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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
This appeal is filed by Goregaon sports club (assessee/appellant) against the order of The Commissioner Of Income Tax (Appeals) – 1, Mumbai [ the ld CIT (A)] dated 30/05/2019 for assessment year 2010 – 11 wherein appeal filed by the assessee against the order passed u/s 154 of The Income Tax Act 1961 (The Act) dated 28/6/2018 passed by The Joint Commissioner Of Income Tax (Exemption) – 1 (1), Mumbai (The Learned AO) was dismissed.
“1. The Ld. CIT (A) erred in confirming AO order dt. 28.06.2018 whereby AO rejected assessee’s Rectification application U/S. 154 dt. 16.04.2018 which was made against AO order dt. 07.07.2017, giving effect to Ld. CIT (A) order dt. 13.02.2015.
1.1 The Ld. CIT (A) failed to appreciate that, there was an apparent mistake in the AO order dt. 07.07.2017 because AO has not allowed 8 years old deficits C/F which was not so directed by Ld. CIT (A), hence it was beyond his jurisdiction to make such adjustment in the order.
1.2 The Ld. CIT (A) failed to appreciate that, if the dept intended to raise a legal issue of not allowing 8 years old Deficits, in that case, this issue should have been raised in the Dept. Appeal for A.Y. 2010-11 for allowing set off of Deficits & C/F. by the Ld. CIT (A) which was before the Hon'ble Tribunal (Decided vide Order dt. 23.09.2015).
The Appellant craves leave to add, alter or amend the above Grounds of Appeal.”
Brief facts of the case shows that the assessee is a registered charitable trust with The Director Of Income Tax (Exemption), Mumbai u/s 12 A of The Income Tax Act 1961 and registered with The Charity Commissioner, Mumbai.
The assessee approached the learned CIT – A who passed an order on 13/2/2015 granting relief to the assessee. Before the learned CIT – A assessee also challenged the set-off deficit and carry forward of the same. The learned CIT – (A) per para number 7 directed the learned assessing officer to allow set off of deficit of earlier years and also to allow carry forward of the aggregate deficit of the current year.
The learned AO passed an order giving effect to the CIT appeals order on 7/7/2017 wherein the deficit of the earlier year of ₹ 30,577,144/– was allowed. The learned assessing officer noted that balance loss of earlier years of (₹ 148,119,643/– - 3,05,77,144) of ₹ 117,542,299/– is not allowed to be carried forward and to be set-off against the income of future year as the losses of exceeded a period of 8 years.
The assessee filed a rectification application dated 16/4/2018 submitting that as per the provisions of Section 11 – 13 Under the income tax act there is no provision restricting or prohibiting carry forward of deficit for subsequent years even if such deficit exceed Of 8 years. Therefore, it was stated that there is a mistake apparent
This was rejected by the learned AO vide order dated 28/6/2018 stating that there is no mistake apparent from the record.
Therefore, assessee approached the learned CIT – A who also dismissed the appeal of the assessee stating that it is not a mistake apparent from the record. He held that:-
“6.3 I have carefully considered the facts of the case, oral contentions, and written submissions of the assessee, reasons for rejection given by the AO in the impugned order and material available on record. It is pertinent to mention here that the present appeal has been filed against the letter issued by the AO intimate in the appellant of rejection of the rectification application filed. Such rejection was intimated by the AO wide his letter dated 28/6/2018. The appellant in the present appeal 6 to contend that the AO while giving effect to the orders of CIT (A) has committed an error which is apparent from the record as CIT (A) has directed to allow the carry forward of the aggregate deficit of the current year. The AO in his order dated 7/7/2017, while giving effect to these directions of the learned CIT (A) has allowed the set of and carry forward of the deficit of
Assessee is aggrieved with the above order of the learned CIT – A and is in appeal before us. Learned authorised representative submitted an event chart stating the chronology of events. It was submitted that a similar case of rectification u/s 154 of the trust with regard to carry
The learned departmental representative vehemently supported the order of the learned CIT – A.
We have carefully considered the rival contention and perused the orders of the lower authorities. In the present case though the clear-cut direction of the learned CIT – A in order dated 13/2/2015 to the learned assessing officer to allow set off of and carry forward of earlier years deficit, the learned assessing officer interpreted in his own way that assessee should be allowed only the carry forward of deficit to the extent of preceding 8 years only. We find that above order of the learned assessing officer
In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 26.07.2022.