M/s A.P. Knit Fab, Bawa Colony, Ludhiana V. DCIT CC-3, Ludhiana

ITA 529/CHANDI/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7674 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Appeal Filed On: 27-06-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA DHAR
• Section: 54; 6; 43

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ I N T H E I N C O M E T A X A P P E L L A T E T R I B U N A L D I V I S I O N B E N C H , ‘ A ’ , C H A N D I G A R H B E F O R E SH R I A . D . J A I N , V I C E P R E S I D E N T & SH R I V I K R A M S I N G H Y A D A V , A C C O U N T A N T M E M B E R आयकर अपील सं./ ITA No. 5 2 9 / C H D / 2 0 2 2 नधा रण वष / Assessment Year : 2 0 2 0 - 2 1 M/s A.P Knit Fab, Bawa Colony, Bahadur Ke Road, Ludhiana Vs. बनाम The Asstt. Director of Income Tax, CPC Bangaluru थायी लेखा सं./PAN NO: AAUFA3235B अपीलाथ /Appellant यथ /Respondent Hearing through video Conferencing नधा रती क ओर से/Assessee by : Sh. Sudhir Sehgal, Advocate. राज व क ओर से/ Revenue by : Smt. Priyanka Dhar, Sr.DR स ु नवाई क तार%ख/Date of Hearing : 12.09.2022 उदघोषणा क तार%ख/Date of Pronouncement : 13.09.2022 आदेश/Order Per A.D. Jain, Vice President: Th i s i s a n a pp ea l b y t he a ss e s se e a ga i ns t t h e or de r da t e d 30 . 05. 2 02 2 o f t h e L d. Co m m is s i o n e r o f In c o m e Ta x ( App e a ls )-5 , L u dh i an a [ he r e i n r e fe rr e d t o a s ‘C I T( A )’ ], fo r a s se s s me n t ye a r 20 20- 21 . 2. Th e fo ll o w i n g g ro un d s h a v e b ee n r a i se d b y t he a sse ss e e i n t h i s a pp e a l : - 1. That the Ld. CIT(A) has erred in confirming the addition on account of disallowance of Rs. 17,19,015/- on account of bonus payable which was mistakenly mentioned by the Chartered Accountant while filing the Tax Audit Report in the wrong column, the same had been paid within time as per law. 2 2. That the finding of the Ld. CIT(A) in confirming the addition of Rs. 17,19,015/-as made by the CPC, Bangalore is against the actual facts & circumstances. 3. That the appellant craves leave to add, amend any ground or grounds of appeal before the appeal is finally heard or disposed. 3. Th e b r i e f fa c t s o f t he c a se a re t h a t t h e a ss e s see i s a n i nd i v i d u a l c ar ry in g o n t h e bu s in e ss o f m a n u fa c t ur i ng an d t ra ding o f H osi e ry g o od s, Y a rn an d K ni t t ed cl o th i n t he na m e a n d st y l e o f M / s A . P. H osi e r y In d u s tr i e s. It h a d fi l e d i ts r et u rn o f i n c o me fo r the y e ar u n d e r c on s i d e r a t i o n o n 2 4. 1 2. 20 20 a t a n in c o me o f Rs. 3 3 ,20, 8 70/ -. T h e c op y o f A c k no w l e d g e m e nt a s w e l l C o mp ut a ti on o f in co me , f or m i n g p a r t o f pa p e r b o ok a t P g 1 - 4 w as p l a c ed o n fi l e. Th e r et u rn o f t h e a s se ss ee w a s pr o c e ss ed u / s 1 43 (1) o f t h e A c t a nd i n c o m e w a s a ssess e d a t R s. 50 , 67, 8 70 / - w h e re i n , th e fol l ow i ng a d d i t i o n s w er e ma de by t h e A O : - a) D i sa l l ow a nc e u / s 3 6( 1 )( ii i ) o f t he A ct t o t h e t u ne o f R s. 1, 1 90/ - b) A d di t i o n u / s 3 6 (1 ) (v a ) o f th e A c t to t h e t u ne o f Rs. 2 67 9 6/ - c) A d di t i o n u / s 3 6 (1 ) (i i ) o f t h e A ct t o t h e t un e o f Rs. 17 , 19, 0 1 5/ - 4. A g a in st t he or d e r pa ss ed u / s 1 43( 1 ) o f th e A c t, t h e a s se ss e e pr e fe rre d a n a pp e a l b e f o re t h e C I T (A )- 5, Lu dh i a na an d ad di t i o n s / di s a l lo w a n c es ma d e a s a t S r . no . (a ) a nd ( b) a bo v e w e r e de l e te d by t h e L d. C IT (A ) , w h er ea s t h e a d d i t i o n m e nt i o ne d a t S r . N o . ( c) ha s b e e n c on f i r m ed . 3 5. Th e ba c k g r o un d o f su c h a d d it i o n w a s t ha t a t th e t i m e o f fi l i ng o f T ax A u di t R e p or t ( T A R) i n F or m B C D , t he C ha r t e re d Acc o u n t a nt o f t h e a ss e s se e , due t o i n a d v e r t e n t e r r o r, i n cl a u se 2 0( a) ( P g 9 o f P B) , h a d m e n t i o n e d t h e a m o un t o f b o n us pa i d a s p er t h e B on u s A c t, 19 6 5 t o t h e e mp l o ye e s t o t he t une o f R s. 1 7, 1 9 , 015 / - , w h i ch d e pi c t s t h a t t he s a i d bo nu s o f R s. 17, 1 9 , 01 5/ - h ad b e e n p a i d t o t h e e m ploy e e s a s p ro fi t or di v id en d. T h e co p y o f T A R i n F or m 3 CD i s f or m i n g part o f t h e a ss e s se e ’ s p ap e r b oo k a t P a ge s 5 - 1 9. I t h a s b e e n su b m i t t e d t ha t t o c l a r i f y t he si t u a t i on t h a t t h e b o n us i s n o t p a y a b l e t o e m pl oy e e s a s pr o f i t / di vi de n d , a c e r t i fi c at e f ro m th e C h a r t e r e d Ac co u nt a nt w a s a l s o fi l e d be fo re t h e L d. C I T (A ) b y t he as se sse e , w h e r e in , i t w a s c e r t i fi e d b y t he Cha r t e r e d A c c ou n t a n t t ha t du e t o i na d v e r t e n t e rr or, t he a mo un t o f bo nu s h a s b e e n w r on gl y sh o w n i n c l a u se 20 (a ) o f t he Ta x A ud it Re po r t . A c op y o f t h e c e r t i fi c a t e f ro m C h a rt e r e d A c c o un t a n t is f o r m in g p a r t o f t he p a p e r b oo k , a t p a g e 5 2 . E v e n t h e do cu me nt s i n t h e sh a p e o f de t a i l s o f b o n us p a i d a n d bo nu s re gi st e r fo r t h e F .Y . 20 1 9- 20, d u l y si g n e d b y t he e m p l oy ee s e v i d e n c i ng t he p a y m e nt o f bo nu s b e f or e d u e da t e o f r et ur n w as al s o fi l e d w i t h t h e CI T( A ) a n d the sa m e a re fo r mi n g pa r t o f t he p a pe r b oo k, a t p a g e s 53 & 5 4 – 9 5, r esp ec t i ve ly . H o w e v er , t he Ld . CI T (A ) w a s o f t he op i n i o n t h a t a n y mo d i fi c ati o n in t h e A u di t Re po r t v i a f il i n g o f c er ti f ic a t e i s no t a l l ow e d a n d, t he re for e , t h e di s a l lo w a n c e o f R s. 1 7, 19 , 01 5 / - , a s ma d e b y t h e CP C, w a s co n fi r me d b y t he C I T ( A ). 4 6. Be for e u s, t he Ld . c ou ns e l fo r t he a s s ess e e h as c o n t e n d e d t h a t t he a ss e s se e ha s pa i d b on us o f Rs. 17, 1 9, 01 5/ - a s p e r t he B on us A c t , 1 9 65 t o t he e m p l oye e s d ur i n g th e ye a r un de r co ns i d e ra t i on. A d at e w i s e ch ar t o f bo n u s pa i d t o e mp l o ye e s i s f or m i ng p a r t o f t h e pa p e r b o ok at pa ge 5 3 . A l l t he pa y m e n t w er e m a de b e for e t h e d u e d a t e o f f il i n g o f r e t ur n o f i nc o m e , i . e. , 24. 1 2. 20 2 0. H ow e v e r, du e t o i na dv e r t en t e r r o r, th e Ch ar t er ed A c c o u nt a nt m e n t i on e d t h e sai d a m o u nt u nd er cl a us e 2 0 (a ) o f t he T A R i. e . " a m o un t pa y a b l e to e m pl o y e es as b on us o r c om m i ss i o n wh er e su ch s um w as o t h er w i se p ay ab l e t o h im a s P r ofit s o r D i vi d e n d " w hi c h i s no t t he c as e o f t h e a ss e s se e in fa ct . T h e A u di t o r tr i e d t o r e c t i fy hi s m i st a k e b y fi li ng a c e r t i f ic a t e, w h er ei n , it h as be en me n ti o n e d t h a t t he p ar t i c ul a r s h a d w r on gl y b e e n m en t i o n e d i n c la use 2 0( a) o f t h e TA R du e t o a n i n ad ve r t e nt er ro r a n d, t he r e fo re , no d isa l l ow a nc e u / s 3 6 ( 1 ) ( ii ) o f t he I . T . A c t i s c a l l e d for on t h i s i ssu e . T he re f or e , i t w a s m er e l y a c l e r i c a l e r r o r a nd t h e s a m e s h o ul d be vi e w e d i n t h e l i g h t o f t he e v i d e n c e on re c o rd , w hi ch d e pi c t s t h a t t h e p a y m e nt ha s be e n m a d e t o l a b o u re r s un de r t h e P a y m en t o f Bo nu s A c t a n d c l a u se 2 0 (a ), w he r e i n, i n a d ve r t e n t re p or t i ng ha s b e e n m a d e by t h e C ha rt e re d A c c o u n t a nt, i s n ot a pp l ic a b l e i n t h e ca se o f t h e a sse ss ee . It i s t r i te t ha t t h e asse ss ee s ho ul d n o t s u ffe r on a c c o u nt o f t h e m i st a ke w h i c h ha s be e n m ad e by t he c ou nse l / a u di t or o f t h e a s se s se e . 7. A n a p p li c a ti on h as b e e n f il e d, fo r a d m i ss io n o f a d di t i o n a l e vi de nc e i n t h e sh a pe o f a r e v i s e d T a x A u d i t Re po rt f ro m t h e sa m e Ch ar t er ed A cc ou nt a nt . Th e sa m e i s f or m i n g p a rt o f th e p ap e r b oo k, a t 5 pa g e s 2 0 - 51. It i s su b mi t te d t h a t t he sa i d e v i d e nc e g oe s to t he r oo t o f t he ma t te r , a s th e s a me i s a v i t al pi e c e o f e vi de n ce , w h i c h g o e s t o p ro v e t he c a s e o f t h e a s s ess e e a nd , t h e r e fo r e , th e a b ov e Re vi s e d A ud i t re po r t m a y b e a d m i tt e d a s a d d i t i on al e vi de n c e b y t h e I T A T i n vi e w o f t he j ud g me n t o f t he H o n ' bl e S u pr e m e Co u rt i n t he c a s e of T e k Ra m (D e a d) T hr o u g h L Rs V / s C o mm i ss i o ne r o f I n c o me T a x, 35 7 I T R 1 3 3 (S C) , a nd t he j ud g m en t o f H o n ' bl e j u r i s di c t i o n a l H ig h C o ur t in t h e ca s e o f M u k t a M e ta l W o r k s, 3 36 IT R 55 5 ( P &H ) . I n t h e s e j u dg me n t s, t h e H o n ' b l e S up re m e Co u r t a n d t he j u r i s di c t io na l P unj a b & H ar ya na H i g h C ou r t ha v e he l d t h a t w h e r e t he a dd i t i on al ev id e nc e i s m u st f o r a j us t d e c i si on o f t he c a s e , t he sa m e d es e r v e s t o be a d m i t t e d. I t i s m a i n ta i n e d t h a t t h e e vi de nc e now b ei ng te n d e r e d c l e a rl y i s a ve r y v i t a l p i e ce o f e v i d e nc e. 8. O n t he ot he r ha nd , th e L d. D R s t ro ngl y p l a c ed rel i a n ce o n t h e i mp u gn e d or de r. 9. H a v in g h e a r d b o t h t h e p a r t i es an d h a v i ng p e r us e d t he m a t e r i a l on re c or d, w e fi n d t h a t i t w a s d ue t o a n i n ad ve rt e n t er ro r o f t he C . A . o f t h e a ss e s se e , t ha t h e ( t h e C A ) m en ti on e d t he a m o un t o f bo n u s p a i d t o e mp l o ye e s, u nd e r c l a us e 2 0( a) o f t he Ta x A ud i t Re por t , i. e . , “a m ou n t pa y a b le t o t h e e m p l oy ee s as bo nu s or c o m mi s si on w h er e su c h su m w a s ot h er w i se pa ya bl e t o h i m a s P r o fi ts or D i vi d en d” wh e r e a s , t he p a y m e n t ha d a c t u a l l y be e n ma de t o l a b o u re r s u n d er th e Pa y ment o f Bo n u s A c t . T hi s i n a d v e r t e n t m i st a k e w a s t r i e d t o be r e c t i fi e d b y t h e C. A . by fi l i ng c er t i f i c a t e (A BP p a g e 52 ) a lo ng w i t h d e t a i l s (A BP - 53) . T he s a m e w a s, ho w e v e r, no t a c c e p t e d. 6 10 . Th e r e v i s ed T a x A ud i t R e p o rt ( A BP pa v e 2 0 – 5 1 ), w e fi n d , i s a vi t a l p i ec e o f ev i d e n c e a n d i t re qu i re s t o be a d mi tt e d a s a d d i t io na l e vi de nc e , si nc e i t w ou l d be n e c e ss a r y fo r a j u st a n d p r o pe r d e c i si o n o f t he m a t t e r. A c c o r di n gl y , t he a p pl i c at i on fo r ad di tio n a l ev i d e nc e i s a l l o w ed a n d t h e r e vi s e d T a x A u d i t R e po rt ( A BP p a g e s 20 - 51 ) i s t a k e n on r ec o r d. Th e ma t t er i s, ac c or d i ng l y, re m it t e d t o t he f i l e o f t he A O , t o be d ec i d e d a f r e s h i n ac c o r d a n c e w it h la w , on t a k i n g i n to c on si d e r a t i o n t he a fo re sa i d r e v i s e d T a x A u d i t Re p o rt , a n d a ft e r aff o rd i ng d u e a n d a de qu at e o p po rt un i t y o f he ar i ng t o t he a sse ss e e. T he a s se sse e, no d ou bt , sha l l co op e r a t e in th e f re sh p r oc e e d i n gs b e f o r e t he A O . O rde r e d a cc o r di ng l y. 11 . In t he r e su l t, fo r st a t i st i c a l p u r po se s , t he a pp ea l o f t h e a s se s se e i s t re a t e d a s a l l o w ed . O r de r p ro n o u n c e d on 1 3. 09 . 2 02 2. Sd/- Sd/- (VIKRAM SINGH YADAV) ( A.D. JAIN ) Accountant Member Vice President Dated : 13.09.2022 “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 आय ु 2त/ CIT 4. आयकर आय ु 2त (अपील)/ The CIT(A) 5. -वभागीय त न7ध, आयकर अपील%य आ7धकरण, च9डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar 7