LUXURY GOODS RETAIL P.LTD,MUMBAI vs. DCIT 10(2)(1), MUMBAI

आदेश / O R D E R

PER C.N.PRASAD (JM) This appeal is filed by the Assessee against the order of the Ld. CIT (Appeals)-17, Mumbai dated 22.02.2016 for the assessment year 2011-12 arising out of assessment order passed u/s 143(3) of the Act.

Assessee has to file return of income electronically and there are no instructions to accept the return filed manually as the original return. Since according to the Assessing Officer, the Assessee has not filed return of income electronically within the due date as required u/s 139(1) of the Act, the provisions of Section 80 are attracted and the Assessee is not allowed to carry forward business loss to the subsequent assessment year. Thus, the Assessing Officer computed the income of the Assessee at Nil. The Assessee preferred appeal before the Ld. CIT (Appeals) and the Ld. CIT (Appeals) sustained the view of the Assessing Officer that the return filed by the Assessee manually on 30.11.2011 is not a valid return and the return filed electronically on 11.10.2012 is belated return and the Assessee is not entitled to carry forward and set off business losses and unabsorbed depreciation.

a consolidated return for all the four cells was required to be filed. Later, a revised return was filed on 29.10.2002 incorporating losses of all the four cells. However, the Assessing Officer considered the revised return as the valid return since this return was filed belatedly and he denied carry forward of losses to the Assessee. The Hon’ble third member held that since the original return is filed within the due date u/s 139(1) of the Act, the return filed separately are valid returns in terms of provisions of 292B of the Act. Therefore, he submits that this decision is squarely applicable to the Assessee. He also placed reliance in the case of Morgan Stanley Asset Management Inc. Vs. DCIT [33 SOT 452] (Mum), wherein, the Coordinate Bench held that the verification column signed in the return in the name of SB Billimoria &Co. and not as one of the partners of the firm on behalf of the Assessee is a curable defect u/s 292B as the return is only a defective return and not an invalid return.

(A.Y.2011-12) M/s Luxury Goods Retail Private Ltd. the return of income electronically within the due date specified under the provisions of Section 139(1) of the Act. The Ld. CIT (Appeals) agreed with the view of the Assessing Officer. Now the question before us to be addressed is as to whether original return filed manually can be treated as a valid return or not. No doubt, the requirement is that the Assessees should file returns electronically within the due date specified u/s 139(1) in order to be eligible for set off and carry forward losses. The mandatory requirement of law for set off and carry forward of losses is that the return should be filed within the due date under the provisions of Section 139(1) of the Act. Here the Assessee filed return of income under 139(1) manually instead of filing the return electronically. The reasons as to why the Assessee could not file the return electronically was also given. In such circumstances, we are of the considered view that simply because the Assessee could not file the return electronically within the provisions of section 139(1), the benefit of set off and carry forward of losses cannot be denied for the reason that the Assessee did file return of income manually within the due date specified u/s 139(1) of the Act. The claim for set off and carry forward of losses cannot be denied on a too technical reasons on the ground that the electronic return filed by the Assessee is belated when the Assessee filed return of income manually within the due date specified u/s 139(1) of the Act.

(A.Y.2011-12) M/s Luxury Goods Retail Private Ltd. to be a defective return and not an invalid return. The third member of the Mumbai Bench held that the return filed separately by the four cells of the Assessee declaring total loss claimed by the Assessee did comply in substance and in effect within the intent and purpose of the Act and in view of the provisions of Section 292B and the defect is not material in the light of the provisions of Section 292B. While holding so, it was observed as under : “15. The issue for our consideration is whether the assessee is entitled to carry forward the loss incurred by it in the business of trading in shares by the four cells/units established by the assessee in India. ln this connection it would be relevant to refer the provisions of section 80 which is non obstante provision. According to this section, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139 shall be carried forward and set off under sub-section(l)of section 72 or sub- section (2) of section 73 or sub-section (1) or sub-section (3) of section 74 or sub- section (3) of section 74A. This clearly shows that the loss determined by the Assessing Officer cannot be carried forward and set off under the above provisions unless the return has been filed in accordance with the provisions of sub-section (3) of Section 139.”

(A.Y.2011-12) M/s Luxury Goods Retail Private Ltd.

Order pronounced in the open court on the 5th day of May 2017.