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Facts
The assessee, a builder/property developer, filed its return of income declaring a loss of Rs.34,78,60,276/- inclusive of depreciation. The Central Processing Centre (CPC) disallowed the claim for carry forward of this loss, stating it was filed beyond the due date. The assessee's appeal to the CIT(A) was dismissed.
Held
The Tribunal noted that the assessee had filed and e-verified the return before the due date of 31.10.2023, even though the acknowledgement generation was delayed by a few seconds due to system glitches. The disallowance by the CPC was considered erroneous as it was based on a wrong assumption of facts.
Key Issues
Whether the disallowance of "loss of current year to be carried forward" due to a few seconds delay in acknowledgment generation, despite the return being filed before the due date, is justified.
Sections Cited
139(1), 139(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI S.R.RAGHUNATHA
आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeal)/Addl./JCIT(A)-4, Bengaluru, (hereinafter in short "the Ld.CIT(A)”), dated 26.04.2024 for the Assessment Year (hereinafter in short "AY”) 2023-24.
The main grievance of the assessee is against the action of the First Appellate Authority disallowing “loss of current year to be carried forward”
to the tune of Rs.34,78,60,276/- [as reduced by Rs.46,15,565/- representing depreciation].
The brief facts are that the assessee is a company engaged in the business of as a builder/property developer and filed its return of income (RoI) declaring loss of Rs.34,78,60,276/- inclusive of depreciation of Rs.46,15,555/- through e-filing mode. The return was processed by the CPC and intimation u/s.143(1) of the Income Tax Act, 1961 (hereinafter in short ‘the Act’) was issued by the CPC on 26.12.2023 which showed that “loss of current year to be carried forward” amounting to Rs.34,78,60,276/- including the depreciation of Rs.46,15,565/- has been disallowed for the reason that the loss return was filed beyond the time allowed u/s 139(3) i.e., beyond the due date specified u/s.139(1) read with Explanation 2 thereto, which is 31st day of October of the assessment year in the case of a Company, for purposes of eligibility for carry forward of losses under various provisions of the Act enumerated in Sec.139(3) of the Act.
Aggrieved, the assessee preferred an appeal before the Ld.CIT(A)
who dismissed the appeal.
Aggrieved, the assessee is in appeal before this Tribunal.
We have heard both the parties and perused the material available on record. The aforesaid facts are not repeated for the sake of brevity. It is noted that the assessee’s RoI filed declaring loss of Rs.34,78,60,276/- was processed by the CPC but assessee’s claim for disallowing “loss of current year to be carried forward” to the tune of Rs.34,78,60,276/- [as reduced by Rs.46,15,565/- representing depreciation] has been disallowed on the reason that the assessee’s return was filed beyond the time allowed u/s 139(3) i.e., beyond the due date specified u/s.139(1) read with Explanation 2 thereto, which is 31st day of October of the assessment year in the case of a Company, for purposes of eligibility for carry forward of losses under various provisions of the Act enumerated in Sec.139(3) of the Act. In this regard, it has been brought to our notice that the assessee had filed its RoI on 31.10.2023 and e-verified the same before 23:59:00 hours which fact is discernable from Page No.2 of the Paper Book which means it was uploaded within 31st October, 2023 and thereafter, acknowledgement number was generated on 01.11.2023 at 00:00:05 seconds, meaning ‘05’ seconds delay in generation of acknowledgement number which fact is discernable from Page No.1 of the Paper Book means the acknowledgment was generated by the systems, which is undisputedly in the control of the department and assessee has no control over it. Thus, we note that the assessee has filed the RoI which was e-verified before 24:00 hours on 31.10.2023. In such a scenario, it can’t be held that the RoI of the assessee has been filed belatedly because due date specified u/s.139(1) read with Explanation 2 thereto, is 31st day of October of the assessment year in the case of a Company, [for being eligible to claim carry forward of losses under various provisions of the Act as enumerated in Sec.139(3) of the Act]. In the light of the factual finding of ours that the assessee has filed the RoI which was e- verified before 24:00 hours on 31.10.2023, the CPC’s action of disallowing the disallowing “loss of current year to be carried forward” to the tune of Rs.34,78,60,276/- [as reduced by Rs.46,15,565/- representing depreciation] is per-se erroneous being based on wrong assumption of facts; and therefore, the adjustment made by the CPC is erroneous, and hence needs to be deleted and we order accordingly. Further, it was brought to our notice that assessee has been trying to upload the ibid ROI/e-verifying for a long time since morning on 31st October and was unable to do so, for no fault of assessee but due to technical glitches of the systems maintained by the Revenue, but somehow assessee was able to upload it before 24:00 hours, so it can’t be said to be a belated act.
We hope these issues/technical glitches be looked into by the competent authority who are in charge of systems and sorted out, so that assessee would be able to file RoI as well as E-Verify with ease.
Coming to the contention of the Ld.DR that even if there is a delay of ‘05’ seconds or less time, the assessee had to file condonation application before the competent authority, and for such a contention has relied on the Circular No.9/2015 dated 09.06.2015 which according to us is not applicable in this case, because, we find that the assessee had uploaded ITR before 31.10.2023 and merely because, the acknowledgement of filing of ITR was generated after ’05’ seconds can’t in any manner be said to be belated filing of RoI and therefore, the adjustment made denying “loss of current year to be carried forward” to the tune of Rs.34,78,60,276/- [as reduced by Rs.46,15,565/- representing depreciation] is found to be on wrong assumption of fact that assessee belatedly uploaded its RoI as well as e-verified it, whereas assessee has successfully done it before 24:00 hours on 31.10.2023.
therefore, the impugned action of the CPC/First Appellate Authority is erroneous and so untenable and therefore, the addition made is directed to be deleted.
In the result, appeal filed by the assessee is allowed. Order pronounced on the 13th day of December, 2024, in Chennai.
Sd/- Sd/- (एस. आर. रघुनाथा) (एबी टी. वक�) (ABY T. VARKEY) (S.R.RAGHUNATHA) लेखा सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER