MANIDHARA INFRA,SURAT vs. ITO, WARD 3(3)(1), SURAT

The grounds of appeal

filed by the assessee are as follows: “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer (Central Processing Centre, Bengaluru) in making adjustment u/s 143(1) by not allowing deduction under section 43B of the Act since there is neither an arithmetical error nor an incorrect claim apparent from the record and hence the same is bad in law.

At the outset, Learned Counsel for the assessee informed the Bench that appeal filed by the assessee for assessment year 2019-20 is barred by limitation for four (4) days. The assessee filed a petition for condonation of delay. The assessee explained that the delay has occurred due to Covid-19 Pandemic disease and therefore the same should be condoned. However, the Learned Departmental Representative (Ld. DR) for the Revenue objected that the delay should not be condoned.

We have heard both the parties on this preliminary issue and noted that delay is attributable to Covid-19 Pandemic, which is condoned by Hon'ble Supreme Court, in MA No.21 of 2022, dated 10.01.2022, therefore having regard to the reasons given in the petition of condonation of delay, we condone the delay and admit the appeal of assessee for hearing.

Brief facts qua the issue are that the assessee is engaged in the business of construction and other ancillary activities and filed its return of income for A.Y. 2019-20 on 17.10.2019 declaring gross total income of Rs.96,227/-. The same was processed u/s 143(1) of Income Tax Act in which a disallowance of Rs.4,52,400/- u/s 43B of the Act was made. The Assessing Officer (CPC) made adjustment u/s.143(1)(a) of Rs.4,52,400/- as there was inconsistency found in amount disallowable as per Audit Report filed in Form 3CD and the Return of income.

On appeal, Ld. CIT(A) confirmed the action of Assessing Officer. Aggrieved, the assessee is in further appeal before us.

The Learned Counsel for the assessee submitted that as per Tax Audit Report dated 10.10.2019 it was reported that GST of Rs.4,52,400/- was unpaid till the date of audit report. The return of Income was filed on 17.10.2019 which is within due date of filing ROI, as the due date was extended from 30.09.2019 to ITA 43/SRT/2022/AY.2019-20 Manidhara Infra 31.10.2019 vide circular F No.225/157/2019/ITA.II. It was further submitted that the GST of Rs.4,52,400/- which was reflected as payable as per Tax Audit Report dated 10.10.2019 was paid on 19.10.2019 i.e. within the due date of filing of return. Accordingly, it was submitted that since the payment of GST is made after signing of the Audit report but before the due date of filling return of income, the same is allowable under section 43B of the Act. The Appellant filed the copy of Challan of ICICI Bank dated 19.10.2019, Ledger of CGST/SGST, Copy of Return of Income filed on 17.10.2019 in support of its claim.

On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity.

We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. The Ld. Counsel for the assessee submits that GST amount of Rs.4,52,400/- has been deposited before the filling of income tax return. The Ld. Counsel submitted that the GST amount has been paid on or before furnishing the return of income and for that he took us through paper book page no. 17 which is return of income filed by the assessee and amount mentioned in Form No. 3CD that is in Tax Audit Report. The Ld. Counsel pointed out that assessee has filed the return of income on 17.10.2019, however the last date of filling of return of income in the said assessment year was up to 31.10.2019, therefore, assessee has paid the GST on or before the due date of filling the return of income. The assessee could not deposits the GST on or before 17.10.2019 as the assessee was taking legal opinion from the experts, whether the assessee is eligible for input credit or not, or whether he is responsible to pay the GST or not. Therefore, Ld. Counsel contended that as per section 43B of the Act, the assessee made the compliance and he filed the return of income on or before i.e. 31.10.2019 and paid the GST on or before 31.10.2019 also. Since, the amount of GST has been deposited by assessee on or before filing

In the result, appeal filed by the assessee is allowed.