Corporate Professional Today – October 20, 2018

October 20 To October 26, 2018 u Taxmann’s Corporate Professionals Today u Vol. 43 u (^15373)
(a) was available when financial statements
for those periods were approved for
issue; and
(b) could reasonably be expected to have
been obtained and taken into account
in the preparation and presentation of
those financial statements.
2.3 Provision under Income-tax Act, 1961 - As
per the Income-tax Act, 1961, every taxpayer
is required to compute the income during
the previous year. The prior period expenses
pertaining to the earlier years has been a
matter of litigation whether such expenses
could be allowed as deductions during the
current year.
The said omission/mistake, however, may
either be corrected in the computations of
Income Tax Return for the current financial
year, if the return is still pending, or be
rectified by revising the Income Tax Return
of that previous year on or before the due
date for submission of revised return as per
Income Tax Act (i.e., on the last date of the
assessment year).
Causes of errors

3. Errors found during a current period,
   which are related to the prior periods, may
   arise due to following reasons:

(i) Delay in accounting for purchases and
expenses due to approval of concerned
officer or otherwise

(ii) Mathematical mistakes

(iii) Omissions

(iv) Internal procedural delays in accounting

(v) Mistakes in the application of accounting
policies

(vi) Misinterpretation of facts

(vii) Oversights

4. Relevant provision under CGST Act,
   2017
   4.1 Section 16(4) of the CGST Act, 2017 - “A
   registered person shall not be entitled to take
   input tax credit in respect of any invoice or
   debit note for supply of goods or services
   or both after the due date of furnishing of
   the return under section 39 for the month of
   September following the end of financial year
   to which such invoice or invoice relating to
   such debit note pertains or furnishing of the
   relevant annual return, whichever is earlier.”
   Therefore, input tax credit pertaining to
   any tax period of the year 2017-18 could be
   claimed latest in the return in Form GSTR-
   3B for the month of September 2018, whose
   due date of furnishing is 20 October, 2018.

Treatment of errors

5. The treatment of errors under GST or
   books of Account will be different for each
   and every scenario. Let us understand the
   treatment of errors through illustrations.
   Mr. A supplies goods worth 11,800 [ plus GST @ 18%] to Mr. B in February 2018. In this illustration we will take two scenarios, i.e., the treatment of prior period expenses and prior period incomes. 5.1 Prior Period Expense: 5.1-1 Under Reporting of ITC - Mr. B omits to book such expense in his books of account in February 2018 and such error is detected in the financial year 2018-19. There will be different treatments of errors detected in the different months of the financial year, which are as follows: 5.1-1-1 ERRORS DETECTED IN, SAY, AUGUST 2018:- u In GST: The ITC of 1,800 will be
   allowed and shall be availed and re-
   ported in the return in Form GSTR-3B
   for the month of August 2018.

PriOr PeriOd exPenses - gsT PersPeCTiVe