Notice of Adjustment of Disallowance under Section 43 B

This query is : Resolved

CA KIRAN LONDHE (Querist)
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20 May 2022 In form 3cd , while filing
26 (i)B was incurred in the previous year and was
26 (i)(B)(a) Paid on or before the due date for furnishing the return of income of the previous year under section 139(1)
S.No. Section Nature of liability Amount
1 Sec 43B(a)-Tax,Duty,Cess,Fee etc Professional Tax payable 64401
2 Sec 43B(a)-Tax,Duty,Cess,Fee etc TDS payable 651201

This expenses has been disallowed even though is has been paid before due date and refund got adjusted against liability .
Does anyone faced similar issue , what measures taken

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 July 2024 It seems like you're dealing with disallowed expenses in your Form 3CD filing, specifically related to payments made before the due date but still disallowed. Here’s how you might address this issue:

### Understanding the Disallowance
- **Section 43B**: This section mandates that certain payments (like taxes, duties, etc.) must be paid on or before the due date of filing the return under Section 139(1) to be eligible for deduction.
- **Your Scenario**: You have paid Professional Tax and TDS before the due date but are facing disallowance.

### Potential Causes of Disallowance
1. **Incorrect Timing**: Ensure that the payments were made before the due date specified under Section 139(1). Sometimes, discrepancies in dates can lead to disallowances.

2. **Documentation**: Verify if the documentation and proof of payment were correctly submitted along with Form 3CD. Proper receipts, challans, or other payment proofs are essential.

3. **Adjustment Against Refund**: In your case, if the refund was adjusted against the liability, ensure that this adjustment is clearly documented and presented to the assessing officer.

### Steps to Resolve the Issue
1. **Review the Disallowance**: Carefully review the reason for disallowance provided by the assessing officer in the scrutiny notice or communication.

2. **Document Verification**: Double-check all payment receipts, challans, and proofs to ensure they comply with Section 43B requirements.

3. **Response Preparation**: Prepare a detailed response explaining:
- The dates of payment and how they align with Section 139(1) requirements.
- Provide copies of receipts and payment proofs.
- Clarify the adjustment against refund if applicable, emphasizing that it does not affect the eligibility under Section 43B.

4. **Consultation**: If needed, consult with a tax advisor or CA who specializes in such matters to ensure your response is comprehensive and legally sound.

### Submission and Follow-Up
- **Submission**: Submit your detailed response along with supporting documents to the assessing officer within the stipulated timeframe.
- **Follow-Up**: Follow up with the assessing officer to ensure they have received your response and to address any further queries they may have.

### Conclusion
By addressing these points systematically and providing clear documentation, you can effectively contest the disallowance of expenses under Section 43B in your Form 3CD filing. If you find discrepancies or are unsure about the process, seeking professional advice can be beneficial to ensure compliance and resolve the issue effectively.