Sh. Ravinder Kumar Narang, Prop., Ludhiana V. The DCIT, CC-3, Ludhiana

ITA 60/CHANDI/2023

AI Insights

The case involves an appeal by Shri Ravinder Kumar Narang, the proprietor of M/s Raka Cycle Industries, against the order passed by the ld. Commissioner of Income Tax (Appeals) - 5, Ludhiana, which confirmed the addition of Rs. 10,48,691 made by the Assessing Officer. The addition was related to the non-payment or late payment of bonuses to employees for the assessment year 2018-19. The assessee contended that the bonus payments were made, but due to an inadvertent error, these were not reflected in the audit report in Form 3CD. During the appellate proceedings, a revised audit report was submitted, but the CIT (A) did not accept the revised report, leading to the current appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127873 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-08-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 12-02-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, “B” CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ITA No 60/CHD/2023 नधा रण वष / Assessment Year : 2018-19 Shri Ravinder Kumar Narang, Prop. M/s Raka Cycle Industries (Regd), 536/14, Opp. Dhandari Railway Station Ludhiana. Vs The DCIT, Central Circle-3, Ludhiana. थायीलेखासं./PAN NO: AATPN6866G अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by: Shri Sudhir Sehgal, Advocate राज व क ओर से/ Revenue by : Shri Dharam Vir, JCIT, Sr.DR स ु नवाई क तार"ख/Date of Hearing : 21.08.2023 उदघोषणा क तार"ख/Date of Pronouncement : 23.08.2023 आदेश/Order Per Sanjay Garg, Judicial Member: T h e p r e s e n t a p p e a l h a s b e e n p r e f e r r e d b y t h e a s s e ss e e a g a i n s t t h e o r d e r p a s s e d b y t h e l d . C o m m i s s i o n e r o f I n c o m e T a x ( A p p e a l s ) - 5 , L u d h i a n a [ h e r e i n a f t e r r e f e r r e d t o a s ‘ l d . C I T ( A ) ’ ] d a t e d 0 5 . 0 5 . 2 0 2 1 p e r t a i n i n g t o 2 0 1 8 - 1 9 a s s e s s m e n t y e a r . 2 . T h e a s s e s s e e i n t h i s a p p e a l h a s c o n t e s t e d t h e c o n f i r m a t i o n o f a d d i t i o n o f R s . 1 0 , 4 8 , 6 9 1 / - m a d e b y t h e A s s e s s i n g O f f i c e r ( i n s h o r t ‘ t h e A O ’ ) o n a c c o u n t of n o n - ITA No.60/CHD/2023 A.Y. 2018-19 2 p a y m e n t / l a t e p a y m e n t o f b o n u s t o e m p l o y e e s . 3 . A t t h e o u t s e t , t h e l d . C o u n s e l f o r t h e a s s e s s e e h a s s u b m i t t e d t h a t t h e r e w a s a n i n a d v e r t e n t e r r o r c o m m it t e d b y t h e A u d i t o r i n t h e A u d i t R e p o r t i n F o r m 3 C D , w h e r e by , t h e a f o r e s a i d p a y m e n t o f b o n u s t o t h e e m p l o y e e s w a s n o t r e f l e c t e d i n t h e R e p o r t . H o w e v e r , d u r i n g t h e a p p e l la t e p r o c e e d i n g s b e f o r e t h e l d . C I T ( A ) , a c e r t i f i c a t e o f t h e A u d i t o r w a s g i v e n t h e e f f e c t t h a t d u e t o a n i n a d v e r t e n t e r ro r i n t h e A u d i t R e p o r t t h e a f o r e s a i d p a y m e n t w a s n o t r e f l e c t ed i n t h e a u d i t r e p o r t a n d t h a t t h e a f o r e s a i d p a y m e n t w a s m ad e t o t h e e m p l o y e e s a n d t h e r e f o r e , n o d i s a l l o w a n c e w a s a tt r a c t e d . H o w e v e r , t h e C I T ( A ) d i d n o t a d m i t t o t h e a f o r e s a i d c o n t e n t i o n o f t h e l d . C o u n s e l f o r t h e a s s e s s e e h o l d i n g t h a t t he a s s e s s e e s h o u l d h a v e f i l e d a r e v i s e d A u d i t R e p o r t a n d t h a t a C e r t i f i c a t e f r o m t h e A u d i t o r w a s n o t e n o u g h a s t h e i s s u i n g o f C e r t i f i c a t e a f t e r A u d i t R e p o r t w o u l d a f f e c t t h e s a nc t i t y o f t h e A u d i t R e p o r t . T h e l d . c o u n s e l , h o w e v e r , i n t h i s r e sp e c t , h a s s u b m i t t e d t h a t t h e l d . C I T ( A ) s h o u l d h a v e g i v e n o p po r t u n i t y t o t h e a s s e s s e e t o f u r n i s h t h e r e v i s e d A u d i t R e p o r t. H e h a s f u r t h e r s u b m i t t e d t h a t i t w a s o n l y a m a t t e r o f v e r if i c a t i o n o f f a c t s r e g a r d i n g t h e p a y m e n t o f b o n u s t o t h e e m p l o y ee s w h i c h w a s d u l y p a i d b y t h e a s s e s s e e . T h e l d . c o u n s e l , a t t h i s s t a g e , h a s a l s o f u r n i s h e d a c o p y o f t h e r e v i s e d A u di t R e p o r t r e f l e c t i n g t h e p a y m e n t o f b o n u s t o t h e e m p l o y e e s . ITA No.60/CHD/2023 A.Y. 2018-19 3 4 . W e f i n d t h a t t h e l d . C I T ( A ) h a s a l s o n o t d i s p u t ed t h e a f o r e s a i d f a c t o f p a y m e n t o f b o n u s b y t h e a s s e s s e e t o h i s e m p l o y e e s . H e h a s c o n f i r m e d t h e d i s a l l o w a n c e o n l y h o l d i n g t h a t t h e r e v i s e d A u d i t R e p o r t h a s n o t b e e n s u b m i t t ed , w h i c h h a s b e e n f u r n i s h e d b y t h e a s s e s s e e n o w . I n v i e w o f t h i s , w e d o n o t f i n d j u s t i f i c a t i o n o n t h e p a r t o f t h e C I T ( A ) i n c o n f i r m i n g t h e d i s a l l o w a n c e m a d e b y t h e A O o n t h e is s u e o f p a y m e n t o f b o n u s t o t h e e m p l o y e e s a n d t h e s a m e i s , a c c o r d i n g l y , o r d e r e d t o b e d e l e t e d . 5 . T h e a p p e a l o f t h e a s s e s s e e s t a n d s a l l o w e d . O r d e r p r o n o u n c e d i n t h e O p e n C o u r t o n 2 3 r d A u g u s t , 2 0 2 3 . S d/ - S d / - (VIKRAM SINGH YADAV) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam” आदेश क त(ल)प अ*े)षत/ Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकरआय ु +त/ CIT 4. )वभागीय त न.ध, आयकर अपील"य आ.धकरण, च0डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar