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Facts
The assessee, The Hazaribag Central Co-operative Bank Ltd., filed its return of income for AY 2016-17 on 31.3.2017, which was considered by the AO. The AO denied the carry forward of loss on the ground that the return was filed under section 139(4) and not 139(1) of the Act. Additionally, a sum of Rs. 15,37,16,741/- was added to the income.
Held
The Tribunal held that returns filed under section 139(4) should be considered as filed within the time prescribed under section 139(1) or 139(2), following the decisions of the Bombay High Court and coordinate benches. The addition of Rs. 15,37,16,741/- was restored to the AO for readjudication.
Key Issues
Whether a return filed under section 139(4) is a valid return for claiming carry forward of losses and whether the addition of Rs. 15,37,16,741/- was justified.
Sections Cited
139(1), 139(4), 11(1)
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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
Per Bench This is an appeal filed by the assessee against the order of the ld CIT(A), This is an appeal filed by the assessee against the order of the ld CIT(A), This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC Delhi dated 21.4.2023 in Appeal No.CIT(A) Hazaribag/10055/2018 NFAC Delhi dated 21.4.2023 in Appeal No.CIT(A) Hazaribag/10055/2018 NFAC Delhi dated 21.4.2023 in Appeal No.CIT(A) Hazaribag/10055/2018-19 for the assessment year the assessment year 2016-17.
Smt. Rinku Singh, Ld CIT DR appeared for the revenue and Shri Smt. Rinku Singh, Ld CIT DR appeared for the revenue and Shri Smt. Rinku Singh, Ld CIT DR appeared for the revenue and Shri Devesh Podar, ld AR appeared for the assessee. , ld AR appeared for the assessee.
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It was submitted by ld AR that the assessee, The Hazaribag Central Co- operative Bank Limited, which is merged with M/s Jharkhand State Co-operative Bank Limited, Ranchi w.e.f. 1.4.2017. It was the submission that for the impugned assessment year 2016-17, the Assessing Officer has denied theassessee carry forward loss on account of return being filed u/s.139(4) of the Act and not u/s.139(1) of the Act. It was also the submission that the provisions of previous year which had been added back by the assesseein line with the direction of RBI have not been allowed during the impugned assessment year which has resulted in a double addition of Rs.15,37,16,741/-. It was submitted by ld AR that the return of income had been filed by the assessee showing carry forward loss on 31.3.2017. It was admittedly filed u/.s,139(4) of the Act. It was the submission that in view of the decision of the Hon’ble Bombay High Court in he case of Trustee of Tulsidas Gopalji Charitable and Chaleshwar Temple Trust vs CIT, 207 ITR 368 (Bom), wherein, the Hon’ble High Court has categorically held that the provisions of section 139(1) and section 139(4) of the Act have to be read together and on such a reading, the inevitable conclusion is that a return made within the time specified in sub-section(4) has to be considered as having been made within the time prescribed in sub-section(1) or sub-section(2) of section 139 and the option contemplated by the Explanation to section11(1) is exercised in writing along with such return, the requirements of the Explanation to section 11(1) would stand satisfied. He submitted that such return was liable to be considered. He submitted that similar is the decision of the Co-ordinate
P a g e 2 | 6 bench of Nagpur Bench in the case of Sukhharta Developers and Builders vs PCIT in & 597/Nag/2016 dated 1.8.2018, wherein also, it has been held that the return filed within the time as specified in section 139(4) has sufficient compliance for provisions of the Income Tax Act, 1961, as it was expounded that sub-section(1) and sub-section (4) of section 139 have to be read together and hence, it is the inevitable conclusion that a return made within the time specified in sub-section (4) has to be considered as having been made within the time prescribed in sub-section(1) of the Act. Ld AR further drew our attention to the decision of this Co-ordinate bench in the case of URYA REALCON PRIVATE LIMITED,SARAIDHELA, DHANBAD VS.DCIT, AAYAKAR BHAWAN, DHANBAD in & 5/Ran/2024, wherein, similar findings have also been rendered. It was the further submission that in the assessment order, the Assessing Officer mentions that the evidence in respect of the claim that the amount of Rs.15,37,16,741/- had not been produced cannot be considered insofar as the audit report for earlier years and impugned assessment year were before the AO. It was the submission that the AO may be directed to grant the assessee the benefit of carry forward loss as also deleting the addition of the amount of Rs.15,37,16,741/- as the same amounts to double addition.
In reply, ld CIT DR submitted the decision of the Hon’ble Bombay High Court in the case of Trustee of Tulsidar Gopaji Charitable and Chaleshwar Temple Trust (supra) was in relation to the provisions of section 11(1) of the Act. It was P a g e 3 | 6 the submission that when the Act specifically provide for filing of the return nu/s.139(1) of the Act, filing of return u/s.139(4) cannot be deemed to be sufficient compliance of the said provision. It was the submission that the carry forward loss cannot be allowed for the impugned assessment year. In respect of disallowance of Rs.15,37,16,741/-, it was the submission that the evidence had not been produced by the assessee before the Assessing Officer although sufficient number of opportunities had been granted. It was the submission that order of the AO and that of the ld CIT(A) be upheld.
We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the assessee has filed the return of income on 31.3.2017. The said return has been considered by the AO when making the assessment. It is also recognized that the Co-ordinate Bench in the case of URYA REALCON PRIVATE LIMITED,SARAIDHELA, DHANBAD VS.DCIT, AAYAKAR BHAWAN, DHANBAD(supra) has already held that a return filed u/s.139(4) of the Act was to be a return filed u/s.139(1) of the Act. We must mention here that no contrary decision has been pointed out by the Revenue in regard to the decision rendered by the Hon’ble Bombay High Court referred to (supra) as also the decisions of the Co-ordinate Benches (supra). This being so, respectfully following the judicial pronouncements, the AO is directed to treat the return filed by the assessee on 31.3.2017 as return u/s.139(1) of the Act and grant the assessee the benefit of carry forward loss.
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Coming to the issue of disallowance of Rs.15,37,16,741/-, ld AR has placed before us the audited balance sheet for the year ended on 31.3.201 and 31.3.2016. It is noticed that the provision for written up has been added back by the assesseein the year ending 31,3,2015 and same has also been included in the total income. Consequently, in view of the direction of the RBI, the assessee would not be entitled the benefit. However, as the AR has mentioned that the evidences had not been produced before the AO, in the interest of justice, the issue of this disallowance of Rs.15,37,16,741/- is restored back to the file of the AO for readjudication after granting the assessee adequate opportunity of being heard.
In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order dictated and pronounced in the open court on 9/06/2025.