₹11,003 crore disallowance, ruling that accounting classifications in financial statements do not unilaterally determine whether expenses are capital or revenue for tax purposes.

The National Payments Corporation of India (NPCI) also secured a favorable ruling, with the Mumbai ITAT upholding its tax exemption status. The tribunal rejected arguments that transaction-based fees for services like RuPay and IMPS made its operations commercial, noting that NPCI serves a general public utility established at the initiative of the RBI.

Other notable decisions include:

• The Jaipur ITAT ruled that Section 69A additions cannot be sustained without proving ownership of the unexplained money, noting that third-party electronic material is insufficient.

• The Delhi ITAT dismissed an appeal by the Income Tax Department regarding alleged undisclosed foreign assets held by Tarun Trikha.

• The Mumbai ITAT directed that once Tax Deducted at Source (TDS) is deposited into the government treasury, it cannot be recovered again as a principal liability, though interest for the delay period remains applicable.

• In a case involving a farmer, the Bangalore ITAT condoned a 247-day delay in filing an appeal after finding that a professional failed to respond to notices on the assessee's behalf.