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TMI Blog2020 (2) TMI 1658X X X X Extracts X X X X X X X X Extracts X X X X ..... her, we note that the assessee had already suo moto disallowed expenditure incurred on CSR activities, interest on late payment of TDS, penalty of PF and penalty of entry tax total - So, the allowability of club expenses which assessee claimed could not have been disallowed without giving proper opportunity to the assessee, which omission on the part of AO [CPC] is against the principles of Natural Justice and it cannot be sustained. Therefore,we allow the appeal of the assessee and direct deletion of addition. Appeal of assessee allowed. - ITA No. 2350/Kol/2019 - - - Dated:- 19-2-2020 - Shri A.T. Varkey, JM For the Appellant : Shri A.K. Tulsiyan, FCA. For the Respondent : Shri Jayanta Khanra, JCIT, Sr. DR. ORDER Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A), there seems no error in the computation made by the AO (CPC). So, he dismissed the assessee s ground of appeal. Aggrieved, the assessee is in appeal before this Tribunal. 4. I have heard both the sides and have perused the material available on record. It is noted that the assessee s return of income was processed by the CPC, Bangalore wherein the assessee had declared total income of R.11,93,30,100/-. Later the assessee received communication of proposed adjustment of Rs.7,10,679/- u/s. 143(1)(a) of the Act from the DCIT, CPC on 12.07.2018. This figure of Rs.7,10,679/-, according to Ld. AR, was a difference between the figure of Rs.11,70,671/- which was added back (disallowed) by the assessee in the return of income and the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as disallowed the figure of Rs.7,10,679/- being the difference of Rs.18,81,350 Rs.11,70,671. According to ld. AR, the confusion happened because amount of club expenses was wrongly reported by the auditor in the Tax Audit Report in column no. 21(a) and on the basis of which disallowance was made by CPC u/s. 143(1) of the Act. The Ld. AR drew our attention to page A1 of the paper book wherein I find that a certificate of the auditor has been enclosed which states that this was an inadvertent error made by him. Therefore, the main contention of the Ld. AR is that the mistake of the auditor/clerical error in the Tax Audit Report cannot be the basis for disallowance of expenses which has been legally spent by the assessee wholly and exclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (l)(a) with reference to the provisions of s. 438. It further appears that the tax audit report did not contain any break-up of the amount or the further information required in the light of the two provisos to s. 438. The tax auditor did not specify in-the tax audit report the amount inadmissible under s. 438. Therefore, it appears to us that it was necessary for the AO to issue a notice under s. 143(2) for the purpose of making a proper assessment under s. 143(3). 6. Therefore, in the present case, I am of the opinion that based on the audit report during the proceedings u/s. 143(1) of the Act, no adjustment/disallowance/addition of the expenditure claimed by the assessee on account of club expenses could not have been disallowed wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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