Case Law Details
ALP Overseas Pvt. Ltd Vs DCIT (ITAT Delhi)
It is notable that though the provision for gratuity was not added back while computing the income of the assessee, but in the balance sheet, the assessee had disclosed it, as provision for gratuity. While preparing the IT return of the assessee, the Chartered Accountant did not add back it as income due to bona fide mistake.
We further observe from the computation of income submitted by the assessee for preceding and subsequent assessment years that the assessee has correctly added back the provision for gratuity and it was offered as income. Therefore, it appears that there was no malafide intention of the assessee for filing inaccurate particulars of income. It is observed that the case was originally assessed u/s. 143(3) of the IT Act and all the information including the provision for gratuity were available with the Assessing Officer, as the provision for gratuity stood added back as income of the assessee in the balance sheet filed with the return of income.
The disclosure of provision for gratuity as income in the balance sheet of the current year filed with the return of income and offering such provision for gratuity as income in preceding year’s computation of income, inspire confidence on the submission of the assessee that it was due to the mistake of Chartered Accountant not to add back such provision in the computation of income of the year under consideration.
Therefore, in view of the decision of Hon’ble Punjab & Haryana High Court in the case of CIT vs. Rice Mills (SD) (2205) 275 ITR 206, where it has been held that the fault of Chartered Accountant cannot be visited on the assessee, in our considered opinion, no adverse inference can be drawn against the assessee. Various decisions relied by the assessee also make out the case of the assessee.
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