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Facts
The assessee challenged the CIT(A)'s confirmation of a disallowance of Rs. 13,33,78,587/- under section 36(1)(va) of the Income-tax Act, 1961. While conceding that the main issue of disallowance is covered against them by the Supreme Court's decision, the assessee argued that there were errors in the due dates reported in the tax audit report and sought verification.
Held
The Tribunal acknowledged that the disallowance under section 36(1)(va) is settled against the assessee by the Supreme Court's ruling. However, for a limited purpose verification of the due dates mentioned in the tax audit report versus the actual due dates, the issue was restored to the file of the Assessing Officer. The AO is empowered to rectify the order if errors in due dates are found.
Key Issues
Whether the disallowance under section 36(1)(va) is valid despite the Supreme Court ruling, and whether errors in the reporting of due dates in the tax audit report warrant verification by the Assessing Officer.
Sections Cited
Section 36(1)(va)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI KUL BHARAT
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order dated 25.01.2023 by the NFAC, Delhi pertaining to A.Y 2019-20.
The solitary grievance of the assessee is that the CIT(A) /NFAC erred in confirming the disallowance of Rs. 13,33,78,587/- u/s 36(1)(va) of the Income-tax Act, 1961 [the Act, for short].
Before us, the ld. counsel for the assessee fairly conceded that this issue is squarely covered in favour of the revenue and against the assessee by the decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt Ltd 448 ITR 518.
However, the ld. counsel for the assessee stated that there are some errors in the reporting by the auditors in so far as the due date mentioned in the tax audit report is concerned. It is the say of the ld. counsel for the assessee that the due date mentioned in the tax audit report is not correct and furnished a chart to buttress his submission.
After giving thoughtful consideration, we deem it fit to restore the issue for limited purpose verification of due dates as mentioned in the audit report and the actual due dates to be furnished by the assessee. It is made clear that only for verification of dates the issue is restored to the file of the Assessing Officer. If the Assessing Officer finds some error in the due dates, he may rectify his order.
But, principally, the quarrel has been settled in favour of the Revenue and against the assessee by the decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt Ltd [supra]. For limited verification, the appeal is allowed for statistical purposes.
In the result, the appeal of the assessee in is allowed for statistical purposes.
The order is pronounced in the open court on 13.02.2024.
[KUL BHARAT] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 13th FEBRUARY, 2024 VL/