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Facts
The assessee filed an original return of income on 29.08.2019 and a revised return on 24.09.2019, claiming a long-term capital loss. The CPC processed the revised return as original and disallowed the carry-forward of capital loss, stating it was filed late.
Held
The Tribunal held that the claim for carry-forward of capital loss made in the revised return, filed after the due date, could not be allowed. The original return did not claim any capital loss.
Key Issues
Whether a capital loss claimed for the first time in a revised return, filed after the due date, can be allowed to be carried forward.
Sections Cited
143(1), 139(1), 139(3), 139(5), 80, 74, 139(4)
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2019-20 arises out of the order of Learned Commissioner of Income Tax, Appeal, Addl./JCIT(A)-3, Hyderabad [hereinafter “Addl.CIT(A)”] dated 29.01.2025 vide intimation u/s. 143(1) of the Income-tax Act, 1961 (hereinafter “the Act”) issued by Central Processing Centre, Bengaluru (CPC) dated 23.11.2019.
The effective ground of appeal is against not allowing carried- forward loss in the intimation issued u/s. 143(1) of the Act in respect of the revised return claiming capital loss, filed on 24.09.2019 after the due date of filing the return .
1. 3. The assessee is a salaried employee working with SRF Ltd. and has filed his return of income on 29.08.2019 declaring total income of Rs. 63,35,980/-. However, the assessee did not e-verify the return and filed a revised return on 24.09.2019 claiming a capital loss of Rs.30,46,471/-. The revised return was processed on 23.11.2019, treating it as the original return, as the return filed on 29.08.2019 remained unverified. In the intimation issued u/s. 143(1) of the Act, the CPC did not allow the claim of carried-forward loss on the ground that the return was filed late and the loss was not claimed within the due date u/s. 139(1) of the Act. Aggrieved, the assessee preferred an appeal before the Ld. Addl. CIT(A), who dismissed the appeal after detailed discussion, observing as under:
“5.2.1 I have examined the returns of income filed, the intimation issued and the submissions made by the appellant. The appellant has filed a return of income on 29/08/2019 but has not sent the ITR V acknowledgment to the CPC with the due date. Thereafter, the appellant has filed another return of income on 24/09/2019 which was processed by the AO, CPC on 23/1 1/2019 treating this return as original return of income. In the intimation issued u/s 143(1) of the Act the "Loss in current year to be carried forward" as shown in ROI of Rs. 30,46,471/- was neither computed nor allowed to be carried forward.
5.2.2 From the examination of the return of income filed on 29/08/2019 it is seen that the appellant has not claimed to have incurred any capital loss from sale of equity share. However, in the return of income filed on 24/09/2019, the appellant has claimed full value of consideration received from sale of equity share of Rs.2,63,76,825/- and after deducting cost of acquisition of Rs.2,94,23,296/- has shown long-term capital loss of Rs. 30,46,471/-. Further, the long-term capital loss so shown was shown to be carried forwarded to future years as it was not set-off against any income during the current year.
5.2.3 In the submissions made the appellant has stated that it has filed an original return of income on 29/08/2019 and has sent the signed copy of the ITR-V by post to CPC, Bangalore. The appellant has relied on the Circular No. 13 of 2020 issued by CBDT dated 13/07/2020 wherein it had provided one-time relaxation to the taxpayers for verification of tax returns for AYs 2015-16 to 2019-20 which are pending due to non-filing of ITR form, to claim that he was denied this opportunity to validate his return of income filed on 29/08/2019 as the return filed by him on 24/09/2019 was processed.
5.2.4 From the examination of the ROI as available in CPC it is seen that the appellant has e-verified the ROI filed on 29/08/2019 on 10/02/2020 electronically using aadhar OTP mode. Further, in the remand report submitted by the AO it has been mentioned that "the assessee is not able to produce proof that his claim of that he has sent the ITR V to the CPC within the due date." From the above it transpires that the claim being made by the appellant that it has sent ITR-V by post to CPC, Bangalore for validating ROI filed on 29/08/2019 is misleading and false. Further, the reliance on circular 13 of 2020 by the appellant is also not correct as the ROI M filed on 29-8-2019 was not pending for verification due to filing of another return on 24-9-2019.
5.2.5 The appellant has filed another return of income terming it as revised return on 24/09/2019. However, as the ROI filed on 29/08/2019 was treated as not a valid return owing to non-fling of ITR V the return filed on 24/09/2019 was rightly considered as original return of income by the A0, CPC. Further, as the return of income filed by the appellant on 24/09/2019 (being treated as original return) having been filed after the specified due date u/s 139(1) of the Act i.e. 31/08/2019 the long-term capital loss claimed in this ROl was correctly not computed and allowed to be carried forward in the intimation issued.
5.2.6 The Hon'ble Delhi Tribunal 'F' Bench in its recent judgment dated 22/06/2023 given in the case of RRPR Holding (P) Ltd. Vs DCIT, reported in (2023) 152 taxmann.com 537 on the issue of filing of revised return showing capital loss when in original return no capital loss was shown has observed as under :
"9.2 In this backdrop, before we proceed to deal with the issue, it may be relevant to capsulate the provisions relevant for determining the issue. Section 139(1) postulates that the assessee is required to furnish a return of income on or before the due date for the previous year in the form prescribed and duly verified by the assessee. Section 139(3) prescribes that if an assessee has sustained a loss in any previous year under the head 'profits and gains of business or profession' or under the head 'capital gains' claimed that such losses or any part thereof should be carry forward for set off under sections 72 to 74A, he is under obligation to furnish the return within the time allowed under section 139(1) of the Act. Section 139(5) on the other hand deals with revised return and states that if any person having furnished a return under section 139(1) or sub section 4 of the Act discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier. Section 80 which begins with non- obstante clause, unequivocally lays down that to get the benefit of carry forward of loss pertaining to Capital Gains, the return of loss has to be filed within the time allowed under section 139(1).
Thus, a bare reading of these provisions gives an infallible impression that to be entitled to carry forward the business loss or capital loss, the assessee is required to file the return under section 139(1) of the Act. Section 80 of the Act by a non obstante clause prohibits claim of carry forward of such losses unless determined under section 139(3) of the Act. Section 139(3) in turn, makes the mandate of the law clear that the loss return must be filed within time limit permissible under section 139(1) of the Act. The revision of return under section 139(5) is also circumscribed by expression discovers any omission or any wrong statement in the original return.
In the instant case, the original return filed under section 139(1) does not make reference to existence of any capital loss at all. The loss has been claimed for the first time in the revised ROI beyond the time limit prescribed under section 139(1) of the Act. The provision of section 80 thus comes into play. The law codified thus is plain and concrete and does not admit of any ambiguity. The revenue authorities, in our view, have thus rightly held that the capital loss claimed beyond the time limit under section 139(1) thus cannot be carried forward under section 74 of the Act in the factual matrix. We do not find any reason to think differently.
11.1. At this juncture, we also take note of the judgment of the Hon'ble Allahabad High Court in Dhampur Sugar Mills Ltd. (supra) referred on behalf of the Assessee. However in that case, the Hon'ble Allahabad High Court itself observed as under: "There is a distinction between a revised return and a correction of the return. If the assessee files some application for correcting a return already filed or making amends therein, it would not mean that he has filed a revised return. It will still retain the character of an original return. but once a revised return is filed, the original return must be taken to have been withdrawal and to have been substituted by a fresh return for the purpose of assessment. The same View has been taken in Gopaldas Parshottamdas v. Commissioner of Income Tax." Thus, a case before the Hon'ble Allahabad High Court was quite different. It merely says that the earlier return after filing a revised return cannot form the basis of the assessment. Also a mere correction of return without filing a revised return will not tantamount to withdrawal of the original return and its substitution of a fresh return. In the instant case, an altogether fresh claim of capital loss has been made in the revised return filed beyond 139(1)-time limit. It is not a case of mere correction or modification in the existing claim of capital loss. The capital loss claimed when seen qua revised return filed under s. 139(5), the claim of carry forward thereof, clearly does not pass the muster of law.
A reference has also been made to the judgment of Hon'ble Gujarat High Court in Babubhai Ramanbhai Patel (supra). On a reading of the judgment, it is gathered that the reference has been made to Sections139(1), 139(3) and 139(5) only while granting relief to the assessee for raising claim for carry forward of speculation loss made by way of revised return but not raised in the original return. Significantly, Section 80of the Act which seeks to place statutory embargo upon the assessee for eligibility of carry forward of losses raised beyond the due date under section 139(1) has not been presented for the consideration of the Hon'ble High Court at all. Thus, the reliance upon such judgment rendered without reference to Section 80 of the Act, which is pivotal to the controversy, is of no moment and the observations made therein cannot be applied in the facts of the case.
We thus see no error in the action of the revenue in denial of carry- forward of capital losses claimed in the revised return."
5.2.7 In view of above observation of Hon'ble Delhi Tribunal, even if for argument's sake in the case of the appellant it is considered that there was a valid original return of income, then also respectfully following the judgment of Hon'ble Delhi Tribunal dated 22/06/2023 as above. the claim made by the appellant of long-term capital loss in the alleged revised return for the first time cannot be allowed to be carry-forwarded.
5.2.8 In view of the discussion made, the denial of carry forward of long-term capital loss of Rs. 30,46,471/- in the intimation issued u/s 143(1) of the Income Tax Act, 1961 dated 23/11/2019 is found to have been correct made and sustained.”
The Ld. Authorized Representative (AR) of the assessee argued that the original return of income was filed on 29.08.2019, within the due date of 31.08.2019 as prescribed u/s. 139(1) of the Act. The Ld. A.R submitted that CBDT vide Circular No. 13/2020 dated 13.07.2020 had extended the date for filing the ITR-V for verifying return to 30.09.2020, and assessee subsequent to filling the revised return has verified the original return, therefore the original return filed on 29.08.2019 should be considered valid return. The Ld AR submitted that the CPC has treated the revised return filled on 24.09.2019 as original return and therefore, has not allowed the claim of carry forward of capital loss of Rs. 30,46,471/- claimed in the revised return as the return was filed beyond the due date. The Ld. A.R contended that CBDT vide Circular No. 13/2020 dated 13.07.2020 had extended the date for filing the ITR-V to 30.09.2020, and therefore, the original return filed on 29.08.2019 is valid return. Consequently, the revised return filed on 24.09.2019 was also valid return, and the capital loss should have been allowed.
The Ld. Departmental Representative (DR) has submitted that a revised return can be filed only to correct a mistake or omission in the original return, provided the original return was filed within the due date and is valid. The Ld. DR has argued that assessee has filled revised return before verifying the original return and therefore revised return was processed as original return disallowing the claim of carry forward of loss as it was filled beyond the due date. The Ld AR submitted that the CBDT Circular No. 13/2020 is not applicable in the present case, as the subsequent return filled had already been processed and there was no pending original return to which the circular could apply. The Ld. DR also pointed out that, in any case, the claim of loss was filed beyond the due date u/s. 139(1) of the Act, therefore the Ld. Addl. CIT(A), in view of Section 80 and Section 139(4) of the Act, has rightly held that such a loss cannot be allowed.
We have heard the rival submissions, and perused the materials available on record. The assessee has filed return of income showing total income of Rs. 63,35,980/- on 29.08.2019 within the due date prescribed u/s 139(1), but did not verify the return by filling ITR-V. The assessee, before verifying the original return has filed revised return on 24.09.2019 claiming capital loss of Rs. 30,46,471/-, which was processed by CPC on 23.11.2019 treating it as an original return. The CPC disallowed the carry-forward of capital loss as the return claiming the loss was not filed within the due date. The Ld. AR has argued that CBDT vide Circular No. 13/2020 dated 13.07.2020, has extended the due date for submitting the ITR-V, and assessee has verified the original return after the issue of circular, the original return filed on 29.08.2019 was valid return, and therefore, the revised return filed on 24.09.2019 claiming capital loss should have been treated as revised return and the capital loss should have been allowed as original return was filled within the prescribed date.
We note that the Ld. Addl. CIT(A) has relied on the decision of ITAT Delhi Bench in RRPR Holding (P.) Ltd. vs. DCIT [2023] 152 taxmann.com 537 (Del-Trib.), wherein it was held that an assessee is not eligible to claim carried-forward capital loss in a revised return if the same is filed beyond the due date prescribed u/s. 139(1) of the Act. We have gone through the provision of section 139(4), 139(5), section 80 of the Act and the case law relied on by Ld. Addl. CIT(A).
The assessee has not claimed carry forward of capital loss in original return and the claim was made only in revised return, which was filled after the due date prescribed in section 139(1) of the Act. In view of above, the assessee is not eligible to carry forward of the capital loss claimed in the revised return. Accordingly, we find no infirmity in the order of the Ld. Addl. CIT(A).
In the result, the appeal filed by the assessee is dismissed.
Order pronounced on 12th day of August, 2025 at Chennai.