Bajaj Staffing Solutions Limited Vs DCIT (ITAT Pune)
Pune ITAT: Gratuity Cannot Be Disallowed Under Section 43B If Paid Before ITR Due Date – Error in Tax Audit Report Can Be Verified
Pune ITAT in Bajaj Staffing Solutions Ltd. v. DCIT dealt with a disallowance of ₹2,22,115 towards gratuity under section 43B for AY 2021-22. The dispute arose from a rectification order under section 154, with the disallowance being sustained by the CIT(A).
The disallowance was made on the ground that the gratuity amount had not been paid before the due date for filing the return under section 139(1). Before the Tribunal, the assessee acknowledged that there was a mistake in the tax audit report, as the correct figure had not been reported in the relevant columns, which resulted in the impugned disallowance.
The ITAT restored the matter to the jurisdictional AO for verification and held that if the assessee establishes that the gratuity was actually paid before the section 139(1) due date, the deduction must be allowed and appropriate relief granted under section 43B. The assessee was also directed to be given reasonable opportunity of hearing.
Thus, the ruling reinforces that an incorrect disclosure in the tax audit report should not by itself result in denial of a legitimate section 43B deduction when actual payment within the statutory time limit can be demonstrated.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee pertaining to A.Y. 2021-22 is directed against the order dated 28.01.2026 of Addl./JCIT(A), Udaipur passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Rectification order passed u/s.154 of the Act.
2. The sole grievance of the assessee is that ld.CIT(A) erred in not deleting the disallowance of Gratuity amount of Rs.2,22,115/- u/s.43B of the Act.
3. We have heard the rival submissions and perused the record placed before us. The only issue relates to disallowance of Gratuity amount of Rs.2,22,115/- for not having been paid before the due date of filing of the return provided u/s.139(1) of the Act. Ld. Counsel for the assesee fairly accepted that there was mistake in the Audit report and correct figure was not mentioned under the relevant columns which has resulted in the impugned disallowance. There is no objection raised by both the sides if the issue is restored to the file of ld. Jurisdictional Assessing Officer for necessary verification.
4. We therefore restore this issue to the file of ld. JAO to carry out necessary verification and if the assessee proves that the Gratuity has been paid before the due date of filing of the return u/s.139(1) of the Act, then the alleged claim should be allowed and necessary relief can be granted as per the provisions of section 43B of the Act. Needless to mention that ld.JAO in the set aside proceedings shall provide reasonable opportunity of hearing to the assessee. Impugned order of ld.CIT(A) is set aside and the grounds of appeal raised by the assessee are allowed for statistical purposes
5. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 07th day of August, 2026.
