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Facts
The assessee company filed its return of income and the CPC processed it under section 143(1), making an addition of Rs. 22,13,604/- for bonus paid, as per Section 36(1)(ii). The assessee claimed this was a mistake in the tax audit report (Form No. 3CD) and a revised report was filed showing it under Section 43B.
Held
The Tribunal noted that the CPC had granted relief through a rectification order, but the CIT(A) had dismissed the appeal. The Tribunal decided to remand the matter back to the Assessing Officer (AO) to verify if the bonus payments were made before the due date under Section 43B.
Key Issues
Whether the bonus payment, initially reported incorrectly, qualifies for deduction under Section 43B if paid before the due date, and the discrepancy between CPC's rectification and CIT(A)'s dismissal.
Sections Cited
250, 36(1)(ii), 143(1), 139(1), 43B
AI-generated summary — verify with the full judgment below
सुनवाई की तारीख/Date of Hearing : 25/03/2025 उदघोषणा की तारीख/Date of Pronouncement : 27/03/2025 आदेश/Order PER LALIET KUMAR, J.M:
This is an appeal filed by the Assessee against the order of the Ld CIT, Appeal ADDUJCIT(A)-2, Jaipur dt. 30/07/2024 pertaining the Assessment Year 2021-22.
In the present appeal Assessee has raised the following grounds:
1. That the order dated 30.07.2024, under section 250 of the Income Tax Act, 1961 passed by the Ld. Commissioner of Income Tax (Appeals)/Addl./JCIT (A)-2, Jaipur in DIN & Order No. ITBA/APL S/250/2024- 25/1067152885 (1) is contrary to law and facts of the case.
2. That in the facts and circumstances of the case, Ld. Commissioner of Income Tax, (Appeals)/Addl./JCIT (A)-2, Jaipur gravelly erred in upholding the disallowance of Rs. 22,13,604/-made by the Id. Assistant Director of Income Tax, CPC. Bengaluru on account of bonus paid by the appellant under Section 36(1)(ii) of the Income Tax Act, 1961.
3. That in the facts and circumstances of the case Ld. Commissioner of Income Tax, (Appeals)/Addl./JCIT (A)-2, Jaipur gravelly erred in upholding the addition of Rs. 22,13,604/-without application of mind to the facts of the case.
That the appellant craves to add, amend or alter any ground of appeal
before or at the time of hearing of appeal, with the permission of the Hon'ble Income Tax Appellate Tribunal, Chandigarh.
3. Briefly the facts of the case are that the assessee is a Limited Company and has filed its return of income on 29.01.2022 declaring total income of Rs.2,10,32,676/-. The CPC has processed the return of income u/s 143(1) on 30.09.2022 and made an addition of Rs.22,13.604/- u/s 36(1)(ii) of the Income Tax Act, 1961. The assessee has stated that the amount of Rs.22,13,604/- pertains to the bonus paid by the appellant company and further states that the Chartered Accountant of the assessee company by mistake reported the amount of bonus paid at Rs. 22,13,604/- in column No. 20(a) [any sum paid to an employee as bonus or commission for services rendered, where such sum was otherwise payable to him as profits or dividend {Section 36(1)00}] of Form No. 3CD whereas the same should have been reported at point No. 2603(0 paid on or before the due date for furnishing the return of income of the previous year under section 139(1)] Serial No. 9 of Form No. 3CD which is regarding the amount paid under section 43B of the I.T. Act before the due date of filing of income tax return. Further, the appellant had filed a revised tax audit report showing the corrected details.
4. Against the order of the Ld. AO the assessee went in appeal before the Ld. CIT(A). who has since dismissed the appeal of the Assessee.
5. Against the order of the Ld. CIT(A), the assessee is in appeal before us.
The assessee had filed the Audit Report and in Column No. 20(a) of the said Audit Report, the figure of bonus paid were wrongly mentioned. The intimation was processed by the CPC under section 143(1), thereafter the Auditor had revised the Tax Audit Report thereby showing the amount of Rs. 22,13,604/- in Column 26B(a), and amount is allowable under section 43B of the Act.
6.1 On the basis of the revised Tax Audit Report, CPC has rectified the intimation earlier issued and passed the order accordingly on 16/05/2023. Thereby making a tax demand against the assessee.
6.2 Feeling aggrieved by the intimation order under 143(1) the assessee simultaneously preferred the appeal before the Ld. CIT(A) and the Ld. CIT(A), vide impugned order dt. 30/07/2024 has dismissed the ground raised by the assessee in para 5.1 of his order wherein it was held as under:
5.1 Ground No. 2 and 3 are interconnected and related to disallowance of Rs.22,13,604/- u/s 36(1)(ii). Hence, the same are being adjudicated together as under: - The payment of bonus is allowable under section 43B of the IT Act 1961, if paid before the due date of filing of ITR u/s 139(1). During the course of appellate proceedings, the appellant had only once replied to the notices issued and have stated that the chartered accountant of the appellant have incorrectly shown the said figure of bonus paid under column 20(a) of the audit report and after the intimation u/s 143(1), the said mistake have been corrected and revised tax audit report has been filed wherein the said sum of Rs. 22,13,604/- have been shown at column no 26B(a) which is allowable u/s 43B. The appellant has filed the revised tax audit report which is dated 18.02.2023. Considering the facts of the case and in absence of bonus payment details, which is the main issue in this appeal, and non- compliance from the appellant to the further notices issued, I find no adversity in the order of CPC A.O. Thus, ground no. 2 and 3 are dismissed accordingly.
The Ld. AR had submitted that since rectification order has already been passed by the CPC granting relief to the assessee, therefore the findings given by the Ld. CIT(A) are required to be rectify accordingly.
Per contra, the Ld DR, had submitted, the Ld. CIT(A) in order dt. 30/07/2024 has not granted the relief to the assessee, as the assessee failed to provide the details of the payment of bonus paid before the due date. In rebuttal the Ld. AR had submitted that all the details of payment of bonus before due date of filing and the remaining payment have already been provided also filed before the Tribunal.
We have heard the rival contentions and perused the material available on record. In the present case, the issue raised by the assessee has already been adjudicated by the Centralized Processing Center (CPC) through a rectification order, granting relief to the assessee. However, a inconguratory situation has arisen wherein the Ld. CIT(A) dismissed the assessee’s appeal whereas the CPC had granted the same relief to the assessee.
In view of the above, it would be in the interest of both parties, that matter be remand back to the file of the Jurisdictional Assessing Officer (JAO) with a direction to verify whether the bonus payments were made by the assessee before the due date specified under the parent Act. On verification, if it is found that such payments were indeed made before the due date, the AO shall grant the assessee relief under Section 43B of the Act. Needless to say the above exercise shall be carried out by JAO after affording the opportunity to the assessee and following the principle of natural justice.
In the result, appeal of the Assessee is allowed for statistical purposes.