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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI & SHRI SANDEEP SINGH KARHAIL
The present appeal has been filed by the assessee challenging the impugned order dated 20/04/2023, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), Delhi, [“learned CIT(A)”], for the assessment year 2016–17.
In its appeal, the assessee has raised the following grounds:–
“1. In the circumstances and facts of the Assessee's case, the learned Commissioner of Income Tax (Appeals), NFAC has erred in law and on facts in confirming the action of Ld. Assessing Officer in upholding the rectification order u/s 154 on conjectures and surmises which is unwarranted and unlawful despite the fact that learned Assessing Officer has not issued the notice u/s M/s. Gammon Neelkanth Reality Corporation ITA no.2187/Mum./2023 154(3) to the assessee calling for objections to the proposed rectification and instead passed the Order u/s 154 suo moto without providing the Assessee with an opportunity of being heard and hence Order u/s 154 is void-ab-intio since the order u/s 154 has been passed by the learned Assessing Officer against the principles of nature of justice.
2. Without prejudice to the above, in the circumstances and facts of the Assessee's case, the learned Commissioner of Income Tax (Appeals), NFAC has erred in law and on facts in confirming the action of Ld. Assessing Officer in holding the rectification order u/s 154 despite the fact that the Assessee had requested to the learned Commissioner of Income Tax (Appeals), NFAC to keep the appeal for the Asset. Year 2016-17 in abeyance until the disposal of appeal for the Asst. Year 2010-11, Asst. Year 2011-12 and Asst. Year 2012-13 based on which the brought forward loss would be eligible for set off against the income for Asst. Year 2016-17.
Without prejudice to the above, in the circumstances and facts of the Assessee's case, the learned Commissioner of Income Tax (Appeals), NFAC has erred in not directing the Assessing Officer to provide the set off of brought forward losses claimed by the Assessee in its return of income upon successful disposal of appeals of previous years. Upon successful disposal of previous year appeals, the losses would be determinate and the claim of losses made by Assessee in its return of income ought to be allowed.
4. The Appellant crave leave to add, delete or substantiate any grounds of appeal at the time of hearing.”
The only grievance of the assessee is against denial of set-off of brought forward business loss and unabsorbed depreciation.
The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is a builder and developer. For the year under consideration, the assessee filed its return of income on 31/03/2018 declaring a total income of Rs. 2,87,32,420. The return filed by the assessee was selected for scrutiny assessment and vide order dated 24/12/2018 passed under section 143(3) of the Act the business income of the assessee was determined at Rs. 3,49,33,820. Subsequently, it was observed that the assessee has adjusted brought forward business loss of Rs. 3,78,58,412 for the assessment year 2012-13 and unabsorbed depreciation of Rs. 45,72,528
M/s. Gammon Neelkanth Reality Corporation ITA no.2187/Mum./2023 for the assessment years 2008-09 to 2012-13. It was further found that the assessment for the assessment year 2012-13 is completed under section 143(3) read with section 147 of the Act determining the total income of Rs. 1,92,98,510. Accordingly, notice under section 154 of the Act was issued to the assessee to furnish its reply. In the absence of any response from the assessee, the Assessing Officer (“AO”) vide rectification order dated 22/03/2021 passed under section 154 read with section 143(3) of the Act disallowed brought forward business loss of Rs. 3,78,58,412 and unabsorbed depreciation of Rs. 45,72,528 and added the same to the total income of the assessee. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee on this issue. Being aggrieved, the assessee is in appeal before us.
We have considered the submissions of both sides and perused the material available on record. The assessee in its computation of income adjusted brought forward business loss of Rs. 3,78,58,412 for the assessment year 2012-13 and the unabsorbed depreciation of Rs. 45,72,528 for the assessment years 2008-09 to 2012-13. As per the Revenue, the brought forward business loss and unabsorbed depreciation claimed by the assessee were not available for carry forward and set off as the income of the assessee for the assessment year 2012-13 was assessed at Rs. 1,92,90,510. On the other hand, it is the claim of the assessee that for the assessment years 2008- 09 and 2009-10 unabsorbed depreciation eligible for being carried forward and set off has been determined, while for the assessment years 2010-11 to 2012- 13, assessee’s appeals against the assessment orders are currently pending
M/s. Gammon Neelkanth Reality Corporation ITA no.2187/Mum./2023 disposal before the learned CIT(A). During the hearing, it was also submitted that the assessee did not receive any notice issued under section 154 of the Act by the AO, and further before the learned CIT(A) the assessee specifically requested to keep the appeal in abeyance until the disposal of appeal for the assessment years 2010-11 to 2012-13. During the hearing, the learned AR referred to page no. 6 of the paper book in support of its submission that set off of brought forward business loss of Rs. 3,78,58,412 for the assessment year 2012-13 and unabsorbed depreciation of Rs. 45,72,528 for the assessment years 2008-09 to 2012-13 was rightly claimed by the assessee. In view of the facts and circumstances as noted above, we deem it appropriate to restore this issue to the file of the AO for de novo adjudication as per law after necessary verification of the details as may be submitted by the assessee. The assessee is directed to substantiate its claim of availability of brought forward business loss and unabsorbed depreciation from earlier years for being set off in the year under consideration. Needless to mention no order shall be passed without affording reasonable opportunity of being heard to the assessee. As a result, the impugned order is set aside and the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 09/10/2023