AO Refused to accept Tax Audit Report as schedule not signed by CA-matter remitted

AO refused to accept Tax Audit Report as schedule were not signed by CA. High Court remanded the matter 

In a recent judgment, the Hon’ble High Court of Karnataka remanded the matter to Assessing Officer (AO) for fresh consideration where he refused to accept Tax Audit Report of the assessee on the ground that schedule/annexures thereto were not signed by Chartered Accountant.

ABCAUS Case Law Citation:
ABCAUS 4064 (2024) (06) HC

During the assessment proceedings, the Assessing Officer sent notices to the unsecured loans. Some of the notices were not served as proper address were not available. The AO held that the unsecured loans were bogus and added to them to the income of the assessee.

On appeal the CIT(A) partly allowed the appeal and ITAT confirmed the order of CIT(A).

The assessee challenged the order of the ITAT before the Hon’ble High Court and contended that the AO gets jurisdiction only if the said loan amount was received during the relevant financial year. The assessee submitted that the finding of the AO tha the unsecured loans are bogus was perverse because loans were received prior to the relevant assessment year.

The Hon’ble High Court observed that in the remand report submitted to the CIT(A), the AO had clearly reported that the assessee had claimed that the amount was not received in the relevant assessment year, but no evidence was submitted to substantiate the contention that the loans were received in earlier financial years.

In view of the above, the Hon’ble High Court remitted the matter to the file of the AO with liberty to the assessee to produce the material to show that the alleged amount was received prior to the relevant financial year.

However, in the remanded proceedings also the AO had once again rejected the claim of the petitioner by passing the impugned order which was again challenged by the assessee before the Hon’ble High Court by filing a Writ Petition.

The Hon’ble High Court observed that the respondent-Assessing Officer has refused to accept the Tax Audit Report by Chartered Accountant on the ground that the schedule and Annexures were not signed by the partner of the CA Firm and contained only signature of the assessee.

The Assessing Officer had also come to the conclusion that the Bank Statement of the petitioner and other documents had not been produced and consequently, proceeded to reject the claim of the petitioner.

The assessee contended that if one more opportunity is provided, the petitioner would produce additional documents to substantiate his claim and also establish genuineness and authenticity of Tax Audit Report by making necessary submissions in this regard before the Assessing Officer.

The Hon’ble High Court set aside the impugned order and remitted the matter back to the Assessing Officer for reconsideration afresh in accordance with law with liberty to the assessee to produce additional pleadings, documents, judgments, etc., which shall be considered by the AO. 

Download Full Judgment Click Here >>

• Penalty for late supply of goods allowable deduction u/s 37 being not a crime or prohibited activity
• Interest received from Cooperative banks allowable deduction u/s 80P to a Cooperative Society
• SC to decide distinction in employees & employer contribution to PF, ESI for allowability u/s 43B
• No liability to collect TCS u/s 206C (1C) from person involved in illegal mining – SC
• Receipts mentioning that it was towards corpus, donation assumed to be for corpus of trust