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Income Tax Appellate Tribunal, ‘SMC‘ BENCH
Before: SHRI M.BALAGANESH&
आदेश / O R D E R PER M. BALAGANESH (A.M):
This appeal in A.Y.2009-10 arises out of the order by the ld. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC) in appeal No.CIT(A),Mumbai- 8/10123/2019-20 dated 21/03/2022 (ld. CIT(A) in short) against the order of assessment passed u/s.154 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 15/10/2011 by the ld. Dy. Commissioner of Income Tax, CPC (hereinafter referred to as ld. AO).
M/s. Privasia Holdings Pvt. Ltd.,
The only issue to be decided in this appeal is as to whether the ld. CIT(A), NFAC was justified in confirming the confirming the order passed by the ld. AO denying the claim of the assessee to set off the brought forward losses / depreciation amounting to Rs 6,78,137/- in the facts and circumstances of the case.
We have heard the rival submissions and perused the materials available on record. We find that assessee is a private limited company engaged in the business of wholesale import and trading of preserved food items. The return of income for the Asst Year 2009-10 was filed by the assessee on 31.3.2011 declaring total income of Rs 13,73,043/- after setting off of earlier years unabsorbed business loss/depreciation of Rs 6,78,137/-. The said return was duly processed u/s 143(1) of the Act by the CPC vide intimation issued on 15.10.2011, wherein the claim of set off of brought forward loss was denied to the assessee. The assessee filed rectification application u/s 154 of the Act on 1.8.2019 before the CPC which was disposed of vide order dated 23.8.2019 denying the set off of brought forward losses of earlier years. Hence the assessee preferred an appeal before the ld. CIT(A), NFAC. We find that the assessee had sought to set off the losses brought forward from earlier years as under:-
Asst Year Date of filing Loss under the head Business Return 2000-01 30.11.2000 60,293 2001-02 31.10.2001 86,864 2002-03 31.10.2002 1,76,207 2003-04 1.12.2003 1,80,749 2004-05 1.11.2004 96,962 2005-06 31.10.2005 77,062 TOTAL 6,78,137 3.1. The plea of the assessee is that the returns of income for the earlier years upto Asst Year 2005-06 were filed on or before the due date
M/s. Privasia Holdings Pvt. Ltd., prescribed u/s 139(1) of the Act and hence the assessee would be entitled to avail the benefit of set off of those brought forward losses with the income of the current year , eventhough the return for the year under consideration was filed belatedly by the assessee. The assessee always claimed that it had fulfilled all the conditions prescribed u/s 72 of the Act and hence would be eligible for set off of brought forward business loss and unabsorbed depreciation with the business income of the year under consideration. However, the lower authorities had observed that since the return of income for the Asst Year 2009-10 was filed belatedly , the assessee would not be entitled for set off of brought forward losses of earlier years with the business income of Asst Year 2009-10. Further they observed that as per section 72 of the Act, the assessee would not be eligible to set off the brought forward loss of Asst Years 2000-01 and 2001-02 with business income of Asst Year 2009-10 as it goes beyond the period of 8 years from the end of the relevant assessment year. We find that this observation of the ld. CIT(A) is partially right and partially wrong. As far as set off of brought forward business loss of Asst Year 2000-01, 8 years period prescribed ends with Asst Year 2008-09 and hence the loss for Asst Year 2000-01 would lapse. However, from Asst Year 2001-02 onwards, the loss would be eligible for set off with business income of Asst Year 2009-10 as they fall within the period of 8 years from the end of the relevant assessment year. However, this would be subject to the fact that the returns in earlier years for which loss is claimed, had to be filed within the due dates prescribed u/s 139(1) of the Act. Hence for this factual verification of date of filing returns of earlier years as tabulated above, we restore the issue to the file of ld. AO for denovo adjudication in accordance with law commencing from Asst Year 2001-02 onwards. If it is found that returns for earlier years from Asst Years 2001-02 onwards were filed within the due date prescribed u/s 139(1) of M/s. Privasia Holdings Pvt. Ltd., the Act or extended time limit thereon, then assessee would be entitled for set off the brought forward loss with business income of Asst Year 2009-10 (i.e the year under consideration). We hold that in the year of set off of losses, there is no requirement of law that the returns should be filed within the due date prescribed u/s 139(1) of the Act. With these observations, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in open Court on 06/09/2022.