PONNUSAMY RAJA,VAKKIL NEW STREET, MADURAI V. INCOME TAX OFFICER, NON-CORPORATE WARD 1(7), MADURAI, INCOME TAX OFFICE, CR BUILDING, MADURAI

ITA 1677/CHNY/2025

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The case involves an appeal by Ponnusamy Raja against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition made by the Assessing Officer regarding a bonus payment for the assessment year 2018-19. The issue arose from a discrepancy in the tax audit report where the bonus was incorrectly certified as profit or dividend due to an oversight. The assessee provided a corrected certificate from the Chartered Accountant, which the Tribunal accepted, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775007 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 09-06-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N. RAJA KUMAR
• Assessee Lawyers: T.VASUDEVAN
• Keywords: Condonation of delay; Corroborative evidences

Judgement Text

"आयकर अपीलीय अिधकरण, ’ए’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी एस.आर. रगुनाथॎ, लेखा सद˟ क े समƗ Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri S.R. Raghunatha, Accountant Member आयकर अपील सं./I.T.A. No.1677/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2018-19 Ponnusamy Raja, No. 176-A, 3rd Floor, Vakkil New Street, Simmakal, Madurai 625 001. [PAN:AGEPR6307F] Vs. The Income Tax Officer, Non Corporate Ward 1(7), Madurai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri T. Vasudevan, Advocate ŮȑथŎ की ओर से/Respondent by : Shri N. Rajakumar, Addl. CIT सुनवाई की तारीख/ Date of hearing : 26.08.2025 घोषणा की तारीख /Date of Pronouncement : 02.09.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 04.03.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2018-19. 2. We find that this appeal is filed with a delay of 9 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really Printed from counselvise.com I.T.A. No.1677/Chny/25 2 prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication. 3. The only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made by the Assessing Officer in the facts and circumstances of the case. 4. At the outset, the ld. AR Shri T. Vasudevan, Advocate submits that the assessee paid bonus to his employees and the same is duly reflected in the Annexure placed at page 16 of the paper book, but, however, the Chartered Accountant, who conducted audit under section 44AB of the Income Tax Act, 1961 [“Act” in short] wrongly certified that the bonus was paid, which was otherwise payable as profit or dividend due to oversight. The ld. AR further submits that the assessee has obtained a certificate from Chartered Accountant, placed at page 17 of the paper book and prayed to delete the addition. 5. The ld. DR Shri N. Rajakumar, Addl. CIT fairly conceded the submissions of the ld. AR. 6. Heard both the parties and perused the material available on record. We note that in the assessment order, on perusal of the tax audit report, the Assessing Officer noted mismatch in amount paid to Printed from counselvise.com I.T.A. No.1677/Chny/25 3 employees as bonus or commission under section 36(1)(ii) of the Act. The assessee submitted before the Assessing Officer that the bonus amount of ₹.2,26,000/- was wrongly reported in tax audit report in column 20(a) due to oversight, but, however, since the assessee did not produce any statement or certificate from the auditor, the Assessing Officer disallowed the same and added to the income of the assessee. On appeal, the ld. CIT(A) confirmed the addition made by the Assessing Officer. 7. We note that the contention of the assessee is that the bonus amount paid was wrongly reported in tax audit report in column 20(a) due to oversight and moreover, the assessee failed to submit supporting evidence during the course of assessment proceedings. However, the assessee produced copy of the certificate of the Chartered Accountant, which is placed at page 17 of the paper book, wherein, we note that the Chartered Accountant has certified that after conducting audit under section 44AB of the Act in Form 3CB and 3CD, in Column 20(a) in Form 3CD, it was wrongly certified that the bonus paid at ₹.2,26,000/- as otherwise payable as profit or dividend, whereas, actually the bonus was paid to employees, which cannot be treated as profit or dividend. Considering the certificate issued by the Chartered Accountant and Printed from counselvise.com I.T.A. No.1677/Chny/25 4 brought on record, we delete the addition made by the Assessing Officer and allow the ground raised by the assessee. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced on 02nd September, 2025 at Chennai. Sd/- Sd/- (S.R. RAGHUNATHA) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 02.09.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. Printed from counselvise.com "