SHRI VISHWAMITRA SHIKSHAN SAMITI,INDORE vs. INCOME TAX OFFICER 5(1), INDORE

आदेश / O R D E R

Per B.M. Biyani, A.M.:

Feeling aggrieved by appeal-order dated 10.11.2023 passed by learned Commissioner of Income-tax (Appeal)-Addl./JCIT(A)-12, Mumbai [“CIT(A)”] which in turn arises out of intimation dated 03.11.2021 passed by CPC, Bangalore [“AO”] u/s 143(1) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2020-21, the assessee has filed this appeal on following grounds:

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Vishwamitra Shikshan Samiti, Indore ITA No. 40/Ind/2024 Assessment Year : 2020-21

(1) The intimation u/s 143(1) is bad in law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled. (2) The Ld. CIT(A) was not justified in confirming the intimation u/s 143(1), which is bad in law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled. (3) The Ld. CIT(A) was not justified in confirming the addition of Rs. 69,32,340/- in the return income of the assessee without considering the facts and circumstances of the case.

records perused.

this appeal. Ld. AR for assessee submitted that the assessee has filed an

application for condonation of delay supported by an affidavit on stamp. On

perusal, we observe that the assessee is a charitable society engaged in

imparting education and the reason of delayed filing was such that the

President of assessee-society was out of city at the relevant time and

therefore the appeal-papers could not be signed. It is further submitted that

the appeal was filed in time on 08.01.2024 without any delay. Ld. AR very

humbly submitted that there is no deliberate lethargy, negligence, mala fide

intention or ulterior motive of assessee in making delay and the assessee

does not stand to derive any benefit because of delay. Ld. DR for Revenue

did not raise any objection considering small delay of just 2 days and the

fair explanation made by assessee. We have considered the explanation

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advanced by assessee and in absence of any contrary fact or material on

record, the assessee is found to have a sufficient cause for delay in filing

present appeal. We find that section 253(5) of the Act empowers the ITAT to

admit an appeal after expiry of prescribed time, if there is a sufficient cause

for not presenting appeal within prescribed time. It is also a settled position

by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji

and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial

justice and technical considerations are opposed to each other, the cause of

substantial justice must be preferred by adopting a justice-oriented

approach. Thus, taking into account the provision of section 253(5) and the

decision of Hon’ble Supreme Court, we take a judicious view, condone delay,

admit appeal and proceed with hearing.

in grounds regarding illegalities in the assessment made by AO, during the

course of hearing the Ld. AR for assessee did not make submissions qua

illegalities. His only endeavour was that a disallowance of Rs. 69,32,346/-

made by AO u/s 37(1) based on audit-report (Form No. 3CD) was not valid

on merit and accordingly we confine our adjudication to the pleadings made

before us.

impugned disallowance has been made by AO on account of ‘inconsistency

in the amount not allowable u/s 37 claimed in return in Schedule OI and the

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audit report’. Then, he carried us to Page No. 71 of Paper-Book to show that

the auditors have reported “Bank Guarantee against FDR – Rs. 69,32,346/-”

in Clause No. 21(g) of audit-report which requires reporting of “Particulars of

any liability of a contingent nature”. From this reporting of auditors, the AO

picked a figure for disallowance u/s 37(1) but the fact is that the assessee

has not claimed any such deduction in P&L A/c. Ld. AR drew us to the

audited P&L A/c filed at Page 85 of the Paper-Book and the figures of P&L

A/c reported by assessee in ITR at Page 13 of the Paper-Book, in an attempt

to show that there is no item of Rs. 69,32,346/- having been claimed by

assessee. While arguing Ld. AR insisted very forcefully that the auditors

have made a wrong reporting in Clause No. 21(g) of audit-report when the

assessee has not made any such claim of deduction. Ultimately, Ld. AR

submitted that when the assessee has not claimed impugned sum as

deduction, there was no justification in making disallowance by AO,

therefore the same must be deleted.

have made a clear-cut reporting and it cannot be said, without any evidence,

that such reporting was wrong. He proposed and contended that the matter

may be remanded to Jurisdictional AO for factual verification and

adjudication afresh.

documents held on record including the orders of lower-authorities. We find

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that the AO has made impugned addition taking into account the reporting

made by auditors in audit report (Form No. 3CD). During first-appeal, the

assessee has not made any representation before CIT(A) which has led the

CIT(A) to pass an ex-parte order and upheld the addition made by AO on the

basis of material available with him. Before us, the Ld. AR is harping on the

point that there is a reporting mistake by auditors in audit-report and Ld.

AR also carried us to P&L A/c or the portion of ITR, as mentioned above, to

show that there is no item of Rs. 69,32,346/- debited in P&L. Apparently,

there is no item of exact amount of Rs. 69,32,346/- appearing to the debit of

P&L A/c but we find that there are debit entries to P&L A/c exceeding this

amount under some broad heads. For example, the amounts debited to P&L

A/c under these heads are _______. Therefore, it cannot be said with

certainty that the assessee would have not clubbed this amount in such

heads. Therefore, in the situation, we cannot make any conclusive finding

on either side. If there is a wrong reporting by auditors or if the auditors

have filed a general information of ‘contingent liability’ even if the assessee

has not claimed the same as deduction, the assessee could very well file a

certificate of auditors clarifying such factual aspect but it is not done. Our

adjudication requires a conclusive finding that the assessee has not claimed

impugned deduction but from the available documents, we are unable to

arrive at such a conclusion. Therefore, in the situation, we agree with Ld.

DR’s proposal to send this matter back to the file of Jurisdictional AO for

adjudication afresh. This would enable the assessee to file either auditors’

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clarificatory certificate or any other evidence as the assessee deems fit and

appropriate to satisfy the AO that the impugned sum was not claimed as

deduction. Needless to mention that the AO shall give necessary opportunity

to assessee and also consider assessee’s submission properly without being

influenced by earlier order. The assessee shall also make a proper

representation failing which the AO shall be at liberty to take appropriate

decision in accordance with law.

Order pronounced in the open court on 26.07.2024

Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक /Dated :26.07.2024 CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY

Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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