Bhupinder Paul Mahajan Vs DCIT (ITAT Chandigarh)
Audit Report Note Not Final – Actual GST Payment Before Due Date Saves Deduction; ITAT Chandigarh Restores GST Disallowance Issue – Deduction u/s 43B to Be Allowed if Paid Before Due Date
Assessee filed return declaring taxable income of Rs. 2.23 crore. CPC Bengaluru processed return & determined income at Rs. 2.88 crore after disallowing Rs. 1.92 crore GST liability on ground that it was unpaid at time of audit report. This was based on auditor’s note in tax audit report.
Before Tribunal, it was argued that out of total liability, Rs. 65 lakh had in fact been paid before due date of filing return u/s 139(1). Assessee had already disallowed Rs. 1.27 crore on its own, but CPC disallowed entire Rs. 1.92 crore without giving credit for Rs. 65 lakh actually paid.
Tribunal noted that s.43B clearly provides deduction only on actual payment basis. If Rs. 65 lakh was paid before due date of return, it must be allowed. It held that CIT(A) erred in ignoring evidence of return & relying solely on auditor’s note. Tribunal directed AO to verify whether Rs. 65 lakh had been paid before due date & if so, to allow deduction accordingly. Accordingly, appeal was allowed for statistical purposes & issue restored to AO for limited verification.
