The Income Tax Appellate Tribunal (ITAT) Bangalore Bench held that payment of bonus made to employees before the due date of filing return of income under Section 139(1) of Income Tax Act, 1961 are sufficient for compliance of section 43B of Income Tax Act .
The assessee Mala Anand is an Individual, having income from business and income from other sources.
After filing the return of the income assese return has been processed by the Centralized Processing Centre (CPC) of the Income Tax Department. The Assessing Officer (AO) has passed the order under Section 143(1) of the Income-Tax Act . While doing so, AO disallowed Rs. 10,79,683/- being provision for bonus to employees under Section 43B of the Income Tax Act based on the tax audit report.
Aggrieved by the order, the assessee filed an appeal before the National Faceless Appeal Center {NFAC)} who upheld the order. Thus the assessee filed a second appeal before the tribunal.
Before the bench, Prakash Sridhar Hegde, counsel for assessee submitted that sums have been paid before the due date for filing of return under Section 139(1) of the Income-Tax Act and should be allowed .
Priyadarshini Besaganni,Counsel for revenue According to the Tax Audit Report filed in Form 3CD at clause 26B(b) contents that that Bonus payable has not been paid on or before the due date for filing of return of income under Section 139(1) of theIncome-Tax Act and is clearly reported as disallowable under Section 43B of the Income-Tax Act based on which the disallowance was to made by under Section 143(1) of the Income-Tax Act.
After reviewing the facts and submission, the two member bench of the tribunal comprising Dr. B.R.R.Kumar, (Accountant Member) and Kul Bharat, (Judicial Member) observed that since the amount of bonus to employees has been paid before due date of filing of return of income under Section 139(1) of the Income-Tax Act and this is sufficient compliance of provisions of section 43B of the Income-Tax Act.
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