REGARDING RECTIFICATION U/S 154 OF INCOME TAX ACT

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This discussion explores the possibility of filing a second rectification under Section 154 of the Income Tax Act for an assessment year 2018-19. The individual initially faced a disallowance for unpaid GST liability, which was later paid. Despite subsequent demand notices and a first rectification, the assessee was unaware of the order. The query questions the validity and timeliness of a second rectification, and whether an appeal is still possible to address the demand based on actual payment.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)

28 March 2024 IF MR.X HAS FILED REGULAR RETURN U/S 139(1) FOR A.Y.2018-19 AS ON 31/10/2018 FOR WHICH INTIMATION LETTER WAS RECEIVED AS ON 26/04/2019 UNDER WHICH DISALLOWANCE UNDER SECTION 43B WAS MADE FOR GST LIABILITY NOT PAID BEFORE REGULAR FILING OF RETURN.
AFTERWARDS MR.X HAS PAID THE GST LIABILITY BUT DEMAND WAS MADE AGAINST SUCH RETURN.
NOW MR.X HAS FILED RECTIFICATION OF RETURN U/S 154 AS ON 06/06/2023 AND PROCEESED AS ON 05/10/2023 BUT SUCH ORDER WAS NOT KNOWN TO ASSESSE AND APPEAL WAS NOT FILED AGAINST SUCH ORDER.
NOW MR.X HAS AGAIN FILED RECTIFICATION U/S 154 AS ON 31/01/2024
SO, WHETHER SUCH SECOND RECTIFICATION CAN BE FILED? WHTHER IT IS WITHIN TIME LIMIT?
IF YES ASSESSE SHOULD WAIT FOR SUCH RECTIFICATION TO BE PROCESSED TO FILE APPEAL AGAINST SUCH ORDER?
OR IS THERE ANY OTHER OPTION TO FILE APPEAL FOR SUCH ASSESSMENT YEAR?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

29 March 2024 Such payment should be claimed in the year of payment.
Rectification is not the right option it will not be accepted.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)

29 March 2024 Now whether there is any option to nullify such demand or file appeal against such demand for stating the fact that actual payment was made?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

29 March 2024 No option to nullify the demand.

Section 43B of the IT Act mandates the allowability of various expenses only on a payment basis, irrespective of the fact that the assessee follows a mercantile system of accounting. In the cash method, the revenues and expenses are recognized only when cash is received or paid out respectively.

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