SHANTI REFRIGERATION INDUSTRIES PVT. LTD.,PANTNAGAR vs. ACIT, CIRCLE- 1, HALDWANI

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ITA 6379/DEL/2017Status: DisposedITAT Delhi27 February 2018AY 2013-144 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the right to claim brought forward losses, once determined, cannot be taken away even if the return was not filed in time. The issue of adjusting brought forward business loss from current year's income requires a fresh adjudication.

What were the facts?

The assessee claimed brought forward losses, but the Assessing Officer rejected this as it was not claimed in the original return. The CIT(A) dismissed the appeal, noting the assessee's lack of specific submissions on business loss during appellate proceedings.

What were the issues?

Whether brought forward business losses can be adjusted against current year's income when the return was not filed within the prescribed time, and if the CIT(A) erred in not considering this aspect.

Which sections of the Income-tax Act were involved?

Section 139(3),Section 139(5)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, DELHI BENCH “SMC”, NEW DELHI

Before: SHRI R. K. PANDA

For Appellant: Shri Rahul Khare, Adv
For Respondent: Shri B. R. Mishra, Sr.DR

PER R. K. PANDA, AM : This appeal filed by the assessee is directed against the order dated 14.09.2017 of CIT(A), Haldwani relating to assessment year 2013-14.

2.

The only effective ground raised

by the assessee reads as under :-

1.

1. The learned CIT(A) erred in fact and in law in not allowing the benefit of assessed b/f losses which is not only illegal but also against the facts and circumstances of the case.”

3.

Facts of the case, in brief, are that the assessment in this case was completed u/s 143(3) on 16.03.2016 wherein the Assessing Officer rejected the claim of brought forward loss of earlier years on the ground that the same was not claimed at the time of filing of the return. While doing so, the Assessing Officer relied on the order of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. reported in 284 ITR 323, according to which, income cannot be assessed below the returned income. It may be pertinent to mention here that the assessee in its return of income filed on 30.09.2013 has declared income at Rs.33,95,610/- after claiming deduction under Chapter VI-A for Rs.9,82,763/-.

4.

In appeal, the ld. CIT(A) dismissed the appeal of the assessee by observing as under :-

“2. The contentions of the Appellant have been considered, however from a perusal of the records, it is seen that the Appellant in his Appeal has raised point in its grounds of Appeal that A.O. has not given the benefit of assessed b/f losses. However during Appellate proceedings A/R has filed submissions only regarding carry forward of unabsorbed depreciation loss and no written submission regarding brought forward of business loss. Hence in absence of any submission on the matter during Appellate Proceedings, the application of the Appellant cannot be accepted. Even otherwise losses not claimed in the original return unless under 139(3), cannot be claimed by filing revised return u/s 139(5) of Karnataka Forest Development Corporation Ltd. vs. CIT, ITAT Bangalore in of 2011 dated 30/03/2012. Accordingly the application of the Appellant is rejected.”

5. Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal.

6. I have considered the arguments made by both the sides and perused the orders of the Assessing Officer and the ld. CIT(A). I have also considered the various decisions cited before me. In my opinion, the matter requires a fresh look by the ld. CIT(A) regarding the adjustment of brought forward loss of earlier years. In my opinion, if such brought forward loss of earlier years has been determined by the Assessing Officer then in that case even though the assessee has not filed a return for the impugned assessment year in time, his right to claim the brought forward loss which was determined earlier cannot be taken away. As per the statute, the business loss cannot be carried forward to subsequent years, if the return is not filed in time as provided in the statute.

However, the same does not apply to the adjustment of brought forward business loss from the income of the current year. The various decisions relied on by the ld. counsel for the assessee supports his case. Therefore, I restore the issue to the file of the ld. CIT(A) with a direction to adjudicate the issue afresh after giving due opportunity of being heard to the issue. I hold and direct accordingly. The ground raised by the assessee is accordingly allowed for statistical purposes.

7.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on this 27th February, 2018.

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