SARAVANAN,PUDUCHERRY vs. ITO, CRICLE-1,, PUDUCHERRY

ITA 764/CHNY/2026Status: DisposedITAT Chennai08 June 2026AY 2018-194 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the AO had erroneously checked AY 2016-17 instead of AY 2017-18, from which the loss was actually carried forward. The Tribunal directed the AO to allow the set off of the brought forward loss from AY 2017-18.

What were the facts?

The assessee claimed to set off brought forward house property loss of Rs. 6,75,684/- for AY 2018-19. The AO denied this, believing there was no brought forward loss, by examining AY 2016-17. The CIT(A) upheld the denial, stating the assessee failed to provide sufficient evidence for the loss carried forward from AY 2017-18.

What were the issues?

Whether the denial of set off of brought forward house property loss was justified when the AO relied on incorrect assessment year records and the assessee provided evidence at the appellate stage.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI

Before: SHRI SS VISWANETHRA RAVI & MS. PADMAVATHY.S

For Respondent: Mr. L.Christopher Vasanth, JCIT

आदेश / O R D E R

PER PADMAVATHY.S, A.M: This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 18.08.2025 for Assessment Year (AY) 2018-19. The only issue contended by the assessee pertains to denial of set off of brought forwarded loss from house property.

ITA No.764/Chny/2026 Saravanan :- 2 -: 2. The assessee is an individual and filed the return of income for AY 2018-19 on 11.06.2018 declaring total income of Rs.4,93,840/- after setting off of the brought forward house property loss to the tune of Rs. 6,75,684/-. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The A.O denied the set off of loss claimed by the assessee stating that the assessee does not have any brought forward loss. Aggrieved, the assessee filed further appeal before the CIT(A). Before the CIT(A), the assessee submitted that the A.O has considered AY 2016-17 to hold that the assessee does not have brought forward loss whereas the assessee has brought forward loss from AY 2017-18 which has been set off against the income for AY 2018-19 i.e., the year under consideration. The CIT(A) however denied the set off by holding that: “5.1.1 The central issue revolves around the admissibility of the set-off of brought forward loss under the head 'Income from House Property' amounting to Rs. 6,75,684/-in AY 2018-19. 5.1.2 It is noted from the assessment order that during the scrutiny of the return for AY 2018-19, the AO verified the availability of brought forward losses from previous years. The AO specifically examined AY 2016-17 from which year the appellant was claiming to carry forward losses. However, the assessment order for AY 2016-17 clearly shows that no such loss was determined or allowed to be carried forward. The disallowance of set-off in AY 2018-19 was based on this verifiable fact. 5.1.3 The appellant now contends that the loss was actually carried forward from AY 2017-18 and not AY 2016-17. However, this claim is being made at the appellate stage and does not find any mention in the original submissions during assessment proceedings. Further, the appellant has not furnished sufficient or credible documentary evidence to establish that the loss of Rs. 8,03,598/- was assessed and allowed to be carried forward in the intimation or order for AY 2017-18. A mere copy of an intimation u/s 143(1) does not conclusively establish the quantum or admissibility of carried forward loss unless supported by return and computation of Income. 5.1.4 It is also pertinent to note that the action taken by the AO is based on assessment records, and there is no indication that the carried forward loss was ever accepted in a prior assessment. The burden of

ITA No.764/Chny/2026 Saravanan :- 3 -: proof to substantiate the claim of set-off lies with the appellant, which remains unfulfilled in this case. 5.1.4 Therefore, the action of the AO in disallowing the claim of set-off of loss under the head 'Income from House Property' is in accordance with law and based on factual verification of assessment records. The grounds raised by the appellant are found to be devoid of merit and are accordingly dismissed.”

There is a delay of 107 days in filing the appeal and the assessee filed an affidavit along with the petition for condonation of delay. Having heard both the parties and perused the material on record, we are of the view that there is a reasonable and sufficient cause for the delay in filing the appeal before the Tribunal. Therefore following the Hon’ble Supreme Court decision in the case of Collector, Land Acquisition Vs. MST.Katiji & Ors., (167 ITR 471) (SC) we condone the delay in filing the appeal and admit the appeal for adjudication.

We have heard the parties, and perused the material available on record. During the course of hearing, the Ld. Authorized Representative (AR) of the assessee submitted the income tax returns and the statements of computation for AYs 2017-18 and 2018-19. From the perusal of the computation statement for AY 2017-18, we notice that the assessee had loss from house property to the tune of Rs.8,03,598/- which has been carried forward as unabsorbed loss. We further notice from the perusal of the computation for AY 2018-19 that the assessee has earned income of Rs.6,75,684/- from the house property and the brought forward house property loss to this extent is set off while filing the return of income. We also notice from the order of the A.O that the A.O has erroneously verified the assessment records for AY 2016-17 to hold that the assessee is not having any brought forward loss whereas the assessee claimed the set off out of the loss brought forwarded from AY 2017-18. The CIT(A) has denied the set off for

ITA No.764/Chny/2026 Saravanan :- 4 -: the reason that the assessee did not furnish the details during the assessment proceedings without appreciating the fact that the assessee has made the submissions along with relevant documentary evidences before the CIT(A). In view of this discussions and considering the facts, we are of the view that the lower authorities are not correct in denying the benefit of set off of loss on the ground as recorded in their orders. We therefore direct the A.O to allow the set off of brought forward loss from AY 2017-18 in the year under consideration.

In the result, the appeal of the assessee is allowed.

Order pronounced on 08th day of June, 2026 at Chennai.

Sd/- Sd/- (यस यस िव�ने� रिव) (पदमावती यस) (SS Viswanethra Ravi) (Padmavathy.S) लेखा सद�य सद�य /Accountant Member �याियक �याियक सदस् �याियक �याियक लेखा लेखा लेखा सद�य सद�य सदस्य / Judicial Member सदस् सदस् चे�नई/Chennai, �दनांक/Dated: 08th June, 2026. EDN, Sr. P.S आदेश क� �ितिल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकर आयु!/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF Digitally signed by EJTADA DURGA EJTADA DURGA NARESH NARESH Date: 2026.06.16 12:43:14 +05'30'

Recent GST High Court judgments

Search GST case law →