SECTION 43B l DEDUCTION TO BE ALLOWED
ONLY ON ACTUAL PAYMENT
Where sums referred to in first proviso to section 43B had in fact been paid on or before due dates mentioned therein, but evidence therefor had been omitted to be furnished along with return, Assessing Officer can entertain applications under section 154 for rectification of intimations under section 143(1)(a) or order under section 143(3), as the case may be, and decide same on merits
1. Instances have come to the notice of the Board where deduction claimed under section 43B of the Income-tax Act was disallowed as prima facie inadmissible, under section 143(1)(a), as the assessee had not furnished evidence of payment of tax, duty, etc., along with the return. However, later on, the deduction claimed was allowed under section 154 as the assessees subsequently furnished such evidence.
2. The aforesaid action of allowing the deduction subsequently under section 154 is not in accordance with law. Furnishing of evidence of payment of any sum by way of tax, duty, etc., along with the return is a necessary requirement for allowance of deduction of that sum under section 43B. The sums disallowed as prima facie inadmissible under section 143(1)(a), in the absence of requisite evidence of the payment, cannot be subsequently allowed under section 154. This is because the scope of the powers to make prima facie adjustments under section 143(1)(a) is somewhat co-terminus with the power to rectify a mistake apparent from the record under section 154.
3. Similarly, filing of evidence in support of an exemption/deduction at the time of furnishing the Return of Income has been prescribed as a necessary condition in certain other sections of the Income-tax Act, such as sections 32AB(5), 33AB(2), 35D(4), 35E(6), 54(2), 54B(2), 54D(2), 54F(4), 54G(2), 80HH(5), 80HHA(4), 80HHB(3), 80HHC(4), 80HHD(6), 80-I(7), etc. In such cases also, where the exemption/deduction claimed is disallowed as prima facie inadmissible for want of evidence in support thereof under section 143(1)(a), it cannot be subsequently allowed by a rectification order under section 154 if the assessee later on furnishes evidence in support thereof.
4. Such a view is also necessary from administrative angle as, if the department condones such lapses in the initial stages, a tendency may develop amongst the taxpayers not to file relevant evidence at the time of filing the return and then make a claim by putting is an application under section 154. This tendency would unnecessarily increase infructuous work for the department. Hence, strict view which is in accordance with the legal provisions is necessary in such cases.
Circular : No. 581, dated 28-9-1990.
