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Facts
The assessee's income tax return was processed, and a GST amount of Rs.1,92,62,395/- was disallowed by CPC based on a Tax Audit Report noting it was not deposited till the report's filing. The assessee claimed that Rs.65 lacs of this GST was paid before the due date for filing the income tax return under Section 139(1) and had itself disallowed Rs.1,27,62,395/-.
Held
The Tribunal relegated the issue to the Assessing Officer for verification of whether the Rs.65 lacs GST amount was actually paid by the assessee before the due date of filing the return. If verified, the deduction for this amount under Section 43B is to be allowed to the assessee.
Key Issues
Whether a GST amount, though not deposited by the audit report filing date, is an allowable deduction under Section 43B if paid before the due date for filing the income tax return under Section 139(1).
Sections Cited
139(1), 43B, 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
आयकर अपील"य अ"धकरण,च"डीगढ़ "यायपीठ, च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ "नधा"रण वष" / Assessment Year: 2021-22 Shri Bhupindre Paul Mahajan, The DCIT, Mahajan Building, Ratti, Vs CPC, Balh, Mandi (HP). Bengaluru. "थायी लेखा सं./PAN NO: ABYPM7732L अपीलाथ"/Appellant ""यथ"/Respondent Assessee by : Shri Vishal Mohan, Sr. Advocate with Shri Abhinav, Advocate Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr.DR Date of Hearing : 07.08.2025 Date of Pronouncement : 27.08.2025 PHYSICAL HEARING O R D E R PER RAJ PAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 13.11.2024 passed for assessment year 2021-22.
The brief facts of the case are that assessee has filed his return of income declaring net taxable income at Rs.2,23,14,610/-. This return was processed and taxable A.Y.2021-22 2 income was determined at Rs.2,88,13,610/-. In the Tax Audit Report, the ld. Auditor has made an observation that GST of Rs.1,92,62,395/- was not deposited till the filing of the Audit Report. The CPC Bangalore, on the basis of this Audit Report has made the disallowance of alleged GST amount.
The ld. counsel for the assessee, at the very outset submitted that assessee has made payment of Rs.65 lacs before the due date of filing of the return u/s 139(1), therefore, this amount of Rs. 65 lacs ought to be excluded from the total component of GST calculated and reported in Audit Report. He further submitted that assessee itself disallowed a sum of Rs.1,27,62,395/-.
With the assistance of ld. Representative, we have gone through the record carefully. Section 43B contemplates that deduction of this nature of payment is to be allowed on actual payment basis. In other words, if assessee has actually paid the GST amount, then only deduction u/s 43B would be allowable to the assessee. The assessee has actually paid Rs.65 lacs before the due date of filing of the return. Thus, it is entitled for this amount. The ld. CIT (Appeals) has failed to A.Y.2021-22 3 appreciate this fact from the copy of the return and instead picked up the figure from the Audit Report.
The assessee has filed an application u/s 154 which has been rejected. We are of the view that ld. CIT (Appeals) has failed to appreciate that if GST was paid before the due date of filing of the return, then it is an allowable deduction. Therefore, disallowance ought not to be there.
On due consideration of these facts, we are of the view that this issue deserves to be relegated to the AO only for a limited purpose to verify whether Rs.65 lacs have actually been paid by the assessee before the due date of filing of the return. In case it emerges out that it was actually paid, then deduction of Rs.65 lacs is to be allowed to the assessee. Accordingly, this appeal of the assessee is allowed for statistical purposes.
In the result, appeal is allowed for statistical purposes.