2023 (5) TMI 911 - AT - Income Tax

Addition u/s 43B - Disallowance in the intimation issued u/s 143(1) - unpaid tax liability on account of GST as disallowed by the Auditor in form 3CD u/s 43B - HELD THAT - Admittedly the assessee did not file the Audited Financial statement before the Ld.CIT(A). Undisputed fact is this that the assessee has furnished the necessary item of profit loss account in the return filed online along with the tax audit report. However based on tax audit report the disallowance was made under the provision of section 143(1) of the Act. CIT(A) before rejecting the claim of the assessee should have referred the details furnished by the assessee in the income tax return before reaching to the conclusion that there was no detailed furnished by the assessee whether the amount of GST was routed through P L account - in the interest of justice and fair play we are inclined to give one more opportunity to the assessee to furnish the necessary details - matter is set aside to the file of the AO for fresh adjudication as per the provision of law. Decided in favour of assessee for the statistical purposes.

Summary

Issues involved:
The judgment involves appeals by the Assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi regarding assessment orders under s. 143(1) of the Income Tax Act, 1961 for the Assessment Years 2018-2019 & 2020-21.

Issue 1: Appeal for AY 2018-19
The Assessee challenged the addition of Rs. 12,72,305 under section 43B of the Act, disallowed in the intimation issued under section 143(1) of the Act. The Assessee contended that the liability on account of GST was not passed through the profit & loss account but routed through the balance sheet. The CIT(A) upheld the addition, stating that the Assessee failed to provide evidence that the GST amount was not debited in the profit & loss account. However, the Assessee requested to set aside the issue to the AO, offering to submit audited financial statements to prove the claim. The Tribunal agreed to give the Assessee another opportunity to furnish necessary details and set aside the matter to the AO for fresh adjudication.

Issue 2: Appeal for AY 2020-21
The issue raised by the Assessee for AY 2020-21 mirrors the one for AY 2018-19. The Tribunal decided that the findings for AY 2018-19 would also apply to AY 2020-21. As the grounds of appeal were identical, the appeal for AY 2020-21 was allowed for statistical purposes, following the decision made for AY 2018-19.

In conclusion, both appeals by the Assessee were allowed for statistical purposes, and the matters were set aside to the AO for fresh adjudication in light of the Assessee's submission of audited financial statements.