The Tharad Taluka Ishabgul Utpadak Purchase Sales and Con. Society Ltd., Tharad V. The Income Tax Officer, Ward-1, Palanpur

ITA 167/AHD/2023

AI Insights

The case involves The Tharad Taluka Ishabgul Utpadak Purchase Sales & Con. Society Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The appeal contested the addition of Rs. 5,83,614 to the assessee's income, which was upheld by the CIT(A). The assessee argued that the addition was unjustified as it pertained to a clerical error in the tax return forms, where expenses were disallowed in one column but added back in another, leading to a double entry. The tribunal acknowledged the clerical error and directed a re-examination of the entries by the Assessing Officer.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299920 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 27-06-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 15-03-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Condonation of delay
• Section: 2; 143(3); 142(1); 80P; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . N o . 1 6 7/ A h d /2 0 2 3 ( A s se ss m e nt Y e a r : 20 18- 19 ) The T ha r a d Ta l uk a I sh ab g u l Ut p ad ak P ur ch as e S a le s & C o n. So c . Lt d. , At. 2 , A r b u da M a r k et, O pp . G u nj B az ar , Th a r a d, D is t . B an as ka nt ha Gu j ar a t-3 85 5 6 5 V s . I nc o me Ta x O f f ic er , War d - 1 , Pa l an p u r [ P AN N o. A A BA T7 6 7 8 K ] (Appellant) .. (Respondent) Appellant by : Shri S. N. Divatia & Shri Samir Vora, A.Rs. Respondent by : Shri Ramesh Kumar, Sr. D.R. D a t e of H ea r i ng 05.07.2023 D a t e of P r o no u n ce me nt 07.07.2023 O R D E R The appeal filed by the assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi on 17.03.2022 for A.Y. 2018-19. 2. The grounds of appeal raised by the assessee are as under: “1.1 The order passed by U/s.250 on 17.03.2022 by NFAC [CIT(A)], Delhi upholding the addition of Rs.5,83,614/- made by A.O. is wholly illegal, unlawful and against the principles of natural justice. 2.1 The ld. NFAC [CIT(A)], has grievously erred in law and or on facts in upholding the addition of Rs. 5,83,614/-. 3.1 The ld. NFAC[CIT(A)] has failed to appreciate that the appellant had not claimed exemption u/s 80P to the extent of Rs.6,35,677/- but restricted to the gross income of Rs.52,063/- and therefore, the disallowance of balance Rs.5,83,614/- is wholly unjustified on facts and in law. 3.2 That the in the fats and circumstances of the ld. NFAC ought not to have upheld the addition of Rs.5,83,614/-. ITA No. 167/Ahd/2023 The Tharad Taluka Ishabgul Utpadak Purchase Sales & Con. Society Ltd. vs. ITO Asst.Year–2018-19 - 2 - It is, therefore, prayed that the addition of Rs.5,83,614/- upheld by the NFAC[CIT(A)] may kindly be deleted.” 3. The assessee society an AOP filed its return of income for A.Y. 2018-19 in ITR-5 on 31.10.2018 showing total income as NIL. The assessee filed revised return in ITR-5 ON 13.07.2019 showing the same total income. The case was selected for scrutiny under Section 143(3). The return was processed under Section 143(1)(a) on 13.05.2019 on the total raising a demand of Rs. 1,37,530/-. The case was selected for limited scrutiny for verification of issues alongwith the reason as expenditure of personal nature (Reason) mismatch in expenditure of personal nature reported in Audit Report and ITR. The return was selected for scrutiny through CASS subsequently statutory notices under Section 143(2) and under Section 142(1) of the Income Tax Act, 1961 were issued respectively and duly served upon the assessee through ITBA module. In response to the above notices under Section 143(2) and Section 142(1) of the Act, 1961, assessee furnished / uploaded necessary details electronically. On perusal of submission filed by the assessee, no adverse view is taken in relation to issue of limited scrutiny reason on mismatch in expenditure of personal nature reported in Audit Report and ITR. However, it is found that income assessed by CPC under Section 143(1)(a) on Rs. 5,83,614/-. Therefore, the assessee contended that there is no reason to alter the processed income under Section 143(1)(a) performed by CPC. So the total income assessed under Section 143(3) is same as income under Section 143(1)(a) done by CPC is Rs. 5,83,614/- i.e. Rs. 5,83,610/-. Total income assessed under Section 143(3) is same as income shown in return. The assessee filed rectification on online mode on 13.07.2019 by correcting the particulars in ITA No. 167/Ahd/2023 The Tharad Taluka Ishabgul Utpadak Purchase Sales & Con. Society Ltd. vs. ITO Asst.Year–2018-19 - 3 - ITR Form, but rejected by CPC. The addition made by the Assessing Officer is only the particulars filed by the assessee are in wrong column. The disallowance made in the Audit Form 3CD are already disallowed in ITR Form but the column are differ. So the expense already disallowed and added back again in the computation shown which makes duplicate / double entry. 4. Being aggrieved by the assessment order assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee. 5. The Ld. A.R. submitted that the income assessed by CPC under Section 143(1)(a) is same as assessed under Section 143(3) and therefore, merely because there is a wrong entry in the column cannot be treated as addition to the income of the assessee. The Ld. A.R. further submitted that in the limited scrutiny for verification is on the very nature of mismatch in expenditure of personal nature. Thus, Assessing Officer admitted the same in the proceedings under Section 143(3) in the assessment order itself and therefore, the CIT(A) as well as the Assessing Officer should have rectified this said mismatch. 6. The Ld. D.R. relied upon the assessment order, rectification order and the order of the CIT(A). 7. There is a delay of 304 days in filing the present appeal for which the assessee has filed condonation of delay application. After going through the condonation of delay application it appears that the reason stated therein appears to be genuine. Hence, the delay is condoned. ITA No. 167/Ahd/2023 The Tharad Taluka Ishabgul Utpadak Purchase Sales & Con. Society Ltd. vs. ITO Asst.Year–2018-19 - 4 - 8. Heard both the parties and perused all the relevant material available on record. It is an admitted fact that the assessee has made certain wrong entries in a wrong column which is a mistake admitted by the assessee. For which the assessee has pointed out the same in the rectification application to the Assessing Officer. The Assessing Officer is also admitted that that is a wrong entry and that is why mismatch in expenditure of personal nature. Since it is an admitted fact it will be appropriate that the Assessing Officer will take into account the same and accordingly grant expenditure of personal nature after verifying the same. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice. 9. In result, the appeal filed by the assessee is partly allowed for statistical purpose. This Order pronounced in Open Court on 07/07/2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 07/07/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad