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Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Date of hearing 21.11.2022 Date of pronouncement 30.11.2022 ORDER
PER SAKTIJIT DEY, JUDICIAL MEMBER:
This is an appeal by the assessee against order dated 19.06.2014 of learned Commissioner of Income-Tax (Appeals)-XXVIII, New Delhi for the assessment year 2010-11.
2. The grounds raised by the assessee are as under:
A. Grounds relating to dis-allowance of remuneration paid to working partners. 1. The learned Assessing Officer erred in dis-allowing the remuneration paid to the workings partners.
The learned Assessing Officer failed to appreciate the fact that the working partners had paid tax on the sums received by them at maximum marginal rate.
B. Grounds relating to treatment of refundable professional fee as income. 3. The learned Assessing Officer erred in considering refundable professional fee as income of the Appellant. 4. The learned Commissioner(Appeals) erred in observing that the Appellant failed to provide evidences to show that the said professional fee was refundable, despite the Appellant providing e-mail communications to establish the nature of the advance.
C. Grounds relating to dis-allowance of business promotion expenses. 5. The learned Assessing Officer erred in dis-allowing business promotion expenses incurred by the Appellant. 6. The learned Assessing Officer erred in making a ad-hoc dis- allowance of business expenses incurred by the Appellant. 7. The learned Commissioner (Appeals) erred in observing the a part of the expenses are of personal nature.
D. Grounds relating to non granting a deduction under section 80G of the IT Act. 8. The learned Assessing Officer erred in not granting deduction under section 80G of the IT Act.
At the outset, Shri V. Sridharan, learned senior counsel appearing for the assessee submitted that due to smallness of the amount, ground nos. B and C are not to be pressed.
In view of the aforesaid submission of learned counsel, ground nos. B and C are dismissed as not pressed.
As regards, ground no.A, learned counsel submitted, the assessee is a partnership firm of advocates and derives income from profession and other sources. He submitted, in terms with the partnership deed, the assessee firm paid remuneration to the partners, as mutually agreed by the partners. However, the Assessing Officer was of the view that unless the remuneration to be paid to the partners is quantified in the partnership deed, it will not be allowed as deduction at the hands of the partnership firm. Accordingly, the Assessing Officer disallowed the deduction claimed by the assessee towards payment of remuneration to the partners. He submitted, once the deduction is disallowed at the hands of the partnership firm, the remuneration paid cannot again be taxed at the hands of the partners. He submitted, since, the partners had offered the remuneration received as income, they filed rectification applications under section 155 of the Act before the Assessing Officer and the Assessing Officer has passed orders under Section 155(1A) of the Act rectifying the assessment of the partners by reducing the income received by way of remuneration, thereby, granting the desired relief at the hands of the partners. He submitted, since, rectification orders have been passed in respect of the partners, the ground raised becomes in-fructuous. In any case of the matter, he submitted, the issue is tax neutral as the rate of tax, both, at the hands of the assessee and the partners are same.
The learned Departmental Representative agreed with the aforesaid submissions of the assessee.
Keeping in view the submissions of the parties, the ground having become infructuous, is dismissed.
In ground no. D, the assessee has raised the issue of disallowance of deduction claimed under section 80G of the Act.
Before us, learned counsel appearing for the assessee submitted, though, the assessee had claimed the deduction under section 80G of the Act, in the return of income, however, the Assessing Officer did not allow it. He submitted, in the appeal filed before the first appellate authority, the assessee inadvertently did not raise any ground on the issue. However, in the written submissions filed before learned Commissioner (Appeals), the assessee not only raised the issue of deduction under section 80G of the Act but filed the requisite approval and certificate of the donee. However, learned Commissioner (Appeals) completely ignored the submissions of the assessee.
Further, he submitted, assessee has filed a rectification application before the Assessing Officer which is pending. Thus, he submitted, this ground may be treated as an additional ground and the issue may be restored to the Assessing Officer for examining assessee’s claim of deduction under section 80G of the Act with reference to the evidences filed.
The learned Departmental Representative did not object to assessee’s submission for restoration of the issue to the Assessing Officer.
We have considered the submissions of parties and perused the materials on record.
Facts on record reveal, the assessee had claimed deductions under Section 80G of the Act in the return of income. However, the Assessing Officer overlooked assessee’s claim. Before learned Commissioner (Appeals), though, assessee did not raise any specific ground on the issue, however, in the written submission assessee not only raised the issue but furnished supporting evidences. However, learned Commissioner (Appeals) failed to take notice of assessee’s submission.
In view of the above, we accept assessee’s request for admitting the ground raised as additional ground.
However, considering the fact that the Departmental Authorities have not decided assessee’s claim of deduction under Section 80G of the Act and in any case of the matter, assessee’s rectification application on the issue is pending before the Assessing Officer, we restore the issue to him with a direction to examine assessee’s claim of deduction under Section 80G of the Act with reference to the supporting evidences filed by the assessee.
14. Needless to mention, the Assessing Officer must decide the issue in accordance with law after providing due opportunity of being heard to the assessee.
In the result, the appeal is partly allowed for statistical purposes. Order pronounced in the open court on 30th November, 2022.