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Income Tax Appellate Tribunal, JAIPUR BENCH ‘A’, JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1358/JP/2018
PER VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 26TH September, 2018 of ld. CIT (Appeals), Ajmer for the assessment year 2010-11. The assessee has raised the following grounds of appeal :-
“ 1. That the disallowance of Appeal for claiming carrying forward the losses of earlier assessment years in the A.Y. 11-12 was without appreciating the full facts & circumstances of the case.
2. That as the operation of Banks stopped by RBI & official liquidator appointed by dismissing the Board of Directors, there was quite reasonable cause for non-filing return in time & no auditors were appointed for A.Y. 10-11, 11-12 & only on the basis of 1st notice issued u/s 142(1) the return was filed within 30 days for date of notice in compliance thereof and hence cannot be treated as delayed.
That E-filing return was mandatory for Companies & not for Cooperative Society registered under Cooperative Act & hence the manual return filed within time was not invalid return as alleged by AO hence if treated it as Valid return the return was in time in pursuance to notice u/s 142(1) of IT Act.
That the order is bad in law. The order of AO was also time barred from date of original assessment.
That the assessee reserved his rights to add, amend or alter any of the grounds on or before the date of hearing.”
None has appeared on behalf of the assessee despite repeated notice issued through RPAD. Since the assessee has gone into liquidation and a Liquidator has been appointed but there is no response to the notices issued by the Registry, accordingly we propose to hear and dispose off the appeal ex parte. We have heard the ld. D/R and considered the relevant material on record.
3. The assessee is a cooperative bank and already gone into liquidation. The assessee did not file any return of income under section 139(1) of the IT Act. The AO issued a notice under section 142(1) of the IT Act calling for filing of the return of income. In response to the said notice, the assessee filed the return of income for the year under consideration on 14th February, 2013 declaring loss of Rs. 4,22,69,957/-. The assessee has also shown brought forward losses of earlier years at Rs. 6,88,16,095/-. The AO treated the return filed by the assessee as invalid for want of e-filing. Accordingly, the AO passed the assessment order dated 24.11.2017 under section 143(3) read with section 147 at NIL income by disallowing the claim of carry forward of loss of the current year as well as brought forward losses of the preceding years. The relevant part of the finding of the AO is as under :-
“ From the above submission as well as the position discussed above it is obvious that the assessee bank is not entitled to carry forward its any of yesteryears’ losses for the reason it has not filed any valid return for A.Y. 2010-11 in time 139(3) of the I.T. Act and that makes the assessee bank deprived of carrying forward its any of loss of yesteryears to assessment year 2011-12 & onwards, under the provisions of section 80 of I.T. Act. Hence, the assessee has incorrectly claimed the brought forward losses in the return filed for A.Y. 2011-12 and the same is held unlawful and the loss of the assessment year 2010-11 to be carried forward is treated as Nil. With the above remarks, the income of the assessee bank is assessed at Nil against the claimed current loss of Rs. 3,57,02,757/- and no loss including this current loss is allowed to be carried forward in subsequent years.”
The assessee challenged the action of the AO before the ld. CIT (A) by filing the appeal through the Liquidator. However, the ld. CIT (A) has confirmed the order of the AO by holding that the assessee has not filed the return of income before the due date prescribed under section 139(1) of the Act. As far as the carry forward of loss of current year is concerned, since the assessee has not filed the return of income under section 139(1) of the Act, therefore, the said claim of the assessee has been rightly rejected by the AO. However, the brought forward losses of the earlier years cannot be denied on the ground of belated return because the assessee has not claimed any set off of brought forward losses due to the loss for the year under consideration. Accordingly, the brought forward of earlier years’ losses has to be set off as per the provisions of section 72 of the IT Act and, therefore, the order of the AO in denying the said claim is not justified. Accordingly, in the facts and 4 The Ajmer Urban Cooperative Bank Ltd., Ajmer. circumstances of the case, we set aside the orders of the authorities below qua the issue of brought forward losses of earlier years. 4. In the result, appeal of the assessee is partly allowed.
Order pronounced in the open court on 08/08/2019. Sd/- Sd/- ¼ fot; iky jkWo ½ ¼foØe flag ;kno½ (Vikram Singh Yadav) (VIJAY PAL RAO) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 08/08/2019. das/ आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant-The Ajmer Urban Cooperative Bank Ltd., Ajmer. 2. izR;FkhZ@ The Respondent-The ACIT, Circle-1, Ajmer. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File {ITA No. 1358/JP/2018} vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत