Introduction: In the noteworthy case of Santi Kumar Oswal Vs ACIT, the Income Tax Appellate Tribunal (ITAT) Kolkata made a significant ruling regarding the disallowance of Goods and Services Tax (GST) under Section 43B of the Income Tax Act, 1961. The ITAT overturned a prior decision by the Commissioner of Income Tax (Appeals), stating that no disallowance can be made if GST is paid before the due date of filing the Return of Income (ROI). This article will delve into the details of this case, examining the arguments presented and discussing the implications of the ITAT’s verdict.
Analysis: The case revolved around the disallowance of GST worth Rs. 8,81,938, which the Assessing Officer (AO) had deemed was not paid by the assessee within the due date, and thus, was disallowed under Section 43B of the Act. The assessee contended that the GST was indeed paid before the due date of ROI filing, so it should be allowed as a deduction.
The ITAT Kolkata, upon careful review, found that the First Appellate Authority had not analytically considered the submissions of the assessee. There was no proper reasoning in the order that could justify the disallowance. The ITAT directed the First Appellate Authority to review the challans demonstrating the payment of GST before the due date of ROI filing. If found true, the deduction should be allowed to the assessee.
Conclusion: The case of Santi Kumar Oswal Vs ACIT serves as a valuable example of the rigorous application of the Income Tax Act. The ITAT Kolkata’s ruling emphasizes that no disallowance can be made for GST paid before the due date of filing the ROI. This ruling not only upholds the fair application of the Act but also offers clarity on the intricacies of GST deduction under Section 43B. Consequently, the appeal of the assessee was partly allowed for statistical purposes, and the matter was remitted back to the First Appellate Authority for further review.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi [in short ‘ld. CIT(A)’] dated 27.02.2023 passed for assessment year 20 19-20.
2. The assessee has taken three grounds of appeal out of which ground no. 1 & 3 are general grounds of appeal which do not call for recording of any specific finding.
3. In ground no. 2, assessee has pleaded that ld. CIT(A) has erred in confirming the addition of Rs. 8,81,938/- which was added by ld. Assessing Officer (in short ‘ld. AO’) with the aid of Section 43B of the Income Tax Act, 1961 (in short the ‘Act’). AO was of the view that GST was not paid by the assessee within the due date and therefore, it is to be disallowed.
4. Ld. Counsel for the assessee while taking us through the record, carefully submitted that ld. AO has disallowed GST payment of Rs. 8,81,938/- on the ground that this amount was not paid by the assessee. The assessee took the matter in appeal and it was contended that the GST was paid before the due date of filing of the return and therefore, it is to be allowed as deduction. He placed on record copies of challan etc. With the assistance of ld. Representative, we have gone through the record carefully. A perusal of the impugned order of ld. CIT(A) would reveal that there is no head & tail in this order. Ld. first Appellate Authority has not considered these submissions of the assessee in an analytical manner. Therefore, we set aside the order of ld. CIT(A) and remit this issue back to the file of ld. first Appellate Authority with the direction that ld. first Appellate Authority would peruse the challans exhibiting the payment of GST before the due date of filing of the return and in case such a factum is found as true, then, deduction is to be allowed to the assessee. With the above observation, appeal of the assessee is partly allowed for statistical purposes.
5. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Kolkata, the 9th June, 2023