Auditor Inadvertently Shown Wrong Disallowance Sum u/s 43B of Income Tax Act in Audit Report uploaded on Income Tax Portal: ITAT directs re-adjudication [Read Order]

The Income Tax Appellate Tribunal (ITAT) Kolkata Bench directed readjudication on reason of auditor inadvertently shown wrong disallowance sum under Section 43B of Income Tax Act, 1961  in audit report uploaded on Income Tax Portal.

The assessee, Nine Star Commodities Private Limited, filed the appeal against the order of the National Faceless Appeal Centre. The grievance of the assessee was that Commissioner of Income Tax (Appeal) [CIT(A)] erred in confirming the disallowance made under Section 43B of the Income Tax Act. 

Subhas Agarwal, the counsel representing the taxpayer, argued that the payment in question was made prior to the deadline for filing the income tax return as specified in Section 139(1) of the Income Tax Act.

However, in the tax auditor's report, the said amount was mistakenly mentioned in the incorrect column, which is typically reserved for expenses falling under the category specified in Section 43B of the Income Tax Act. These expenses are disallowed if they were not paid before the due date for filing the income tax return as stated in Section 139(1) of the Income Tax Act.

The disallowance made based on the above observation. All the alleged sum has been paid before the due date of furnishing the return of income. The CIT(A) in the absence of the certificate from the auditor did not allow the claim of the assessee.

Abhijit Datta, counsel appeared for the revenue.

The tribunal while considering the appeal admitted the submission of the assessee and restored the issue of disallowance made under Section 43B of the Income Tax Act to the file of the jurisdictional Assessing Officer .

Further, directed that the assessee should file details of proof of payment showing that the said liability has been paid off before the due date of furnishing of return of income under Section 139(1) of the Income Tax Act and also produce the certificate from the auditor who made the inadvertent mistake in the audit report uploaded on the income tax portal.

Therefore, a single  member bench of Manish Borad (Accountant Member) allowed the appeal filed by the assessee.

To Read the full text of the Order CLICK HERE

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