Deductions not claimed for CA mistake allowable during assessment proceedings if found correct and there is no need to file revised return-ITAT

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Deductions not claimed for CA mistake allowable during assessment proceedings if found correct and there is no need to file revised return-ITAT

Deductions not claimed for CA mistake allowable

ABCAUS Case Law Citation:
ABCAUS 1089 (2016) (12) ITAT

The Grievance:
The present appeal was directed against the order of Assessing Officer (AO) and CIT(A) inter alia disallowing deduction u/s 80G for eligible donation and unclaimed deductions u/s 43B due to the mistake of the CA 

Brief Facts of the Case:
The appellant assessee was a company engaged in the business. The assessee filed the return of income which was processed u/s 143(1) of the Income Tax Act, 1961 (Act). Subsequently, the case was selected for scrutiny and assessment was completed by the AO u/s 143(3) by making various additions which inter alia included disallowance on account of donation not added back to computation and claim of ESI and PF.

The CIT(A) also upheld the additions so made by the AO.

Aggrieved by the order of the AO and FAA, the assessee agitated the matter before the Tribunal.

Contentions of the Assessee:
The assessee represented that the chartered accountant (CA) of the assessee while computing the taxable income of the assessee company made two mistakes;

  • While computing the income, neither added back the amount of donation of Rs. 4,01,100/- nor did he claim donation of Rs. 1,00,000/- in respect of donation of Rs. 2,00,000/- admissible u/s 80G. Since the AO had made the addition for donation not added back to the computation by the mistake of the CA, he should have allowed deduction of Rs. 1,00,000/- u/s 80G also.
  • While computing income wrongly added back Rs. 1,97,450/- u/s 43B in respect of ESI and PF even though these paid before due date of filing of return. The mistake occurred because the CA did not take into the consideration, the 1st provisio to section 43B.

The assessee raised the ground that AO had erred in denying benefit of 80G and deduction U/s 43B amounting in total to Rs. 3,49,371/- on the plea that it was not claimed in return even though it is settled law that any claim made during the course of assessment proceedings has to be considered and allowed, if it is permissible under law.

Observations made by the ITAT:

Disallowance for donation
The Tribunal observed that the AO did not accept the request of the assessee and disallowed the donation under the head charity and donation and added back to the total income of the assesee which was contrary to law, because there was no need to file the revised return.

The Tribunal noted that during the course of assessment proceedings the assessee had requested and claimed the deductions which had not been found false/ forged or wrong by the AO. The assessee had made the payment of donation to the trust which was approved under section 80G of and assessee had also produced the receipt of the same which had not been found false, bogus by the AO.

The ITAT opined that the assessee was entitled for the donation claimed by the assessee and directed the AO to allow the benefit of donation as claimed by the assessee u/s 80G.

Claim for PF/ESI
The Tribunal noted that in respect of payment of ESI and PF, the assessee had not furnished any evidence either before the AO or before the CIT(A), which was very much essential to the claim made by the assessee.

The ITAT remitted back the issue to the file of the AO to consider the same afresh after giving adequate opportunity of being heard and assessee was directed to furnish the evidence before the AO to substantiate his claim.

The appeal was partly allowed

Deductions not claimed for CA mistake allowable

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