CREST ULTRASONICS INDIA PVT LTD,DELHI vs. ADIT WARD-6(1) DELHI, DELHI

PDF · subscribers
ITA 2038/DEL/2022Status: DisposedITAT Delhi17 February 2023AY 2020-214 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal admitted the revised tax audit report as additional evidence. It restored the issue to the Commissioner (Appeals) to decide afresh after considering the additional evidence and providing a hearing opportunity.

What were the facts?

The assessee's return was processed under Section 143(1) and an addition of Rs. 8,39,873 was made for commission to a director and bonus to employees. The assessee claimed this was due to a clerical error in the tax audit report.

What were the issues?

Whether the addition made due to a clerical error in the tax audit report is sustainable. Whether additional evidence (revised audit report) should be admitted.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 36(1)(ii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI

Before: SHRI SAKTIJIT DEY

For Appellant: Shri R.K. Gaur, CA
For Respondent: Shri Anil Kumar Sharma, Sr. DR
Hearing: 08.02.2023

ORDER This is an appeal by the assessee against order dated 30.06.2022 of National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2020-21.

2.

The dispute in the present appeal is confined to addition of Rs.8,39,873.

3.

Briefly, the facts are, the assessee is a resident corporate entity.

For the assessment year under dispute, the assessee filed its return of income declaring income of Rs.24,64,190. While processing the return under Section 143(1) of the Income-Tax Act,1961, the Centralized Processing Centre made adjustment for an amount of Rs.8,39,873 comprising of Rs.5,99,348 paid as commission to director and Rs.2,40,525 being bonus to employees.

4.

The assessee contested the aforesaid additions before the learned Commissioner (Appeals), however, he declined to interfere.

5.

Before me, learned counsel appearing for the assessee submitted, that in the tax audit report, due to an inadvertent clerical error, the amount has been shown as disallowable item. He submitted, subsequently the auditor has rectified the error by issuing a revised audit report, wherein, the amount has been removed from column no.20 (a) of the tax audit report. In this regard learned counsel for the assessee submitted an application seeking permission to furnish the revised audit report as additional evidence. He submitted, additional evidence could not be furnished before the first appellate authority due to change of incumbent in the appellate proceedings.

6.

Learned Departmental Representative submitted that in view of the additional evidence furnished by the assessee, the issue can be reexamined by learned Commissioner (Appeals).

7.

I have considered rival submissions and perused the material available on record.

8.

It is observed, in the original tax audit report the auditor has mentioned the amount in dispute in column no.20(a) as sum paid to an employee as bonus or commission for services rendered but the sum was otherwise payable to him as profit and dividend. Thus, it was shown as an item which falls under Section 36(1)(ii) of the Act.

9.

Based on the aforesaid report of the auditor, CPC, while processing the return, added the amount to the income of the assessee.

However, before me, it is the case of the assessee that due to inadvertent clerical error, the amount has been wrongly mentioned in column no. 20(a) of the tax audit report.

10.

Before me, a revised audit tax report has been filed as additional evidence.

11.

After considering the submission of the assessee, I am inclined to admit the additional evidence. However, considering the fact that the departmental authorities had no occasion to examine the additional evidence qua assessee’s claim, I am inclined to restore the issue to learned Commissioner (Appeals) for deciding afresh after taking note of the additional evidence filed by the assessee in the form of revised audit report.

12.

Needless to mention, before deciding the appeal assessee must be given a fair opportunity of being heard.

13.

In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 17th February, 2023.

More judgments on Section 36(1)(ii)

All 220 judgments and leading authorities on Section 36(1)(ii) →

Recent GST High Court judgments

Search GST case law →