Law:

Section:

Section 43B, read with section 139, of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment - Assessment year 1988-89 - Whether when neither penalty can be imposed nor any other such negative consequences can follow assessee by reason of filing his returns late, so long as there is an extended period of time granted or deemed to be granted by Assessing Officer, all acts done within extended period must be deemed to have been done within prescribed period of time as originally stipulated - Held, yes - Whether where time for filing return is extended in terms of proviso to section 139(1), it automatically means extension of due date for purpose of section 43B - Held, yes - Whether, thus, sales tax paid within extended time for filing return cannot be disallowed under section 43B - Held, yes FACTS The assessee was required to file return for the year ending 31-3-1988 by 31-7-1988. He, however, filed an application on 29-7-1988 praying for extension of time up to 30-9-1988 to file the return and that request was accepted by the Assessing Officer. During the assessment proceedings while scrutinizing the return the Assessing Officer noticed that the assessee had not paid the sales tax within time. The assessee's stand was that the sales tax had been paid within extended time allowed for filing of return and, therefore, no disallowance could be made under section 43B. The Assessing Officer did not accept the assessee's plea and made disallowance under section 43B. On appeal, the Commissioner (Appeals) upheld the order of the Assessing Officer. On second appeal, the Tribunal held that if the amount of sales tax stood paid within the extended period as granted by the Assessing Officer, then the amount could not be disallowed. Consequently, the Tribunal directed the Assessing Officer to verify the payment of outstanding sales tax, and if that stood paid by the assessee within the extended period of time for filing return, then not to make the addition on that account to the total income of the assessee. On the revenue's appeal : HELD It has already been held in Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677/ 91…

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