Binay Rambahal Singh, Surat V. Income Tax Officer, Ward- 2(3)(6), Surat

ITA 312/SRT/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2095 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-05-2024
• Assessment Year: 2020-2021
• Appeal Filed On: 21-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 154; 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 312/Srt/2024 (Assessment Year –2020-21) (Physical hearing) Binay Rambahal Singh, 112, Sankalp Row House Society, Ugat Canal Road, Jahangira Bagh, Near Prabhudarshan Society, Surat-395005. PAN No. AZYPS 7939 M Vs. I.T.O., Ward 2(3)(6), Surat. Appellant/ Assessee Respondent/ Revenue Assessee represented by Ms. Anchal Poddar, A.R.. Department represented by Shri J.K. Chandnani, Sr. DR. Appeal instituted on 22/03/2024 Date of hearing 27/05/2024 Date of pronouncement 29/05/2024 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), Addl/JCIT(A)-9, Mumbai [in short, the ld. CIT(A)] dated 10/02/2024 for the Assessment Year (AY) 2020-21. Following grounds of appeal have been raised by the assessee. “1. The learned Commissioner of Income Tax (Appeals) NFAC has erred in fact and law in upholding disallowance by CPC an amount of Rs. 1,83,433/- u/s 36(1)(va) without appreciating the fact and circumstances of the case. 2. The learned Commissioner of Income Tax (Appeals) NFAC has erred in fact and in law in not appreciating the fact that inadvertent typing error of date for 2 instances by the auditor in Form 3CB clause no. 20(b). The PF dues for Site- Essar for the month of May 2019, instead of 15/06/2019 wrongly typed as 15/06/2020 amounting to Rs. 83,628/- and June 2019, instead of 15/07/2019 wrongly typed as 15/07/2020 amounting to Rs. 99,805/-. 3. The learned Commissioner of Income Tax (Appeals) NFAC has erred in fact and in law in correctly verifying the claim of assessee but disregarding it completely on the pretext that auditor should have had rectified the audit report and corrected ITA No. 312/Srt/2024 Binay Rambahal Singh Vs ITO 2 the clerical mistake thereby penalising the assessee for mistake of auditor than giving justice. 4. The learned Commissioner of Income Tax (Appeals) NFAC has erred in fact and in law in upholding disallowance by CPC an amount of Rs.6,74,475 (Rs. 3,79,760/- as opening balance and Rs. 2,94,715 as incurred during the year) u/s 43B without appreciating the facts, circumstance and merits of the case. 5. The learned Commissioner of Income Tax (Appeals) NFAC has erred in fact and in law in not appreciating the fact that assessee has already disallowed Rs. 2,94,715 while computing tax for the year as per the computation of total income. 6. The learned Commissioner of Income Tax (Appeals) NFAC has erred in fact and in law in not appreciating the fact that professional tax amounting Rs 3,79,760/- was opening balance i.e. of A.Y 2019-20, and same was not debited to P&L Account for AY 2019-20, and hence the addition u/s 43B is bad in law. 7. The learned Commissioner of Income Tax (Appeals) NFAC has erred in fact and in law in correctly verifying the claim of assessee but disregarding it completely on the pretext that auditor should have had rectified the audit report and corrected the clerical mistake thereby penalising the assessee for mistake of auditor than giving justice. 8. The appellant craves leave to add/delete/ alter/ modify grounds which would be necessary for adjudication of the case." 2. Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that the assessee is running a proprietorship firm in the name of A&K Associates which is engaged in the business of providing manpower recruitment services to big business houses like TATA Steel Ltd., L&T Steel, Essar Steel India Ltd. etc. The assessee filed its return of income for A.Y. 2020-21 on 26/12/2020 declaring total income of Rs. 47,75,476/-. The return of income was processed by Central Processing Centre, Bangalore (C.P.C.)/Assessing Officer and while processing the return, the C.P.C. made adjustment/addition of Rs. 1,83,433/- under Section 36(1)(va) of the Income Tax Act, 1961 (in short, the Act). Such addition/adjustment was made as there was mistake in the audit report in clause 20(b) about the Employees’ Contribution of Provident Fund, though such contribution was deposited on 15/06/2019 and 15/07/2019, however, it was ITA No. 312/Srt/2024 Binay Rambahal Singh Vs ITO 3 mentioned (typed) as 15/06/2020 and 15/07/2020. Similarly there was another typographical mistake in clause 26(i)(B)(b) wherein unpaid professional tax amount was written as Rs. 6,74,457/- instead of Rs. 2,94,715/-. The ld. AR of the assessee invited our attention on copy of audit report in Form No. 3CD, a copy of which is placed on record wherein column/clause 20(b), the actual payment is typed as 15/06/2020 and 15/07/2020 in respect of payment due on 15/06/2019 and 15/07/2019 respectively. The ld. AR of the assessee submits that copy of challan of respective payment is placed on record alongwith bank details at page No. 89 and 96 of paper book showing the payment on 15/06/2019 and 15/07/2019 respectively. So far as typing error in clause 26(i)(B)(b) with regard to unpaid liability of professional tax is mentioned as Rs. 6,74,475/- instead of Rs. 2,94,715/-. The ld. AR of the assessee submits that in the computation of total income, the assessee has disallowed Rs. 2,94,715/- under Section 43B of the Act. The ld. AR of the assessee also shown us the details of professional tax of Rs. 2,94,715/- at page No. 111 of paper book and would submit that the expenses incurred in previous year and not paid on or before due date is actually is Rs. 2,94,715/- which has already been disallowed in computation of total income. The figure was wrongly mentioned at Rs. 6,74,475/-. The ld. CIT(A) confirmed the adjustment by holding that the assessee has not rectified the clerical mistake in the audit report with the support of affidavit of Tax Auditor and that there is no mistake in the order. The ld. AR of the assessee submits that once the time limit for uploading the rectified audit report is lapsed, the ITBA system will not permit such fresh uploading of corrected audit report, the remedy ITA No. 312/Srt/2024 Binay Rambahal Singh Vs ITO 4 is to approach the Assessing Officer under Section 154 of the Act for rectification of mistake apparent in the record. 3. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the orders of the lower authorities. The ld. CIT(A) after going through the details of payments of employee contribution of provident fund and unpaid likably of professional tax would submit that the assessee till date has not filed correct audit report either before the Assessing Officer or before the Tribunal in correcting the alleged clerical mistake. The assessee is not correcting his own mistake in the audit report and raising the plea about the mistake in the order passed by tax authorities. At the time of hearing, we directed the ld. AR of the assessee to place on record the correct updated audit report in Form 3CD alongwith copy of same to the office of ld. Sr. DR for the revenue. On our direction, the assessee has furnished correct/updated audit report showing the correct date and amount in column 20(b) as well as in clause 26(i)(B)(b). 4. We have considered the submissions of both the parties and have gone through the orders of the lower authorities carefully. We find that in the grounds No. 1 to 3 of appeal, the assessee has raised grievance about the typographical mistake about the deposits of contribution of Employees’ Provident Fund, of Rs. 83,628/- and of Rs. 99,805/- on 15/06/2019 and 15/07/2019 respectively, but, it was wrongly mentioned as 15/06/2020 and 15/07/2020 in their audit report. CPC while processing return of income disallowed both the contribution. On perusal of bank details and the respective challans, we find that such contribution was deposited well in time, however, there is typographical mistake in reporting such ITA No. 312/Srt/2024 Binay Rambahal Singh Vs ITO 5 contribution in the audit report. Therefore, we direct the Assessing Officer to cross verify the details of deposits of impugned contribution and allow relief to the assessee. So far as disallowance/adjustment under Section 43B of the Act with regard to unpaid professional tax is concerned, we find that as per the details on page No. 111 of paper book, the total unpaid professional tax amount is only Rs. 2,94,715/- which has already been disallowed by the assessee in his computation of total income, the same is wrongly typed as Rs. 6,74,475/-. Thus, the Assessing Officer is further directed to verify the details and allow relief to the assessee. In the result, grounds of appeal raised by the assessee are allowed. 5. In the result, this appeal of assessee is allowed. Order announced in open court on 29 th May, 2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 29/05/2024 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat