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Facts
The assessee paid professional charges for software development which were disallowed by the AO as bogus expenses due to lack of documentary evidence. The CIT(A) confirmed the disallowance, holding that the assessee failed to establish the genuineness of the transactions.
Held
The Tribunal admitted the signed copy of the contracts as additional evidence, noting that the failure to submit them earlier was due to inadvertent mistakes during online filing. The matter was remitted to the AO for fresh examination.
Key Issues
Whether the assessee could submit signed contract documents as additional evidence before the Tribunal and if the matter should be remanded for re-examination.
Sections Cited
194J, 143(2), 142(1), 133(6), 250, 29
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Income Tax Appellate Tribunal, ‘G’ BENCH
आदेश / O R D E R PER VIKRAM SINGH YADAV (A.M): This appeal has been preferred against the impugned order dated 07.08.2024 passed in Appeal no. NFAC/2020- 21/10211401 by the Ld. Commissioner of Income–tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income-Tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment year [A.Y.] 2021-22, wherein the limited ground of appeal leads to
1. 2. Briefly the facts of the case are that the assessee filed its return of income on 16.02.2002, declaring total income of Rs. 25,60,150/-. The case of the assessee was selected for scrutiny through CASS to examine large payment made u/s. 194J to persons who have not filed return of income. Thereafter, notices u/s. 143(2) and 142(1) were issued and thereafter after issue of show-cause, an addition of Rs. 56,25,000/- was made by the AO. As per the AO the assessee has failed to furnish any documentary evidence to substantiate and support the genuineness of the expenses and therefore the expenses cannot be accepted as true and genuine and were treated as bogus expenses and brought to tax in the hands of the assessee company.
Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A). During the appellant proceeding, it was submitted that the assessee was awarded a contract by ICICI Bank for implementation and customisation for MCMC wallet solution and the assessee was required to create a software within the stipulated time frame and for the purposes, the assessee hired the services of the IT professionals having requisite technical competency and experience and in support, copy of the invoices, ledger account, Form 16, bank statements were submitted. The submissions so filed by the assessee were Symphony Technoventures Pvt. Ltd. considered by the Ld. CIT(A) and as per ld CIT(A), from the perusal of the assessment order, it is noticed that the AO has specifically asked the assessee to furnish the details of the return of income filed by these persons, however the same were not furnished and even in response to notices u/s. 133(6), there was no response from this parties. It was further observed by the Ld. CIT(A) that the appellant has not paid the full amount to Mr. Rajesh Biju Kumar, Mr. Abhidat Arunkumar Fale, and Mr. Chetan Keluskar as against the amount which has been claimed by the assessee. It was further observed by the Ld. CIT(A) that the assessee has furnished unsigned copy of the software agreement entered into with this persons during the course of appellate proceedings and the assessee was asked to furnish the signed copy of the said agreements, however, there was no compliance on the part of the assessee. The Ld. CIT(A) accordingly held that the assessee has not made the complete payment to said professionals during the financial year relevant to impugned assessment year and has also not submitted the signed copy of the agreements entered with them and therefore he was of the opinion that the appellant couldn’t establish the genuineness of the said transactions and the disallowance made by the AO was confirmed.
Against the said findings and directions of the Ld. CIT(A), the assessee is in appeal before us. During the course of hearing, the Ld. AR submitted that the assessee has moved an application for submission of additional evidence under Rule 29 of the Symphony Technoventures Pvt. Ltd. Income tax Rules wherein it seeks permission to submit signed copy of contract entered into with Rajesh Biju Kumar Sunder, Singal Abhishek Kantilal, Abhidat Arunkumar Fale, Hemchandra Sudheer Mishra. It was submitted that during the proceedings before the lower authorities, the soft copies of these documents got uploaded in place of uploading the scanned copy of the original signed documents and this mistake was inadvertent in nature and occurred during online filing of documents. It was submitted that these documents are of considerable importance to explain the claim of the assessee company and therefore in interest of justice, same be allowed to be produced before this Tribunal as additional evidence under Rule 29 of the Income tax Rules and the matter may be remitted for necessary examination and verification.
The Ld. DR is heard who has submitted that the assessee was granted sufficient opportunity by the AO and as well as by the Ld. CIT(A) to produce the signed copy of these documents and since the assesses has failed to submit the same, the prayer so made by the assessee doesn’t deserve to be accepted.
We have heard the rival contentions and perused the material available on record. We find that it a matter of record that the assessee has duly furnished the unsigned copy of the contracts entered into with aforesaid persons before the Ld. CIT(A). Before us, the ld AR has explained the reasons as to why the signed copy of the contracts could not be submitted earlier Symphony Technoventures Pvt. Ltd. due to inadvertent mistakes while uploading the documents on the IT portal. We therefore find that these are in essence not the additional documentation/evidences in strictest of the terms and are the contracts which are already available on records and it is only the duly executed copy of the contracts which the assessee wishes to place on record. In light of the same and considering the fact that the same are critical and germane to the issue of examination of the claim of the assessee in support of the professional charges paid to these persons, we are of the considered view that these documents deserve to be admitted and the same are hereby admitted and the matter is remitted to the file of the Ld. AO to examine the same and taking the same into consideration, to decide the matter afresh as per law, after providing reasonable opportunity to the assessee.
In light of the same, we donot deem it necessary to examine the merits of the case and the other contentions so raised in support thereof and the same are left open.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in open court on 19.03.2025.