KARIA REALTY,PUNE vs. ITO CIRCLE 7, PUNE, PUNE

This appeal at the instance of assessee pertaining to the Assessment Year 2021-22 is directed against the order dated 04.03.2025 of National Faceless Appeal Centre, Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the Intimation Order dated 02.11.2022 passed u/s.143(1)(a) of the Act.

When the case was called for, none appeared on behalf of the assessee despite service of notice of hearing. With the assistance of ld. Departmental Representative, I proceed to adjudicate the appeal.

Assessee has raised following grounds of appeal :

From perusal of the above grounds, I observe that the sole grievance of the assessee is that deduction for remuneration to partners at Rs.30.00 lakh has been denied for mentioning the amount under wrong head in the Tax Audit report which was for Inadmissible items rather than mentioning under Admissible Expenditure head for remuneration paid to partners allowable u/s.40(b) of the Act. I also observe that the order of ld.CIT(A) is exparte and has not dealt with merits of the case. Ld. Departmental Representative raised no objection if the matter is restored to the file of lower authorities for necessary adjudication.

I have heard the ld. Departmental Representative and perused the record placed before me. Assessee is a partnership firm and return of income for A.Y. 2021-22 e- filed on 14.03.2022 and the same has been processed u/s.143(1)(a) of the Act on 02.11.2022. In the order processed u/s.143(1)(a) of the Act, claim of the assessee for remuneration paid to partners at Rs.30.00 lakh has been denied. On perusal of the grounds as well as the statement of facts, it is stated that the Tax Auditor is required to report about the remuneration paid to partners whether the same is ‘admissible’ or ‘inadmissible’ as per the provisions of section 40(b) or 40(b)(a) in clause 21 of Tax Audit report. It is further claimed that while uploading the Tax Audit, the amount of admissible and allowable remuneration paid has been mistakenly reported in the column of ‘Inadmissible head’ in clause 22 whereas the same is ‘admissible’ as per provisions of section 40(b). Under the given facts and circumstances, in my considered view, issues raised in the instant appeal regarding allowability of expenditure for remuneration paid to partners deserves to be restored to the file of ld. Jurisdictional Assessing Officer before whom assessee shall furnish copy of partnership deed, copy of corrected Audit Report and also other details required for verifying the claim of remuneration paid to partners allowable u/s.40(b) of the Act and after duly considering the same ld. JAO shall decide the issue in accordance with law. Needless to mention that ld. JAO shall afford reasonable opportunity of hearing to the assessee. Grounds of appeal raised by the assessee are allowed for statistical purposes.

In the result, appeal of the assessee is allowed for statistical purposes.