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Judgment
PER MANISH AGARWAL, ACCOUNTANT MEMBER:
The present appeal is filed by assessee against the order dated 04.09.2025 passed by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld. CIT(A)”] in Appeal No. NFAC/2019-20/10194369 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 20.09.2022 passed u/s 143(3) r.w.s. 144B of the Act pertaining to Assessment Year 2020-21.
Brief facts of the case are that assessee is a public limited company and filed its return of income on 27.01.2021, declaring total income of INR 82,93,54,150/- under normal provision of the Act and the said return was processed u/s 143(1) of the Act at INR 83,13,940/-. The case was selected for complete scrutiny and after considering the submissions made by the assessee, the assessment was completed vide order dated 20.09.2022 wherein disallowance of INR 40,57,471/- was made u/s 14A of the Act and further deduction claimed u/s 80G of the Act of INR 2,70,000/- was disallowed. Accordingly, total income was assessed at INR 83,57,27,411/-.
Against the said order, the assessee preferred appeal before Ld.CIT(A) who vide impugned order dated 04.09.2025, partly allowed the appeal of the assessee wherein disallowance made u/s 14A was deleted however, the remaining disallowances were upheld.
Aggrieved by the said order, the assessee is in appeal before the Tribunal by taking following Grounds of appeal mentioned in the appeal memo:-
1.“On the facts and circumstances of the case, the order passed by the Commissioner of Income Tax (Appeals) Income Tax Department, National Faceless Appeal Centre (hereinafter referred to as CIT(A)), is bad in the eye of law and on facts.
2.On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in passing the order without providing adequate and proper opportunity of being heard to the assessee in violation of principle of natural justice.
3.On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the disallowance of Rs.2,70,000/- made by the AO under section 80G of the Income Tax Act.
4.On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of the AO taking the income earned under the head capital gains in the computation sheet at Rs.64,65,896/- as against income declared and accepted in intimation order under section 143(1) at Rs.26,68,582/-, thereby charging the tax on the difference of an amount of Rs.37,97,314/-in the computation sheet attached to the assessment order.
5.On the facts and circumstances of the case the learned CIT(A) has erred, both on facts and in law, in confirming the disallowance of Rs.89,950/-under section 43B made by the AO on the basis of intimation order passed under section 143(1) of the Act ignoring the fact that the said amount was disallowed in the AY 2019-20 and subsequently paid during the current year and therefore cannot be disallowed in the current assessment year.
6.On the facts and circumstances of the case the learned CIT(A) has erred, both on facts and in law, in confirming the disallowance of Rs.4,15,756/-under section 43B made by the AO on the basis of intimation order passed under section 143(1) of the Act ignoring the fact that the assessee has already disallowed the said amount while filing the return of income under section 36(1)(ii) of the Income Tax Act.
7.(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the disallowance of Rs. 15,40,177/-made by the AO on the basis of intimation order passed under section 143(1) of the Act account of employees' contribution towards ESI fund or Employees Provident fund invoking the provision of section 36(1)(va) of the Act.
(ii)That the abovesaid disallowance has been confirmed despite the fact that payment has been made before due date of filing of return of Income under the Income Tax Act.
8.That the appellant craves leave to add, amend or alter any of the grounds of appeal”
During the course of appellate proceedings, vide letter dated 07.04.2026, the assessee has taken two additional Grounds of appeal which read as under:-
9(i) “On the facts and circumstances of the case, the claim of brought forward short-term capital loss of Rs. 26,68,522/- in the computation sheet by the AO while computing tax liability is unjustified and without any reason. That claim duly reflected and allowed in the intimation issued u/s 143(1) thereby charging the tax on the excess income by not giving the claim of abovementioned loss in the computation sheet attached to the assessment order.
(ii)That the action of the Assessing Officer is arbitrary and inconsistent, in as much as the brought forward short-term capital loss was duly accepted and reflected in the intimation issued under section 143(1), however, the same has been ignored in the final computation without assigning any reasons, which is contrary to settled principles of law.”
During the course of hearing, Ld.AR has not pressed Ground of appeal No. 7 regarding the disallowance of INR 15,40,170/- made on account of delayed payment of employees’ contribution towards ESI fund u/s 36(1)(va) of the Act therefore, the same is dismissed.
Ground of appeal Nos. 1 & 2 raised by the assessee are general in nature, hence not adjudicated.
Ground of appeal No.3 is with respect to the confirming the disallowance of INR 2,70,000/- made by disallowing the deduction u/s 80G of the Act.
Heard the contentions of both the parties at length and perused the material on record. The AO observed that assessee has failed to file the receipts of donations of INR 2,70,000/- out of the total donation of INR 5,40,000/- given to Vishwambhar Free Homeopathic Dispensary. As per Ld.AR of the assessee, all the receipts were filed before the AO and assessee is eligible for deduction @ 50% u/s 80G of the Act however, AO has made the disallowance @ 100% of the donation for which the receipts of donations were not available. It is observed that the assessee has filed total receipts of the donations of Rs. 5,40,000/-however, the AO has considered the donation receipts of INR 2,70,000/- only. Under these circumstances, we remand this issue back to the file of AO with the directions to make proper verification of the receipts of donation and allow the deduction u/s 80G of the Act in accordance with law. In the event, the assessee has failed to produce the receipts of balance donation of INR 2,70,000/-, the AO is directed to disallow only 50% of the donation as claimed u/s 80G of the Act.
Ground of appeal No.4 raised by the assessee is with respect to the addition of INR 37,97,314/- being the difference in the capital gains. It is observed that no discussion whatsoever was made on this issue in the assessment order nor in the intimation order issued u/s 143(1) of the Act. The Ld. AR drew our attention to the computation sheet (ITNS 150) attached with the assessment order wherein capital gain was incorrectly taken at INR 64,45,896/- as against the capital gain of INR 26,68,522/- declared by the assessee, resulting into excess assessment of capital gain by INR 37,97,314/-. It is further observed that this issue has not been decided by Ld. CIT(A).
After considering the arguments of both the parties and verification made from the material available on record, we find that there is no whisper about this addition in the assessment order. It appears that there may be some calculation error done while preparing the computation sheet for working the tax liability. Accordingly, AO is directed to make verification of the facts and decide this issue accordingly. Ground of appeal No.4 is thus, allowed for statistical purposes.
Ground of appeal Nos. 5 & 6 raised by the assessee are with respect to the disallowance made u/s 143(1) of the Act of INR 89,950/- and INR 4,15,756/-.
The claim of the assessee is that the amount of INR 89,950/- was part of the total disallowance u/s 43B by the CPC in the order passed u/s 143(1) of INR 1,33,761/- however, this sum was already paid during the year and in the Tax Audit Report in Clause 26(i)(A)(a) under the head “amount paid during the year, this amount was reported which was wrongly added by CPC”. Though the assessee has already explained the position in the proposed adjustments u/s 143(1) of the Act. Likewise with respect to the disallowance of INR 4,15,756/-, it was the claim of the said amount which was added back to the total income of the assessee in the return filed however, CPC has again made the addition thus, it is a double addition.
Having considered both the parties and perused the material available on record. it is observed that both the amounts disallowed u/s 43B of the Act have been taken by CPC in the intimation order from the Tax Audit Report where CPC has wrongly considered this figure as disallowable u/s 43B including the fact that amount of INR 89,950/- was paid during the year under appeal therefore, no disallowance could be made u/s 43B of the Act for the same and in respect of the amount of INR 4,15,756/-, this amount has already been offered for tax. Both these facts need to be examined therefore, in the interest of justice, we sent this issue back to the file of AO for necessary verification as claimed by the assessee and decide in accordance with law.
The additional Grounds of appeal No.9(i) & 9(ii) are with respect to not allowing the adjustment of brought forward capital loss. The issue is raised in the addition grounds of appeal and being legal in nature, the same is admitted for adjudication. However, at this stage, we are not able to verify the claim of the assessee therefore, in the interest of the justice, this issue is sent back to the file of AO with the directions to examine the claim of the assessee whether it is entitled for set off of brought forward short-term capital loss and decide the issue in accordance with law. With these directions, additional Grounds of appeal Nos. 9(i) & 9(ii) are allowed for statistical purposes.
In the result, appeal filed by the Assessee is Partly allowed .