JILA SAHAKARI KENDRIYA BANK MARYADIT,KHARGONE vs. THE INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE DELHI, DELHI

आदेश / O R D E R

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

Feeling aggrieved by appeal-order dated 08.02.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of rectification-order dated 05.07.2023 passed by learned CPC [“AO”] u/s 154 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2021-22, the assessee has filed this appeal on the grounds mentioned in Form No. 36 (Appeal Memo).

Jila Sahakari Kendriya Bank Mydt., Khargone ITA No. 179/Ind/2024– AY 2021-22 3. Ld. AR for assessee carried us to the impugned order passed by CIT(A)

which also narrates the factual background of case and decision of CIT(A);

the same is re-produced below:

“4. CIT’s decision :

All the grounds of appeal are clubbed together for the sake of convenience and disposed as under : 4.1 The appellant has filed the return of income for A.Y. 2021-22 on 09.03.2022 declaring a total income of Rs. 22,50,11,180/-. The CPC processed the return u/s 143(1) of the Income-tax Act, 1961 on 26.12.2022 by making addition of Rs. 13,26,71,110/- u/s 37(1) of the Income-tax Act, 1961. Thereafter, the appellant filed a rectification application u/s 154 on 05.07.2023 before the CPC which has been rejected by the CPC and passed the order on 05.07.2023. The appellant has challenged the order u/s 154 in the present appeal. 4.2 In this case, the CPC had had made addition of Rs. 13,26,71,110/- u/s 37(1) of the Income-tax Act, 1961 during the year under consideration while processing the return u/s 143(1). The appellant could have filed an appeal against the intimation u/s 143(1) as per the provisions of the Act. However, it appears that the appellant has not filed an appeal against the intimation u/s 143(1). Thereafter, the appellant has filed an application u/s 154 before the CPC which has been rejected and hence the appellant has filed the present appeal against the order u/s 154. In this regard, it is stated that the original cause of action in the present case had arisen at the stage of the proceedings u/s 143(1) and not u/s 154. The appellant is trying to make a back door entry by filing an appeal against the order u/s 154, the original cause of action for which had arisen at an earlier point of time during the proceedings u/s 143(1). Therefore, as the original cause of action has arisen at the stage of 143(1), the issue cannot be adjudicated upon in the present appeal and further there is no mistake apparent from record at the stage of 154. Therefore, the grounds of appeal are dismissed. 5. In the result, appeal is dismissed.” 4. Thereafter, Ld. AR made two-fold submissions as under:

(i) That the AO has made addition of Rs. 13,26,71,110/- u/s 37(1) by

picking a figure of Rs. 13,26,71,110/- reported by auditors of assessee in

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Jila Sahakari Kendriya Bank Mydt., Khargone ITA No. 179/Ind/2024– AY 2021-22 Clause 21(g) of audit-report in Form No. 3CD (Page 91 of Paper-Book) which

reads thus:

“21(g). Particulars of any liability of a contingent nature: 1. Disputed Income-tax payable – Rs. 13,26,71,110/-”.

But this reporting by auditors is a mistake. Ld. AR submitted that there is

no debit entry of Rs. 13,26,71,110/- in assessee’s P&L A/c. There is,

however, a debit entry of Rs. 6,25,00,000/- in the P&L A/c (Page 121 of

Paper-Book) with the caption “Income-tax payable” which the assessee has

already disallowed while computing taxable income and also reported in

“Entry No. 55 – Provisions for tax and appropriations” section of Income-tax

Return (Page 16 of Paper-Book). Thus, the impugned addition of Rs.

13,26,71,110/- has trigged only because of incorrect reporting by the

auditors in Form No. 3CD but the fact remains that there is no such item

debited/claimed by assessee in P&L A/c as deduction and therefore the

addition deserves to be deleted.

(ii) That the CIT(A) has dismissed asessee’s appeal on a technical reason

that the assessee has not filed appeal against the intimation u/s 143(1) in

which the impugned disallowance was originally made by AO. According to

CIT(A), the assessee has gone into rectification u/s 154 and thereafter filed

appeal against order u/s 154 which is not acceptable. However, this

technical issue raised by CIT(A) is already settled in favour of assessee by

this very bench in the case of ITA 29/Ind/2024 Nancy Ann Miller

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Jila Sahakari Kendriya Bank Mydt., Khargone ITA No. 179/Ind/2024– AY 2021-22 Educational Trust Vs. Income-tax Officer, Ward-Exemption, Indore.

Therefore, the assessee deserves benefit of decision.

proposed to remand this matter to the AO for factual verification.

(i) On perusal of audit-report (Form 3CD), it is clearly discernible that

the auditors have made the reporting as narrated in earlier paragraph. We

agree that no addition can be made to assessee’s income if the auditors have

made a mistake in reporting but the assessee has not debited/claimed any

such item in P&L A/c.

(ii) So far as the point raised by CIT(A) that the assessee ought to have

appealed against the intimation u/s 143(1) and not against rectification-

order u/s 154 is concerned, a similar dispute has already been settled by

this very bench in ITA 29/Ind/2024 Nancy Ann Miller Educational

Trust Vs. Income-tax Officer, Ward-Exemption, Indore; the relevant

paras of order are as under:

“10(iii) The third and last point raised by CIT(A) is such that the assessee ought to have appealed against the intimation u/s 143(1) and not against rectification-order u/s 154. A similar dispute was decided by ITAT, Jodhpur in Akbar Mohammad Vs. CPC ITA No. 108 & 109/Jodh/2021 order dated 31.01.2022 wherein it was held thus:

“6.0 We have considered the submission of both the parties and perused the material available on record. In the present cases, it is not

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Jila Sahakari Kendriya Bank Mydt., Khargone ITA No. 179/Ind/2024– AY 2021-22 in dispute that the assessee deposited the contribution of PF & ESI belatedly in terms of section 36(1)(va) of the Act. However, the said deposits were made prior to filing of return of income u/s 139(1) of the Act.

6.1 Of course, it is a case in point that the assessee did not file any appeal against the intimations passed us 143(1) of the Act and the Ld. Sr. DR is right to the extent that the assessee cannot be given relief for that reason. However, it is also a settled law that the assessee cannot be taxed on an amount on which tax is not legally imposable. Although, the assessee might have chosen a wrong channel for redressal of his grievance, all the same, it is incumbent upon the Tax authorities to burden the assessee only with correct amount of tax and not to unjustly benefit at the cost of tax payer. Therefore, in the interest of substantial justice, we deem it expedient to restore the issue to the file of the Assessing officer with a direction to pass appropriate orders deleting the addition / disallowance after duly considering the settled judicial position in this regard, which have been decided in the three cases as enumerated above in Para 5.”

the assessee has not debited/claimed in P&L A/c as deduction. However,

the Ld. DR for revenue is very much correct in submitting that the matter

should be remanded to the AO for verification. Hence, we remand this

matter back to the file of AO for necessary factual verification and thereafter

delete the addition if he is satisfied that the assessee has not

debited/claimed the impugned sum in P&L A/c as deduction. Ordered

accordingly.

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Jila Sahakari Kendriya Bank Mydt., Khargone ITA No. 179/Ind/2024– AY 2021-22 8. Resultantly, this appeal is allowed for statistical purpose.

Order pronounced in open court on 28.06.2024.

Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक /Dated : 28.06.2024. 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 Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore

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