When on examining CIT was not clear, CPC can not disallow under artificial intelligence

When examining details, CIT(Appeals) was not clear as to nature then expenses cannot be disallowed by CPC under artificial intelligence – ITAT

ABCAUS Case Law Citation:
ABCAUS 3769 (2023) (06) ITAT

In the instant case, the assessee had challenged the order passed by the The National Faceless Appeal Centre (NFAC)/[CIT(A)] sustaining the against the adjustment made by the CPC Bangalore u/s 143(1)(a) of the Income Tax Act, 1961 (the Act) disallowing the claim of expenditure under the head IGST.

The assessee filed his return of income under section 139(1) of the Act. The case of the assessee was that the sum of expenditure in question pertained to IGST. This amount was related to the relevant financial year and was required to be paid by next month of the following assessment year. Therefore, being ascertained liability while filing the return, assessee had claimed it as expenditure. 

While processing the return of the assessee under section 143(1), the Assessing Officer CPC disallowed this claim of the assessee.

The assessee moved a Rectification Petition u/s 154 of the Act which was rejected.

The Tribunal observed that the CIT(Appeals) had not assigned any reason for rejecting the contention of the assessee. Further the CIT(A) recorded a finding that CIT(Appeals) further observed that no details had been given regarding sale/turnover. In other words, he was not sure against which sales, the IGST had been claimed. The CIT(Appeals) observed that it was not clear from the record.

The Tribunal opined that if while examining the issue on the basis of the details, the CIT(Appeals) was not clear in his mind about the nature of expenditure, then it cannot be disallowed by the CPC under the artificial intelligence.

Accordingly, the ITAT allowed the appeal and deleted the disallowance.

Accordingly, the appeal was allowed.

Download Full Judgment Click Here >>

• Empanelment of ICAI Exam observer for January 2027 Examinations. Last date: 20.11.2026
• No arrest under GST- Major decision of 57th Meeting of GST Council held on 8th October 2026
• Later SC ruling cannot render an act done in compliance of a court order a statutory default
• Interest payment on mobilisation advance to NHAI not liable to TDS u/s 194A
• Typographical error in turnover accepted during assessment not a mistake apparent from record