Javid Bagwan Vs ITO Ward-1 & TPS (ITAT Bangalore)
CPC Cannot Ignore GST Paid Before ITR Due Date Merely Because Form 3CD Shows Outstanding Liability- Bangalore ITAT Grants Relief u/s 43B
The Bangalore ITAT held that where GST liability outstanding as on the date of the tax audit report is subsequently paid before the due date of filing the return of income, deduction under Section 43B cannot be denied merely because Form 3CD reflected the amount as payable at the time of audit. The Tribunal directed the AO to verify the actual payment dates and delete the addition if payment was indeed made before the due date for filing the return.
The assessee had originally disallowed ₹5.73 lakh towards outstanding GST while computing income. However, it simultaneously claimed deduction of ₹5.73 lakh on the ground that the GST had been paid before filing the return, leaving only ₹284 effectively disallowable. While processing the return u/s 143(1), CPC noticed that Form 3CD reflected an outstanding liability of ₹5.73 lakh and therefore treated the entire amount as inadmissible, resulting in an adjustment.
Before the Tribunal, the assessee explained that GST receipts and payments were not routed through the Profit & Loss account and that the liability shown in the audit report merely represented the position as on the date of signing the audit report. Subsequently, before filing the return on 15.02.2021, GST amounting to ₹5.73 lakh had already been paid and therefore deduction became allowable under Section 43B.
Accepting the contention, the ITAT observed that the CPC failed to appreciate that Form 3CD only reflected the liability position as on the audit report date and did not capture payments made thereafter but before the due date of filing the return. The Tribunal accordingly directed the AO to verify the GST payment evidence and delete the disallowance if payment before the due date was established.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
