2023 (1) TMI 619 - AT - Income Tax

Disallowing the claim of deduction u/s 36(1)(ii) - Denial of natural justice - Commissioner (Appeals) did not consider that the amount of Bonus mentioned in Form 3CB - CIT(A) did not provide adequate opportunity to the assessee and further submitted that the CIT(A) failed to appreciate the fact that the amount of bonus mentioned in form no. 3CB to the tune was by mistake - HELD THAT - Revised audit report was submitted on 8.8.2022. The impugned order was passed on 4.8.2022. Looking to the totality of the facts and to sub-serve the interest of principles of natural justice, this ground is restored to the file of AO who would verify the correctness of the claim of the that the audit report has been revised and a correct figure has now been mentioned in the audit report relating to payment of bonus. AO would therefore decide the issue as per law. Ground nos. 1 2 are allowed for statistical purposes. Disallowance of deduction claimed u/s 80-TTA regarding interest earned on savings bank account - HELD THAT - Disallowance was made purely on the ground that no evidence was furnished. However, it is the contention of the assessee that the interest was in fact earned and the assessee was also having the bank pass book, which duly reflected the interest from savings bank account. Considering the totality of the facts, this ground is also restored to the file of AO who will verify the correctness of the claim of the assessee and in the event the interest is found to have been reflected in the bank statement of the assessee, the AO would grant deduction as per law. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
1. Opportunity for submitting Revised Audit Report
2. Disallowance of Bonus amount
3. Disallowance of interest on Savings Bank Account
4. Eligibility for deductions under Section 36(1)(ii) and Section 80TTA
5. Further evidence submission

Opportunity for submitting Revised Audit Report:
The appeal was against the order of the Commissioner of Income-tax (Appeals) regarding the assessment year 2020-21. The assessee contended that the Commissioner did not provide a reasonable opportunity for submitting the Revised Audit Report, which was submitted after the order. The Tribunal allowed this ground for statistical purposes, directing the Assessing Officer to verify the correctness of the revised report.

Disallowance of Bonus amount:
The dispute arose from the disallowance of a bonus amount claimed by the assessee. The Tax Auditor had identified a variance in the amount paid as bonus or commission, leading to disallowance under Section 36(1)(ii) of the Income Tax Act. The Commissioner upheld the disallowance due to the absence of a revised audit report or certificate from the Chartered Accountant. The Tribunal restored this issue to the Assessing Officer to verify the claim based on the revised report.

Disallowance of interest on Savings Bank Account:
Regarding the disallowance of deduction claimed under Section 80-TTA for interest earned on a savings bank account, the Tribunal found that the authorities failed to consider the evidence provided by the assessee, namely possession of a passbook reflecting the interest earned. The Tribunal restored this issue to the Assessing Officer for proper verification and potential grant of deduction.

Eligibility for deductions under Section 36(1)(ii) and Section 80TTA:
The Commissioner had denied deductions under Section 36(1)(ii) and Section 80TTA based on the information available in the return and Tax Audit Report. The Tribunal emphasized the need for proper evidence and certification by the Chartered Accountant to support any revised claims. The issue was restored to the Assessing Officer for further examination based on the correctness of the claims.

Further evidence submission:
The assessee was granted leave to provide further evidence or submissions during the appeal hearing. The Tribunal allowed the appeal for statistical purposes, indicating that the other grounds were general in nature and required no separate adjudication. The order was pronounced in open court on 11th January 2023.

This detailed analysis covers the key issues raised in the legal judgment, providing a comprehensive understanding of the Tribunal's decision on each matter.