| The Tax Publishers2020 TaxPub(DT) 0844 (Bang-Trib) INCOME TAX ACT, 1961
Section 43B
Where service tax collected by the assessee was not paid to the Government exchequer before the due date of filing of return, the same was to be disallowed, though it was not charged to the profit and loss account and it attracts the provisions of section 43B and the present provisions of section 145A cannot be applied in view of non obstante clause in section 43B.
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Business disallowance unders ection 43B - Tax, cess duty, etc - Service tax not paid before due date of filing return and also not charged to P&L A/c -
Assessee had collected an amount of Rs. 48,82,245 as service tax and not remitted the same to the Government exchequer, before the due date of filing of the return of income. As such, the issue was whether the provisions of section 43B applies to service tax, which was not paid before the due date of filing of the return. The AO concluded the assessment by determining the total income by disallowing service tax collected by the assessee under section 43B. Commissioner (Appeals), confirmed the order of the AO. Held: Even the service tax was liability which covers under section 43B and non-payment of the same within the stipulated time as specified under section 43B attracts disallowance. Now the question was that when the assessee had not claimed it as expenditure in the profit and loss account, could it be disallowed under section 43B. The service tax collected by the assessee and not paid to the Government exchequer before the due date of filing of return, is to be disallowed, though it was not charged to the profit and loss account and it attracts the provisions of section 43B and the present provisions of section 145A cannot be applied in view of non obstante clause in section 43B. However, the assessee raised an alternative plea that it should be allowed on actual payment in the assessment year in which it was actually paid. This Bench of Tribunal does not accept this plea of the assessee and directed accordingly.
Followed:Tribunal in the case of M/s. Jain Christopher v. DCIT in ITA No. 855/Bang/2012, Order, dated 12-4-2013, Chowringhee Sales Bureau (P.) Ltd. v. CIT (1973) 87 ITR 542 (SC) : 1973 TaxPub(DT) 363 (SC) and Hemkunt Infratech (P) Ltd. v. DCIT [ITA No. 6683/Del/2017, Order, dated 23-3-2018] : 2018 TaxPub(DT) 2021 (Del-Trib). Relied:Hemkunt Infratech (P) Ltd. v. Deputy Commissioner of Income Tax [ITA No. 6683/Del/2017, Order, dated 23-3-2018] : 2018 TaxPub(DT) 2021 (Del-Trib), Bartronics India Ltd. v. Asstt. CIT [ITA No. 2188/Hyd/2011 & ITA No. 2189/Hyd/2011, Order, dated 31-5-2012] : 2012 TaxPub(DT) 2496 (Hyd-Trib). Distinguished: CIT v. Noble & Hewitt (I) (P) Ltd. (2008) 166 Taxman 48 (Delhi) : 2008 TaxPub(DT) 983 (Del-HC), Pharma Search v. ACIT (2012) 21 Taxmann.com 44 (Mum.) : 2012 TaxPub(DT) 2445 (Mum-Trib) and CIT v. Knight Frank (India) (P) Ltd. (2016) 72 Taxmann.com 300 (Bom) : 2016 TaxPub(DT) 3794 (Bom-HC). (iv) Shri N.R. Kumaraswamy v. ACIT [ITA No. 1778/Bang/2017, Order, dated 31-5-2018] (v) Envision Enterprise Solutions (P.) Ltd. v. ITO [ITA No. 315/Hyd/2016, Order, dated 12-8-2016] (vi) CIT v. Vatika Township (P.) Ltd. (2014) 49 taxmann.com 249 (SC) : 2014 TaxPub(DT) 3934 (SC)
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