HELIOS WORLD WIDE,BENGALURU vs. INCOME TAX OFFICER, WARD NO; 4(3)(3)., BENGALURU

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ITA 2062/BANG/2025Status: DisposedITAT Bangalore21 August 2026AY 2019-205 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee claimed to have filed necessary details and submissions before the CIT(A) which were allegedly not considered. Therefore, the matter was restored to the CIT(A) for fresh adjudication on merits.

What were the facts?

The assessee, a partnership firm, did not file its return of income for AY 2019-20. The case was reopened under section 147, and the assessee claimed set-off of previous years' losses against interest income. The AO disallowed the set-off, and the CIT(A) confirmed it for lack of evidence.

What were the issues?

Whether the CIT(A) erred in confirming the disallowance of set-off of previous years' losses without considering the assessee's submissions and evidence.

Which sections of the Income-tax Act were involved?

Section 147,Section 250,Section 148,Section 194A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: WASEEM AHMED & KESHAV DUBEY

PER WASEEM AHMED, ACCOUNTANT MEMBER:

The present appeal filed at the assessee instance is directed against the order of the learned Commissioner of Income Tax (Appeals) under the National Faceless Appellate Centre (hereafter the Ld. CIT-A) for the Assessment Year 2019-20, passed under section 250 of the Income Tax Act, 1961 (hereafter the Act).

2.

The assessee in the appeal memo has raised multiple grounds, numbered as Ground Nos. 1 to 7. The issues raised through Grounds Nos. 1 to 3 are legal grounds challenging the validity of the notice issued under section of the Act and consequent assessment proceedings under section 147 of the Act.

3.

At the outset, we note that the learned AR before us submitted that the issues raised in Ground Nos. 1 to 3 are not pressed. Hence, the same are hereby dismissed accordingly as not pressed.

3.1 The interconnected issue raised by the assessee in Grounds Nos. 4 to 6 is that the learned CIT(A) erred in confirming the disallowances of setoff of previous years' losses of Rs. 8,69,544/- only.

3.2 The necessary facts are that the assessee, a partnership firm, is engaged in the business of wholesale trading of travel bags and related accessories. The assessee for the year under consideration did not file its return of income. The case was reopened by issuing a notice under section 148 of the Act, based on the information available with the department that the assessee had earned interest income of Rs. 8,67,691/- only on which TDS under section 194A of the Act was deducted.

3.3 In response to the notice issued under section 148 of the Act, the assessee filed a return of income declaring total income at NIL after claiming setoff of brought forward losses of the previous year. On verification of the previous assessment year's return, the AO noted that the assessee had carried forward losses that had to be set off against subsequent years' income. Still, the AO did not allow set-off of brought- forward losses of the previous assessment year against the income of the year under consideration. The AO held that the losses and carried forward losses cannot be computed in the reassessment proceedings under section 147 of the Act.

4.

The aggrieved assessee preferred an appeal before the learned CIT(A) and, in the statement of facts submitted, stated that it incurred a loss of Rs. 13,75,856/- in the previous assessment year 2018-19. Thereafter, it closed its business. During the year under consideration, it earned interest income of Rs. 8,67,691/- from the loans and advances given. As the income for the year under consideration was fully set off against the A.Y. 2018-19 losses, no return of income was filed.

4.1 However, the learned CIT(A) confirmed the disallowances made by the AO, holding that the necessary details and evidence of carried-forward losses from the previous assessment years were not provided despite a specific notice being issued in this respect.

5.

Being aggrieved by the order of the learned CIT(A) the assessee is in appeal before us.

6.

The learned AR before us filed paper book volume-I, running from pages 1 to 66, and paper book volume-II, running from pages 1 to 233. The learned AR submitted that during the appellate proceeding before the learned CIT(A), the assessee filed all the details, including written submissions. The learned AR, in this respect, drew attention to pages 36 to 51 of the paper book, Volume I, where a copy of the hearing notice under section 250 dated 03-03-2025 & 18-03-2025, along with the assessee's reply dated 24-03-2025 and written submission, are placed. However, the learned CIT(A) did not consider the same.

7.

On the other hand, the learned DR supported the lower authorities' findings. The learned DR further expressed no objection to restoring the issue to the file of the learned CIT(A) for fresh adjudication.

8.

We have heard the rival contentions of both the parties and perused the materials available on record. The issue relates to the assessee’s claim for set-off of brought-forward loss of Rs. 8,69,544/-. The AO denied the claim on the ground that the losses and carried-forward losses could not be computed in the reassessment proceedings u/s 147 of the Act. The Ld. CIT(A), however, confirmed the disallowance on the ground that the assessee had not furnished the necessary details and evidence in support of the brought-forward losses.

8.1 Before us, the Ld. AR has drawn our attention to the materials placed in the paper book and submitted that the assessee had, in fact, filed its reply and written submissions before the Ld. CIT(A), but the same were not considered while deciding the appeal. The relevant notices, reply dated 24.03.2025 and written submissions are stated to be placed at pages 36 to 51 of Paper Book Volume-I.

8.2 Considering these facts, we are of the view that the assessee’s claim requires fresh examination after proper consideration of the details and evidence already furnished and such further evidence as may be necessary. We therefore set aside the finding of the Ld. CIT(A) on this issue and restore the matter to his file for fresh adjudication on merits. The Ld. CIT(A) shall examine the assessee’s claim of brought- forward losses and their availability for set-off in accordance with law, after considering all the relevant materials and providing reasonable opportunity of being heard to the assessee. The assessee is also directed to furnish the necessary details and cooperate in the proceedings. Accordingly, Ground Nos. 4 to 6 are allowed for statistical purposes.

9.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 21st August, 2026

Sd/- Sd/- KESHAV DUBEY WAS EEM AHMED JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore Dated: 21st August, 2026 Vms Copy to: HELIOS WORLD WIDE, 25/1-5, 19TH CROSS, MARENHALLIPALYA, J P NAGAR, 1 BENGALURU - 560078., BENGALURU-560078, KARNATAKA INCOME TAX OFFICER, WARD NO; 4(3)(3)., BMTC BUILDING, 80 FEET ROAD, 6TH 2 BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU - 560095., BENGALURU-560095, KARNATAKA 3 THE PCIT / CIT, 4 THE D.R., ITAT, BANGALORE BENCH 5 GUARD FILE By Order

ASSISTANT REGISTRAR / I.T.A.T., BANGALORE

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