Parijat Hotels Private Limited Vs ITO (ITAT Pune)
Section 43B Deduction Cannot Be Lost Due to Inadvertent Non-Claim in Return – ITAT Gives Fresh Opportunity to Verify Property Tax Payment
The Pune ITAT held that a genuine claim under section 43B deserves verification even if it was not specifically claimed in the original return, particularly where the assessee demonstrates that the expenditure had been disallowed in earlier years and was actually paid during the relevant year.
The assessee-company sought deduction of ₹49.24 lakh towards property tax paid to the Pune Cantonment Board. The claim was made through a rectification application under section 154 on the ground that the deduction had inadvertently not been claimed in the return for AY 2021-22 despite actual payment having been made during FY 2020-21. CPC rejected the application, observing that no such claim was made in the original ITR and therefore there was no apparent mistake capable of rectification. The CIT(A) affirmed this view.
Before the Tribunal, the assessee contended that the property tax liability had been suo motu disallowed under section 43B in earlier assessment years and became allowable only upon actual payment during FY 2020-21. It was further explained that due to the disruptions caused during the COVID-19 period and inadvertence, the deduction was omitted from the return before CPC processed it. Supporting documents, including payment receipts from the Pune Cantonment Board and earlier years’ returns, were placed on record.
Considering the peculiar facts and the practical difficulties arising during the COVID period, the Tribunal deemed it appropriate to restore the matter to the Jurisdictional Assessing Officer. The AO was directed to verify whether the property tax had indeed been disallowed in AYs 2018-19 and 2019-20 and whether actual payment was made during FY 2020-21. If the claim was found to be correct, the deduction under section 43B was directed to be allowed.
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 22.08.2025 framed by Addl./JCIT(A)-1, Coimbatore arising out of Rectification Order dated 24.11.2023 passed u/s.154 of the Income Tax Act, 1961 (in short ‘the Act’).
