GOURAV BHARGAVA,BHOPAL vs. ADDL/JCIT(A)-1 DELHI, DELHI

{
"clean_text": "आयकर अपीलीय अधिकरण, इंदौर न्यायपीठ, इंदौर\nIN THE INCOME TAX APPELLATE TRIBUNAL\nINDORE BENCH, INDORE\nBEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER\nAND\nSHRI PARESH M. JOSHI, JUDICIAL MEMBER\n\nGourav Bhargava\nITA No.235/Ind/2025\nAssessment Year:2023-24\nAddl/CIT(A)-1\nDelhi\n147, Karmaver Nagar,\nJK Road Bhel, Huzur\nBhopal Govindpura,\nS.O. Bhopal\nबनाम /\nVs.\n(Assessee/Appellant)\n(Revenue/Respondent)\nPAN: BEWPB4603P\nAssessee by Shri Aditya Chhajed, AR\nRevenue by Shri Sanjeev Bhagat, Sr. DR\nDate of Hearing 06.11.2025\nDate of Pronouncement 11.11.2025\nआदेश / ORDER\nPer B.M. Biyani, A.M.:\nFeeling aggrieved by order of first appeal dated 09.12.2024 passed by\nlearned Commissioner of Income-Tax (Appeals)-Addl/JCIT(A)-1, Delhi\n[“CIT(A)"] which in turn arises out of intimation of assessment dated\n29.01.2024 passed by learned CPC, Bengaluru ["AO"] u/s 143(1) of Income-\ntax Act, 1961 [“the Act"] for Assessment-Year [“AY”] 2023-24, the assessee\nhas filed this appeal.\nGourav Bhargava\nITA No. 235/Ind/2025 – AY 2023-24\n2.\nThe registry has informed that the present appeal is delayed by 23\ndays and therefore time-barred. Ld. AR for assessee submitted that the\nassessee has filed an application for condonation of delay supported by an\naffidavit of Divyanshi Rathore, an intern working under him. On perusal of\nthe application/affidavit, we observe that the delay is attributed to the time\ntaken in preparing case with accuracy. Ld. AR very humbly submitted that\nthere is no lethargy, negligence, mala fide intention or ulterior motive of\nassessee in making delay and the assessee does not stand to derive any\nbenefit because of delay. He further submitted that the sole reason of delay\nis as mentioned in the application/affidavit. He submitted that there is\n“sufficient cause\" for delay and hence the small delay should be condoned.\nLd. DR for Revenue left the matter to the wi om of Bench without raising\nany objection. We have considered the explanation advanced by assessee\nand in absence of any contrary fact or material on record, the assessee is\nfound to have a “sufficient cause” for delay in filing present appeal. We find\nthat section 253(5) of the Act empowers the ITAT to admit an appeal after\nexpiry of prescribed time, if there is a “sufficient cause” for not presenting\nappeal within prescribed time. It is also a settled position by Hon'ble\nSupreme Court in Collector, Land Acquisition Vs Mst. Katiji and others\n1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and\ntechnical considerations are opposed to each other, the cause of substantial\njustice must be preferred by adopting a justice-oriented approach. Thus,\ntaking into account the facts of case, the provision of section 253(5) and the\nGourav Bhargava\nITA No. 235/Ind/2025 – AY 2023-24\ndecision of Hon'ble Supreme Court, we take a judicious view, condone the\nsmall delay of 23 days, admit appeal and proceed with hearing.\n3. The background facts leading to present appeal are such that the\nassessee-individual filed his return of income of AY 2023-24 on 30.10.2023\nu/s 139(1) before due date of 31.10.2023 declaring a total income of Rs.\n40,17,574/-. The AO processed assessee's return through an intimation u/s\n143(1) after making certain additions/disallowances and determining total\nincome at Rs. 53,93,910/-. Aggrieved, the assessee carried matter in first-\nappeal but could not make representation. The CIT(A), therefore, dismissed\nfirst-appeal on account of non-prosecution. Now, the assessee has come\nbefore us in next appeal.\n4. The grounds raised by assessee are as under:\n“1.BECAUSE, the order passed by the learned Commissioner of 1\nIncome tax (Appeals) U/s 250 of the Income tax Act is bad in law and\nis liable to be quashed.\n2.BECAUSE, the no proper communication to the Appellant amount to\nviolation of Principles of Natural Justice and thus the impugned order\ndated 09.12.2024 is liable to be set aside at the very threshold.\n3.BECAUSE, the impugned order dated 09.12.2024 has been passed\nmerely on the ground of 'want to prosecution', and hence in view of the\nsame, due to the non-communication and thence no opportunity to file\na detailed reply along with the proof, the said impugned order dated\n09.12.2024 is liable to be set-aside.\n4.BECAUSE, the Appellant is non-operational since October 2023, and\nthe email IDs on record were not regularly monitored by employees,\nresulting in non-compliance with notices issued 4 by the Income Tax\nDepartment. Additionally, the accountant handling of the company left\nthe company during the proceedings, further contributing to the lack of\ntimely responses to the department's communications.\nGourav Bhargava\nITA No. 235/Ind/2025 – AY 2023-24\n5.BECAUSE, the learned Respondent erred in considering the fact that\nas per the Section 43B of the Act the payment actually made before the\ndue date of furnishing return is the date for consideration of\ndeductions under the Section. In the instant case, the Appellant after\nconsideration of the observations in the Tax Audit Report made actual\npayment of the Bonus before the due date of filing ITR and hence the\naforesaid is liable to deduction under Section 43B of the Act. Therefore,\nthe payment of Rs. 10,00,000/- ought to be allowed as deduction and\nthe addition may kindly be dropped accordingly.\n6.BECAUSE, the inconsistency in amount mentioned in return at SI No.\n5(d) of Part A OI \"Any other item of income\" as compared to amount\nmentioned in clause 16(d) of audit report of Rs. 86,682/- is illegal and\nbad in law, as the aforesaid is merely an error in the presentation and\nthere is no prejudice caused to the Revenue.\n7.BECAUSE, the various Other Income to the tune of Rs. 86,682/-was\nduly reflected in the Income Tax Return under the SCHEDULE OS -\nINCOME FROM OTHER SOURCES and the Income Tax on the same\nhas duly been paid, hence there is no prejudice caused to the Revenue\nDepartment. Further, an amount of Rs. 30,507/- was inclusive in the\nCapital Gain head, which is exempt from tax.\n8.BECAUSE, the order passed by the learned Commissioner of Income\ntax (Appeals) has erred in computing and confirming the charging\ninterest U/s 234B Rs.86,182/- & 234C Rs. 46,258/-respectively.\n9. That, with respect to the disallowance of Rs. 12,218/- under Section\n43B of the Act pertaining to the payment of Professional Tax for the FY\n2022-23, the same is rightfully disallowed in the Tax Audit Report and\nwrongfully allowed in the Income Tax Report, and therefore we admit\nthe disallowance of the same in the AY 2023-24.\n10. The Appellant craves, leave to add, amend, alter, modify or\nwithdraw any of the above grounds of appeal at the time of hearing.”\n5. During hearing before us, Ld. AR for assessee submitted that the\nassessee wants adjudication of only three Grounds i.e. Ground No. 5, 6 & 7.\nOther grounds raised by assessee are either general in nature or not being\npressed. The submission of Ld. AR is accepted and accordingly Ground\nNo. 1 to 4 & 8 to 10 are dismissed.\nGourav Bhargava\nITA No. 235/Ind/2025 – AY 2023-24\nGround No. 5:\n6. This ground relates to the disallowance of Rs. 10,00,000/- made by\nAO u/s 43B and confirmed by CIT(A).\n7. The necessary facts relevant to this issue ground are such that the AO\nmade a total disallowance of Rs. 10,12,218/- u/s 43B which has two\ncomponents, viz. (i) disallowance of outstanding bonus expenditure payable\nto employees Rs. 10,00,000/-, and (ii) disallowance of outstanding\nprofessional tax Rs. 12,218/-. The assessee has contested the second\ncomponent of outstanding professional tax of Rs. 12,218/- in Ground No. 9\nbut since the Ld. AR is not pressing that ground, the same stands already\ndismissed in earlier part of this order. Now, we are concerned only with the\nfirst component of outstanding bonus of Rs. 10,00,000/- payable to\nemployees.\n8. The assessee has claimed a deduction of Rs. 10,00,000/- on account\nof provision for bonus expenditure payable to employees in P&L A/c and\nshown the same as liability in Balance-Sheet as on 31.03.2023. In terms of\nclause (c) Section 43B r.w.s. 36(1)(ii) of the Act, the assessee would get\ndeduction of bonus expenditure only if the same was paid upto due date for\nfiling of return u/s 139(1) which was 31.10.2023 in present case. However,\nwhat has happened in present case is that the auditors of assessee prepared\nTax Audit Report in Form No. 3CD much earlier on 30.09.2023 and reported\n'Provision for bonus – Rs. 10,00,000/-′ against Clause No. 26(B)(b) [Copy of\nGourav Bhargava\nITA No. 235/Ind/2025 – AY 2023-24\nTax Audit Report is filed and relevant page is shown during hearing] since\nthe bonus was not paid by then. However, the assessee subsequently made\npayment of bonus to concerned employees on various dates during the\nperiod 04.10.2023 to 07.10.2023 before due date u/s 139(1) [i.e.\n31.10.2023]. Therefore, in this situation, we agree in principle that\ndisallowance u/s 43B is not attracted when the assessee has already made\npayment upto due date u/s 139(1) as per section 43B. However, the\nassessee has filed additional evidences in the form of (i) Statement of\nworking of bonus payable at Pages 225 to 226 of Paper-Book, (ii) Statement\nof datewise payments made to employees at Pages 70 to 72 of Paper-Book,\n(iii) Payment-Vouchers duly acknowledged by respective employees at Pages\n73 to 202 of Paper-Book, and (iv) a Confirmatory affidavit of auditors dated\n20.02.2025 at Page 229 of Paper-Book. Since these are additional evidences\nrequired to be verified by AO, we remand this ground to the file of AO for the\nlimited purpose of verification of assessee's evidences. The AO is directed to\nverify the evidences of assessee and delete the impugned disallowance as\nmay be after carrying out the exercise of verification. Accordingly, Ground\nNo. 5 is allowed for statistical purpose.\nGround No. 6 & 7:\n9. These grounds relate to the addition of Rs. 86,682/- made by AO on\naccount of other incomes and confirmed by CIT(A).\n10. Ld. AR for assessee firstly carried us to Clause No. 16(d) / Page No. 6\nof Tax Audit Report (Form No. 3CD) where the auditors have reported that\nthe assessee did not credit following incomes to P&L A/c:\n(d). any other item of income;\nSl. No.\nDescription\nAmount\n1\nInterest from Saving Bank\n2,027\n2\nInterest From Deposit\n7\n3\nInsurance Comission\n54,141\n4\nCapital Gain on Sale of Mutual Fund\n30,507\n(e). Capital receipt, if any.\n11. Ld. AR next carried us to following pages of ITR filed by assessee to\ndemonstrate that the assessee has already offered those incomes at\nrespective places under respective heads in ITR and paid tax:\nPage No. of\nPaper-Book\nWhere offered\nIncome offered in ITR\nHow offered\nAmount\n38\nSchedule CG Capital Gain\nEntry No. B(4)(i)\nFull value of consideration\n30,507\n44\nSchedule OS Income from\nInterest income\n2,034\nother sources – Entry No. 1(b)\n45\nSchedule OS Income from\nAny other income\n54,141\nother sources Entry No. 1(e)\nTotal\n86,682\n12. Thus, Ld. AR has successfully shown that the assessee has already\noffered the income of Rs. 86,682/- in ITR and paid tax. The Ld. DR for\nrevenue could not have any objection against submission of Ld. AR. Being\nso, we direct the AO to delete the addition of Rs. 86,682/- made by AO.\nAccordingly, Ground No. 6 & 7 are allowed.\n13. Resultantly, this appeal is partly allowed.\nOrder pronounced in open court on 11/11/2025\n \n \n(PARESH M. JOSHI)\nJUDICIAL MEMBER\n(B.M. BIYANI)\nACCOUNTANT MEMBER\nIndore\nदिनांक /Dated : 11/11/2025\nPatel/Sr. PS\nCopies to: (1) The appellant\n(2) The respondent\n(3) CIT\n(4) CIT(A)\n(5) Departmental Representative\n(6) Guard File\nBy order\nSr. Private Secretary\nIncome Tax Appellate Tribunal\nIndore Bench, Indore",
"summary": {
"facts": "The assessee filed an appeal against the order of the CIT(A) which upheld the assessment intimation. The appeal was initially dismissed for non-prosecution due to communication issues and the company's accountant leaving. The assessee requested condonation of delay, citing sufficient cause.",
"held": "The Tribunal condoned the delay, citing the 'sufficient cause' principle and the need for substantial justice. The Tribunal partly allowed the appeal, directing the deletion of an addition of Rs. 86,682/- relating to other incomes. Ground No. 5 regarding a bonus expenditure disallowance was remanded to the AO for verification.",
"result": "Partly Allowed",
"sections": [
"143(1)",
"253(5)",
"43B",
"36(1)(ii)",
"139(1)",
"234B",
"234C",
"250"
],
"issues": "Whether the delay in filing the appeal can be condoned due to sufficient cause? Whether the disallowance of bonus expenditure and additions on account of other incomes are justified?"
}
}