PREM CHAND SINGH,CHATRA vs. PR.CIT, DHANBAD

The present appeal has been preferred by the assessee against an order dated 28.02.2024 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).

Brief facts of the case are that the assessee is a company and filed its return of income for the assessment year 2018-19 declaring total income of Rs.73,21,980/-. The case of the was selected for scrutiny and the Assessing Officer completed the assessment u/s 143(3) of the Act assessing total income of the assessee at Rs.84,67,210/-. During the assessment proceedings, the Assessing Officer pointed out that the tax audit report has identified that the assessee paid its directors a sum of Rs.11,36,000/- as bonus or commission which was otherwise payable as profits or dividend and this amount was covered by section 36(1)(ii) of the Act. The Assessing Officer disallowed the claim of commission as claimed by the assessee.

Dissatisfied with the above order, the assessee went in appeal before the ld. CIT(A) wherein the assessee stated that Rs.11,36,000/- was wrongly fed in form no.3CD in serial no.20(1) as regards bonus or commission paid to an employees for serves rendered, where such sum was otherwise payable to him as profits or dividends as per section 36(1)(ii) of the Act and the said sum is not a part of profits or dividends as stated in section 36(1)(ii) of the Act. The assessee also filed certificate from the tax auditor during the appellate proceedings. However, the contention of the assessee was not considered nor remitted back the issue to the file of the Assessing Officer for verification of facts and the ld. CIT(A) dismissed the appeal of the assessee by simply upholding the order of the Assessing Officer.