GOREGAON SPORTS CLUB,MUMBAI vs. DCIT EXEMPTION 1(1), 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.

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:-

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.