VJTF EDUSERVICES LIMITED,MUMBAI vs. DCIT - CIRCLE 13(3)(2), MUMBAI

At the outset, the learned counsel for the assessee submitted that the learned CIT(A) has dismissed the appeal solely on the ground that there was delay in filing the first appeal before him. It was submitted that the impugned order suffers from a patent error of law as well as complete non application of mind inasmuch as the very issue relating to delay in filing of the first appeal had already travelled before the Tribunal in the assessee’s own case. The Coordinate Bench of the Tribunal, vide order dated 06.09.2024 passed in ITA No.3768/Mum/2024, after considering the explanation furnished by the assessee regarding the delay caused during the Covid period, had condoned the delay in filing the appeal before the learned CIT(A) and restored the matter to his file with a specific direction to adjudicate the appeal on merits. It was thus contended that once the delay stood condoned by the Tribunal, the learned CIT(A) could not have once again dismissed the appeal on the identical ground of delay while passing the impugned order, thereby ignoring the binding directions of the Coordinate Bench.

On merits, the learned counsel submitted that the adjustment of Rs.43,63,303/- made under section 36(1)(va) is now covered against the assessee by the judgment of the Hon’ble Supreme Court in Checkmate Services (P.) Ltd. (143 Taxmann.com 178) (SC) and, therefore, the assessee

Per contra, the learned Departmental Representative relied upon the orders of the lower authorities.

We have carefully considered the rival submissions and have perused the orders of the authorities below as well as the material placed before us. The first issue which falls for our consideration is whether the learned CIT(A) was justified in dismissing the appeal once again on the ground of delay in filing the first appeal. From the records placed before us, it is evident that the Coordinate Bench of the Tribunal, in the assessee’s own case for the very same assessment year, vide

Once the Tribunal had exercised its appellate jurisdiction and had condoned the delay while restoring the matter to the learned CIT(A), the issue relating to limitation attained finality and ceased to remain open for reconsideration by the first appellate authority. The learned CIT(A), being bound by the directions contained in the order of the Coordinate Bench, could not have ignored the same and once again dismissed the appeal on the identical ground of delay. Such an approach, in our considered opinion, reflects a complete non application of mind to the earlier binding order of the Tribunal and defeats the very purpose for which the matter had been restored. The impugned order, therefore, cannot be sustained on this preliminary ground itself.

Coming to the merits of the additions, we find that the first adjustment relates to disallowance of employees’ contribution to provident fund amounting to Rs.43,63,303/- under section

Insofar as the remaining adjustments are concerned, namely disallowance of Rs.1,45,30,465/- under section 43B, Rs.24,85,571/- under section 40A(7) and Rs.1,20,00,000/- under section 40(a)(ia), we find considerable force in the contention advanced on behalf of the assessee that these amounts had already been disallowed by it suo motu while computing the taxable income in the return of income itself. The detailed submissions placed before the authorities below, copies whereof have also been brought to our notice, indicate that while computing the business income the assessee had itself added back these amounts and, therefore, the adjustments made by CPC under section 143(1) have allegedly resulted in duplication of the very same

Since the aforesaid contention requires verification from the computation of income, return of income and other relevant records, we deem it appropriate, in the interest of justice, to restore this limited issue to the file of the Assessing Officer. The Assessing Officer shall verify whether the amounts of Rs.1,45,30,465/-, Rs.24,85,571/- and Rs.1,20,00,000/- have already been voluntarily disallowed by the assessee while computing its total income. If upon such verification it is found that these amounts have already been added back in the return of income, then no further adjustment under section 143(1) shall survive in respect thereof and the consequential double disallowance shall be deleted. Needless to mention, the Assessing Officer shall afford reasonable opportunity of hearing to the assessee and thereafter decide the issue in accordance with law.