Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, KOLKATA BENCH ‘B’, KOLKATA
Before: Dr. Manish Borad & Shri Sonjoy Sarma]
ORDER
Per Sonjoy Sarma, JM:
This appeal of the assessee for the assessment year 2018-19 is directed against the order dated 18.09.2023 passed by the ld. Commissioner of Income-tax, Appeals, NFAC, Delhi [hereinafter referred to as ‘the ‘ld. CIT(A)’]. The assessee has raised the following grounds of appeal:
i. For that the ld. CIT(A) erred in confirming the action of the AO of passing rectification order when there was no mistake apparent from record. ii. For that the ld. CIT(A) erred in confirming the action of AO in making addition of the sum of Rs. 26,12,500/- under the head income from other sources when the same was donation paid which was already disallowed without granting deductions under chapter VIA i.e., Sl. No. 13 while computing the total income u/s 143(3) and therefore further addition will amount to double addition more so that the same can never be income of the assessee from other sources. iii. For that even otherwise the rectification order passed without considering the reply of the assessee was bad in law and is liable to be quashed.
Mayank Bansal 2. Brief facts of the case are that in the case of assessee assessment order passed u/s 143(3) r.w.s. 144B of the I.T. Act, 1961 vide order dated 22.09.2021 assessing the income of rs. 132,78,52,550/- calculating tax liability of Rs. 47,16,55,197/-. Further it was brought to the notice of AO that while framing the assessment order he has disallowed a sum of Rs. 26,12,500/- in respect of deduction claimed u/s 80G of the Act by the assessee. However, while computing the total income of the assessee he has omitted to make the said addition of Rs. 26,12,500/- in the hands of assessee. Since mistake was apparent from the record, accordingly the ld. AO rectified the mistake by making an addition of Rs. 26,12,500/- in the hands of assessee vide order dated 26.12.2022.
Aggrieved by the above order assessee went into appeal before the ld. CIT(A) where the appeal of the assessee was dismissed.
Dissatisfied with the above order, assessee is in appeal before the Tribunal raising multiple grounds of appeal. However, the main grievance of the assessee is in relation with confirming the action of the AO by sustaining the addition of Rs. 26,12,500/- under the head income from other sources as and when it was already disallowed by ld. AO without granting deduction under Chapter VIA i.e. Sl. No. 13 while computing the total income of the assessee u/s 143(3) of the Act. Therefore, further addition will amount to double addition in the hands of assessee which is against the law.
5. At the time of hearing, the ld. AR of the assessee submitted before the bench that while framing the assessment order, the ld. AO has disallowed deduction to the extent of Rs. 26,12,500/- and Mayank Bansal only the balance amount of Rs. 10,000/- was allowed. However, on perusal of the computation sheet, the ld. AO has clearly stated in Sl. No. 13 that deduction under Chapter VIA has been allowed at nil. Therefore, the ld. AO allowed deduction of Rs. 10,000/- only to the assessee while passing the assessment order and has failed to consider while computing the tax liability of the assessee as nil. Therefore, the alleged fact disallowance of Rs. 26,12,500/- was omitted in computation of income of the assessee is not correct. Further, the ld. AO has disallowed Rs. 10,000/- while computing the tax liability of the assessee. The ld. AR in order to substantiate his claim brought to our notice the relevant portion of the assessment order para 6.1 to 6.3 and computation sheet placed before us. The relevant portion which are extracted below: “The assessee has claimed Donation u/s 80G at Rs. 26,12,500/- (being 50% of Rs. 52,25.001). During assessment proceedings, the assessee was required to produce the receipts of said donations. 6.2 The perusal of receipts submitted by assessee shows that it has paid a lump-sum amount of Rs. 51,00,000/- to Pilar of Light by NEFT, and further several small amounts have been paid to same party. The receipt dated 15.03.2018 for the said donation is prepared in a very casual manner, as even date of NEFT & bank from which it is made is not mentioned. Also, it appears that till 31.03.2017, the assessee's capital was at meager Rs. 1.03 lakhs and hence it is highly unlikely that the assessee would give such large sum as any genuine donation to a single party. It appears to be nothing but just a tax saving tool, whereby cash is received back against the amount paid. 6.3 The assessee was issued a draft assessment order cum show cause on 22.06.2021 whereby the entire deduction claimed u/s 80G of Rs. 26,12,500/- was proposed to be disallowed and added back to total income of the assessee and penalty proceedings u/s 270A was also proposed to be initiated separately for mis-reporting of income. The assessee was asked as to why the proposed variation should not be made.
Mayank Bansal 6. From the above, it is crystal clear that the ld. AO while framing the assessment order itself disallowed sum of Rs. 26,12,500/- in the hands of assessee. Therefore, the rectification order passed by the AO is uncalled for. Accordingly, he prayed before the bench that the impugned order passed by the ld. CIT(A) by sustaining the disallowance of Rs. 26,12,500/- made by the AO is not correct which will in turn double addition in the hands of assessee. Therefore, the impugned order needs to be quashed by this Tribunal.
On the other hand, ld. DR supported the action of the AO.
We after hearing the submissions of both the parties and perused the material available on record find that the ld. AO in the body of the order clearly stated about the disallowance of entire deduction claimed u/s 80G of the Act of Rs. 26,12,500/- at page 41 para 6.3 . Similarly in the computation sheet at page no. 3, sl. No. 13 the total deduction under Chapter VIA figure also shown as nil that means no deduction was allowed to the assessee while framing the assessment order by the AO. In the present situation if rectification order remains to be sustained there would be double addition in the hands of assessee. We, therefore, feel it necessary to quash the impugned order passed by the ld. CIT(A) with the direction to the AO to delete the alleged addition of Rs. 26,12,500/- made in terms of rectification order dated 26.12.2022 passed u/s 154 of the Act. In terms of the above, the appeal of the assessee is allowed.
Mayank Bansal 10. In the result, the appeal of the assessee is allowed.