M/S PUNJAB SMALL INDUSTRIES AND EXPORTS CORPORATION LTD.,CHANDIGARH vs. DCIT/ACIT, CIRCLE 2(1), CHANDIGARH
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Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘B’, CHANDIGARH
Before: SHRI A.D. JAIN & DR KRINWANT SAHAY
आदेश/Order Per Dr. Krinwant Sahay, A.M.:
Appeal in this case has been filed by the Assessee against the order dated 27.05.2022 of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi on the following Grounds:
That the order dated 27.05.2022 passed under section 250 by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi in
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Appeal No .ITBA/NFAC/S/250/2022-23/1043203841 (1) is contrary to law and facts of the case.
(a) That in the facts and circumstances of the case, ld. Commissioner of Income Tax (Appeals) gravely erred in upholding the disallowance of bonus of Rs. 76,75,100/- made by the ld. Assessing Officer by resorting to the provisions of Section 43 B of the Income Tax Act, 1961.
(b). Without prejudice to the above ground, payment of bonus of Rs. 76,75,100/- may kindly be allowed in the Assessment Year 2019-20.
That in the presence of documentary evidence regarding exempt dividend income of Rs. 40,000/-, ld. Commissioner of Income Tax (Appeals) gravelly erred in setting aside the issue for verification to the ld. Assessing Officer.
Appeal on Ground No. 1 is general in nature.
Appeal on Ground No. 2 is against the disallowance of Rs. 76,75,100/- on payment made for bonus invoking the provisions of section 43B of the Income Tax Act, 1961 (in short 'the Act').
Brief facts of the case are that the Assessee is a limited company wholly owned by the Government of Punjab which derived income as a Nodal Agency for the State and Central Govt. to help the entrepreneurs in the State to set up new industries. The original return was filed on 18.10.2018 declaring an income of Rs.
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8,91,51,910/-. Thereafter, revised return was filed on 30.03.2019 declaring an income of Rs. 20,48,35,290/-. The return was e-filed and the Audited Report in Form No. 3CA/3CD was duly submitted online. Subsequent to that, intimation order under Section 143(1) of the Income Tax Act, 1961 was received vide Communication No. CPC/1819/A6/I919451476 wherein, following additions were made by the Id. Deputy Commissioner of Income Tax, CPC, Bangalore: -
Addition of Rs. 76,75,100/- on the ground that amount of bonus not paid prior to the date of filing of the return as the same is not covered by the provisions of Section 43B of the Income Tax Act, 1961. 2. Addition of 40,000/- which has been shown, under the head exempt income.
The ld. CIT(A) has given his finding in para 4.2, as under: -
“4.2 Ground 2 This pertains of disallowance of bonus and Rs.76 75,100/- by CPC u/s 43B of the Act. The Appellant has objected to this disallowance on the ground that the payment is not covered under section 43B of the Act. The Appellant has further placed reliance on the decision of Hon'ble Supreme Court in the case of Shasun Chemicals and Drugs Ltd vs CIT , 289 CTR 97(SC).
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I have considered the submissions of the Appellant. The undisputed facts in the case are that the revised return of income has been filed on 30/03/2019. Bonus of Rs.76,75,100/- has been paid in November 2018 i.e. F.Y.2018-19 (A.Y.2019-20). As per section 43B(c), the payments in the nature bonus are allowable in the year of actual payment. However, proviso to the said section provides that the deduction can be allowed if the assessee has paid the bonus amount on or before the date of filing return u/s 139(1) of the Act in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return. In the present case, the Appellant has not paid the amount of bonus on or before the due date of filing the return of AY 2018-19 i.e. 31/10/2018 (extended due date). This bonus amount of Rs.76,75,100/- has been paid by the Appellant in November 2018 i.e. after the due date of filing the return u/s 139(1) for A.Y.2018-19. Thus, CPC is justified in disallowing the amount of Rs.76,75,100/- claimed by the Appellant as tax deductible in A.Y.2018-19 since the same is covered by the provisions of section 43B of the Act. As regards, reliance placed by the Appellant on the decision of Hon'ble Supreme Court in the case of Shasun Chemicals and Drugs Ltd vs CIT, 289 CTR 97(SC), I find that the facts of the case is distinguishable from the facts of the Appellant and therefore, findings of the said decision cannot be applied in the case of the Appellant. In view of the above discussion, I uphold the disallowance of Rs.76,75,100/- made by CPC u/s 43B of the Act. The ground is, therefore, dismissed.”
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During the proceedings before us, the ld. Counsel for the Assessee filed a written submission on this issue which is as under: -
“Ground No. 2 This Ground of appeal is not pressed.”
The ld. DR relied on the order of CIT(A).
As the Counsel of the Assessee has not pressed this Ground for adjudication, accordingly, appeal on this Ground is dismissed as ‘not pressed’.
Appeal on Ground No. 3 is against the disallowance of exempt dividend income of Rs. 40,000/-. The ld. CIT(A) in his order has discussed this issue as under:-
“4.3. Ground 3 This ground pertains to addition of Rs. 40,000/- to the income of the Appellant. The Appellant has objected to the same stating that this amount received by the Appellant is in the nature of dividend income and therefore, has been claimed as exempt in the return. This being a factual issue, the Appellant is directed to furnish online all relevant details in this regard before the AO who will verify the same. If the contention of the appellant is found correct, the addition of Rs. 40,000/- by CPC stands deleted. If found contrary, the addition stands
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upheld. The A.O. is directed to pass a speaking order while giving to this order. The ground is therefore, allowed for statistical purpose.”
The ld. Counsel has filed a written submission on this issue as under:-
“Ground No. 3
This ground of appeal is regarding the exempt dividend income of Rs. 40,000/-. Relevant Page No. 7. Para No. 4.3 of the CIT(A) order is reproduced below:-
“This ground pertains to addition of Rs. 40,000/- to the income of the Appellant. The Appellant has objected to the same stating that this amount received by the Appellant is in the nature of dividend income and therefore, has been claimed as exempt in the return. This being a factual issue, the Appellant is directed to furnish online all relevant details in this regard before the AO who will verify the same. If the contention of the appellant is found correct, the addition of Rs. 40,000/- by CPC stands deleted. If found contrary, the addition stands upheld. The A.O. is directed to pass a speaking order while giving to this order. The ground is therefore, allowed for statistical purpose.” The Hon'ble CIT(A) observed that this being a factual issue, the appellant was directed to furnish all
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relevant details in this regard before the Id. Assessing Officer who will verify the same. The Ld Commissioner of Income lax (Appeals), had directed the appellant to file the details online whereas there is no provision on the portal to file online submissions of documents to the assessing officer, till the proceedings are not pending or open, as such it is not possible for the appellant to upload the details. It is further submitted that during the relevant assessment year as per provisions of Section 10(34) read with Section 1I5BBPA the dividend income upto Rs. 10,00,000/- was exempt from tax. The appellant had received merely petty amount of Rs. 40,000/- as dividend and the law as such is unambiguous, as such the Id. Commissioner of Income Tax (Appeals) should have deleted the addition. It is humbly prayed that addition of Rs. 40,000/- may kindly be deleted.”
The ld. DR relied on the order of the CIT(A).
We have considered the findings of the ld. CIT(A) on this issue and we have also considered the written submissions filed by the Assessee. The ld. CIT(A) has directed the Assessing Officer to verify the claim of the Assessee and has already allowed the appeal on this issue for statistical purposes, therefore we are of the opinion that we need not adjudicate this issue again. The ld. CIT(A) may verify the outcome of verification made by the Assessing Officer and decide the
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appeal of the Assessee accordingly. Therefore, for this limited purpose, on this issue, the case is remanded back to CIT(A).
In the result, the appeal of the Assessee is partly allowed.
Order pronounced on 27 .06.2024
Sd/- Sd/- ( A.D. JAIN ) (DR KRINWANT SAHAY) Vice President Accountant Member “आर.के.” आदेश क� ��त�ल�प अ�े�षत / Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar
