The Commissioner of Income Tax-Iii v. Sapient Corporation Pvt Ltd

ORDER %

23.07.2013 Thereis delayof 262 days in filingofthe appeal. It is statedthat there was change in counsel resulting in the said substantialdelay. However, before issuing notice on the said application, we have deemedit appropriateto examineandconsiderthe case ofthe appellant on merits, as we find that no ground for issue of notice on merits is made out.

¶2The respondent assessee is a company and for the Assessment Year 2004-05 reassessmentproceedingswere initiated on the ground that Rs.37,31,971/-towardsunpaid leave encashmentshouldhave been disallowed under Section 43B of the Income Tax Act, 1961. Assessmentorder dated 23'^ September,2009 was passed.makingthe said addition after noticing that the respondent-assesseein his reply had mentioned details, but the reply filed by the assessee was unacceptable. No facts have been discussedin the assessment order.

¶3The Commissioner of Income Tax (Appeals) noticed that the appellanthad filed a letter before the AssessingOfficer, stating that they had made paymentof Rs.37,26,812/-towards leave encashment duringthe periodrelevantto the Assessmentyear 2004-05. It was also recorded that the opening outstanding balance of unpaid leave encashmentwas Rs.1,34,65,505/-.Thus,this amountof Rs.37,26,812/- should be allowed as a deduction and the net addition should be Rs.5,159/-. This plea of the assesseehas been acceptedby the CIT (Appeals) and the tribunal. The said observationand the findings recordedbythe CIT (Appeals)and the tribunalare correctand did not requireany interference,once the Revenuehas acceptedthat payment of Rs.37,26,812/-was made and there was an outstandingbalanceof unpaid leave encashmentof more than Rs.l crore in the beginningof the year. In spite of being repeatedlyquestioned,learnedcounselfor the appellant-Revenuehas not statedthat Rs.37,26,812/-was included and was claimed as expenditure in the earlier years. j

¶4Learned counsel for the appellanthas submittedthat the total disallowance made by the CIT (Appeals) and the tribunal was Rs.50,935/-and, therefore,the assessee had probably not stated the true and correct facts. This aspect was not urged by the Revenue before the tribunal. It is correct that the tribunal has recorded that disallowance was made of Rs.50,935/-, but this was on account of the fact that the assesseehad pointedout an error in the computationand as they had wrongly claimed Rs.45,476/- in excess towards leave encashmentaccount. No notice is requiredto be issued on the said aspect/finding.

¶5In view of the aforesaidposition,we do not think it is necessary to issue notice on the application for condonation of delay and consequentlythe saidapplicationalongwiththe appealare dismissed. r

SANJEEV SACHDEVA, J. JULY 23, 2013 VKR

SANJIV KHANNA, J. eju) c I

$-1. * IN THE HIGH COURT OF DELHI AT NEW DELHI + CM No. 9159/2013 & ITA 288/2013 THE COMMISSIONER OF INCOME TAX-III Appellant Through Mr. Rohit Madan, Advocate. versus SAPIENT CORPORATION PVT LTD Respondent Through Nemo. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE SANJEEV SACHDEVA