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Issues:
Rectification of assessment under section 154 based on disallowance under section 43B of the Income Tax Act. Analysis: In the assessment under section 143(1)(a), the Assessing Officer added back a sum of Rs. 3,65,587 as a prima facie adjustment, including amounts for Sales Tax, Bonus, E.S.I., and Profession Tax, disallowed under section 43B due to lack of evidence of payment. The assessee filed a petition under section 154, claiming that the amount was paid within the prescribed period and provided an audit certificate and receipts as evidence. However, the Assessing Officer rejected the rectification, stating the evidence was not furnished with the return. The CIT(A) upheld this decision. Upon appeal to the ITAT, the assessee argued that since the outstanding amount was not claimed as a deduction, there was no basis for the prima facie adjustment under section 43B. Citing various judgments and circulars, the assessee contended that evidence for payment could be submitted with the rectification application, as per CBDT circulars. The Departmental Representative supported the lower authorities, arguing that the disallowance was justified under section 43B due to lack of evidence at the time of filing the return. The ITAT analyzed the circulars issued by the CBDT regarding rectification under section 154 vis-a-vis section 143(1)(a) and section 43B. The circulars clarified that evidence for payments mentioned in section 43B could be submitted with the rectification application. In this case, the audit certificate and receipts were provided with the rectification application, as confirmed by the Assessing Officer's observations. Therefore, the ITAT held that the Assessing Officer should have rectified the assessment by deleting the disallowance under section 43B. The appeal was allowed in favor of the assessee.
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