RAPID CARE TRANSCRIPTION PVT LTD,CHENNAI vs. DY CIT, CIRCLE 1, CHENNAI

आदेश / O R D E R PER AMITABH SHUKLA, A.M :

This appeal is filed against the order bearing DIN & Order No.ITBA/APL/S/250/2023-24/1059893685(1) dated 18.01.2024 of Ld.CIT(A). Through the aforesaid appeal the assesse has challenged order u/s 250 dated 18.01.2024 passed by Ld.CIT(A). 2.0 Brief facts of the case are that the assesse had filed its return of income on 30.11.2022 declaring total income of Rs.10,35,63,101/- for the AY 2022-23. The said return was processed u/s 143(1) of the Act on 21.02.2023 determining the total income at Rs. 10,57,87,210/- after making disallowance u/s 43B of the expenses of Rs.22,24,111/- claimed in respect of gratuity payment, as the entry did not reflect in the Tax Audit Report in Form No. 3CD furnished by the assesse. Aggrieved by the order the assesse preferred an appeal before the first appellate authority, who took the view that in clause 26 of the audit report the auditor certified that no payment of gratuity of Rs.2224111/-was made before the due date of filing of return. It was opined that such view is based upon examination of books of account and that any mistake therein ought to be certified by the tax auditor relying upon these facts as well as certain case laws, the Ld.CIT(A) proceeded to dismiss assessee’s appeal. 3.0 The Ld.AR argued that the claim of gratuity was made on payment basis and was rightly included in the books of account and shown in the income tax return. It was submitted that the gratuity payment of Rs.2224111/- was done prior to filing of return of income u/s 139(1). It was submitted that there was a typographical omission in tax audit report as a result of which the gratuity amount was shown as nil. It was further submitted that the said amount was rightly shown in the return of income in Item No.10B of the return of income and thus there was no intent on the part of assesse to conceal. It was submitted that the assesse has rightly included the said amount in its computation also. In support of its contentions, the assesse relied upon corresponding entries in its Books of accounts and order of coordinate bench of this tribunal in ITA No.82/Chny/2018-19. 4.0 The Ld.DR contended that the assesse and its auditors are different persons and the assesse cannot take benefit on account of auditor’s mistake. It was contended that the referred order of the coordinate bench does not come to the rescue of the assesse. It was considered that the assesse may be asked to file revised tax audit report. 5.0 We have heard rival submission in the light of facts of the case and material brought on records. There is no denying the fact that there is an omission in the tax audit report which has given rise to this controversy. It is also indicated that the gratuity of Rs.22,24,111/- was claimed on paid basis and shown in return of income filed u/s.139(1). In this regard, we respectfully concur with the findings of the coordinate bench in 19(Supra) holding that “ the deduction of gratuity is available in substantive law and it cannot be disallowed merely by the reference of inconsistent entries in explanation of section 143(a) of the Act being a procedural provision, it shall not take away the right confirmed in section 37 r.w.s 40A(7) and section 36(1)(v) of the Act…”. Accordingly, we are of the view that ends of justice would be met if the matter is restored to the file of the AO. The order of Ld.CIT(A) is therefore set aside and the Ld.AO is directed to examine the accounts of the assesse along with its return of income and in case it is found that the impugned amount of 4 -: gratuity has been included in the books of accounts / return of income and paid before filing of the return u/s. 139(1) then allow the assessee the claim of the said gratuity. 6.0 In the result the appeal of the assesse is partly allowed for statistical purposes. Order pronounced on 12th June, 2024 at Chennai.