CHINA KUNLUN CONTRACTING AND ENGINEERING CORPORATION,MUMBAI vs. DDIT (CPC), BENGALURU

Under facts and circumstances of the case the Learned Commissioner of Income Tax (Appeal) erred in facts and in law by granting only partial credit of prepaid taxes to the extent of INR 2,41,28,920 as against INR 7,02,91,070 duly reflected in Form no. 26AS for the captioned year and as claimed by the Appellant in its ROI filed on March 16, 2022

Under facts and circumstances of the case the Learned Commissioner of Income Tax (Appeal) had passed the order without considering the facts and submissions put before him as also without allowing the appellant sufficient opportunity of being heard.

Each of the above ground be considered as separate from the other grounds.”

Brief facts of the case are that assessee is a foreign company and a non-resident incorporated under the laws of People's Republic of China. It is engaged into the business of providing general contracting and project management consulting, research, and development, designing, and other engineering services. It is also engaged in the business of petrochemicals, textile and chemical fiber and environmental engineering. Assessee filed its return of income on 16.03.2022 (the extended due date for filing return of income for AY 2021- 22 being 15.03.2022). In this regard, assessee had filed e- grievances on the Income-tax portal on 15.03.2022 and 16.03.2022 to seek resolution as it was not able to register the Digital Signature Certificate (DSC) of the Authorised Signatory of the assessee for the purpose of verification of return of income and further faced issues in validation of JSON file purely due to certain technical difficulties on the Income-tax portal, as a result of which assessee was only able to file the return of income 28 minutes past midnight and accordingly, the return was reckoned as belated return u/s. 139(4) of the Act. Further, vide such return of income, assessee declared a net business loss of Rs.1,04,57,56,800/- resulting into Nil taxable income and claimed credit of prepaid taxes amounting to Rs.7,02,91,067/- that was duly

Before the ld. CIT(A), the difficulties faced by the assessee in filing its return within the due date were reiterated. It also made submissions in respect of difference in the credit given for TDS reflected in Form 26AS. Ld. CIT(A), after taking into account submissions made by the assessee did not accept the claim of carry forward of current year’s business loss to subsequent year, as assessee had failed to file return of income within the due date of filing the return u/s.139(1). In respect of credit for TDS, a direction was given to the ld. Assessing Officer to verify the same and give credit corresponding to income assessable during the year. Aggrieved, assessee is in appeal before the Tribunal.

Before us, the ld. Counsel for the assessee reiterated the factual position as narrated above. It is also demonstrated by way of correspondences made by it at the time of filing of return along with screen shots to justify the claim so made. The email sent by the assessee

1. In support of the above email, assessee has also furnished screen shots for the technical glitches faced by it.

We have considered the submission made before us along with documentary evidences placed on record. Assessee has elaborately explained the technical difficulty faced by it and all the possible steps taken by it to resolve the same for filing the return within the prescribed due date u/s.139(1) but failed, resulting into a delay of 28 minutes in filing the return. Considering the facts on record and the bonafide hardship faced by the assessee, as well as considering the claim made by the assessee to allow carry forward of the current year’s business loss to subsequent year, we are of considered view to accept the same in view of decision of Hon'ble Supreme Court in the case of Goetze

Thus, we remit the matter back to the file of ld. Juri ictional Assessing Officer (JAO) to verify the claim of the assessee for its correctness and consider the same in accordance with the provisions of law for carry forward of current year’s business loss to the subsequent year. Ld. Assessing Officer is also directed to verify the claim of assessee towards tax deducted at source vis-à-vis Form 26AS and corresponding income reported in the return and allow the appropriate credit after the due verification. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

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