RAJESH VEDVYAS MISHRA,MUMBAI vs. DCIT CIRCLE 24(1), MUMBAI, MUMBAI

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ITA 2049/MUM/2026Status: DisposedITAT Mumbai13 August 2026AY 2020-216 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's right to deduction under Section 43B should not be denied on technical grounds. The matter was restored to the AO to examine and verify the documents regarding the disallowance and subsequent payment.

What were the facts?

The assessee sought a deduction under Section 43B for a GST liability that was disallowed in FY 2018-19 and subsequently paid in FY 2019-20. The Assessing Officer (AO) had disallowed the claim, and the CIT(A) dismissed the assessee's rectification application.

What were the issues?

Whether the assessee is entitled to a deduction under Section 43B for a liability paid in a subsequent year after being disallowed in the previous year, and whether the denial of this claim on technical grounds is justified.

Which sections of the Income-tax Act were involved?

Section 43B,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SANDEEP GOSAIN & BIJAYANANDA PRUSETH

Pronounced: 13.08.2026

PER SANDEEP GOSAIN, JUDICIAL MEMBER:

This appeal is filed by the Assessee against the order of Ld. ADDL/JCIT(A), Panaji vide DIN: ITBA/APL/S/250/2025- 26/1086288583(1) dated 20-Feb-2026 for the Assessment Year 2020-21. The Assessee has raised the following grounds of appeal:

1) On the facts and in the circumstances of the case and as per the law, the learned CPC erred in rejecting the rectification application of the Appellant and consequently denying the benefit of deduction of Rs. 23,72,142/- under Section 43B of the Act. Thus, the impugned order may be quashed and the return of income may be accepted. 2) On the facts and in the circumstances of the case and as per the law, the learned CPC/Respondent erred in not granting a deduction of Rs. 23,72,142/- under Section 43B of the Act resulting in a mistake apparent on record in the intimation issued under Section 143(1) of the Act. Thus, the addition of Rs. 23,72,142/- being untenable in law may be deleted and the return of income may be accepted. 3) The Appellant craves leave to add, delete, alter, modify any ground before the conclusion of the present appellate proceeding.

2.

Ground Nos. 1 and 2 raised by the assessee are interrelated and interconnected and relates to challenging the order of the CIT(A) in denying the benefit of deduction under Section 43B of the Income Tax Act to the assessee. Therefore, we have decided to adjudicate these grounds through the present consolidated order.

3.

We have heard the counsels for both parties, perused the material placed on record, the judgments cited before us, and the order passed by the Revenue Authorities. From the records, we noticed that the assessee has challenged the denial of the benefit under Section 43B of the Income Tax Act. The learned CIT(A), while passing the impugned order, categorically held that the appeal had been filed by the assessee against the rejection of the application for rectification and that, since there was no error in the order, the appeal of the assessee was dismissed.

4.

Be that as it may, from the records, we noticed that the disallowance made by the AO was on the basis that the respective amount was not reflected in Form 3CD. Whereas, on the contrary, it was submitted that all 2 the required documents had already been submitted by the assessee before the Revenue Authorities. In this regard, the assessee has further relied upon the documents which were uploaded, and the same are reproduced below:

 Statement of Income for FY 2018-19, wherein the disallowance is shown.  Copy of Form 3CB for FY 2018-19, wherein the disallowance is reported.  Copy of ITR for FY 2018-19, wherein the disallowed amount is filled in (page 16).  Statement of Income for FY 2019-20, wherein the allowable amount is shown, since the same was disallowed in the previous FY 2018-19.  GST Cash Ledger copy (as downloaded from the GST portal in Excel and converted into PDF), duly highlighted in yellow, wherein the amount is debited in the cash ledger during FY 2019-20, pertaining to the months of March 2018, November 2018, December 2018, January 2019, February 2019 and March 2019.

5.

The total comes to Rs. 23,72,143.00. Since this amount pertains to FY 2018-19, the assessee submitted that the same was disallowed under Section 43B during FY 2018-19 and, when it was debited in the cash ledger in FY 2019-20, the same was treated as allowable and claimed in the ITR accordingly.

6.

It was submitted that for easy understanding, the GST ledger may be read after considering the following:

As per the GST system, any amount paid is credited to the cash ledger and, when the liability is discharged, the amount is debited from the cash ledger.

Rs. 23,72,143.00 was disallowed during FY 2018-19 under Section 43B and, when the same was debited in the cash ledger in FY 2019-20, the same was treated as allowable and claimed in the ITR accordingly.

7.

To substantiate the same, a copy downloaded from the GST portal in PDF format was also attached. The same comprises Integrated Tax, Central Tax and State Tax.

8.

It was further submitted that the reason for not capturing the data in Sr. No. 26 could be because of the switching over of the Income Tax website from the old system to the new system in the year 2020.

The details were reported as under:

26(i): In respect of any sum referred to in clause (a), (c), (d), (e), (f) or (g) of Section 43B, the liability for which—

26(i)(A): pre-existed on the first day of the previous year but was not allowed in the assessment of any preceding previous year and was—

26(i)(A)(a): paid during the previous year.

Section Nature of liability Amount 43B GST Rs. 23,72,142.00

On the basis of these documents, it was submitted by the assessee that he is entitled to the benefit under Section 43B of the Act.

9.

After having heard the counsel for the parties and evaluating the records, we are of the view that, in case the assessee is entitled to the benefit of Section 43B of the Income Tax Act, then, in that eventuality, his rights cannot be scuttled merely on technical considerations.

10.

We, therefore, deem it fit to restore the matter to the file of the AO with a direction to examine and verify the documents relied upon by the assessee, particularly with regard to the disallowance made in FY 2018-19 and the subsequent payment/discharge of the GST liability in FY 2019-20. The AO shall thereafter determine the allowability of the claim under Section 43B of the Act in accordance with law, after providing reasonable opportunity of being heard to the assessee.

11.

Needless to say, the AO shall consider the documents and submissions furnished by the assessee and pass a speaking order in accordance with law.

12.

In the result appeal filed by the assessee stands allowed for statistical purposes.

Order pronounced in the open court on 13.08.2026.

Sd/- Sd/- BIJAYANANDA PRUSETH SANDEEP GOSAIN ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 13.08.2026 RY-SrPS Copy to: RAJESH VEDVYAS MISHRA, B/701, NEPTUNE HARMONY, DUMPING 1 ROAD, MULUND (WEST)- 400080, MUMBAI-400080, MAHARASHTRA DCIT CIRCLE 24(1), MUMBAI, ROOM NO. 408, 4TH FLOOR, PIRAMAL 2 CHAMBERS, LALBAUG, PAREL, MUMBAI - 400 012, MUMBAI-400012, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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