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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI RAJENDRA & SHRI SANJAY GARG
आदेश आदेश / O R D E R आदेश आदेश
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 10.4.2014 passed by Ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)]-32, Mumbai relevant to assessment year 2010-11.
The sole issue raised by the assessee in this appeal is regarding disallowance of carried forward loss.
The assessee during the year claimed set off of carried forward loss of Rs.89,55,039/-. However, the Assessing Officer (hereinafter referred to as the AO) noted that the perusal of assessment record for the assessment year 2008-09 revealed that the income of the assessee for that year had been assessed at Rs.NIL and that no losses had been allowed to carried forward. The AO did not allow set off of carried forward business loss of Rs. 89,55,039/- pertaining to assessment year 2008-09. In appeal, the assessee made the following submissions before the Ld. CIT(A):
“4.3 The submissions of the appellant are summarized as under :- i. It was submitted that the assessment for A.Y. 08-09 was completed u/s. 143(3) of the Act wherein full details in respect of loss were provided and scrutinized by the A.O. Further, the return of income was filed in time. ii. It was submitted that after considering the details filed, the AO has accepted the return of income filed by the appellant for A.Y. 08-09. It was contended that in the acknowledgement page of the return, the loss of Rs.89,55,039/- has been clearly shown in the A.Y. 08- 09 and therefore, the loss was correctly claimed and was accepted by the A.O. u/ s. 143(3) of the Act for A.Y. 2008-09. iii. It was contended by the assessee that the total income at Rs.NIL, shows that the AO has adjusted loss to the extent of positive income and balance loss is to be carried forward as shown in the return of income. Copy of return of income filed for AY 2008-09 and the assessment order was submitted along with the submissions made by the assessee. iv. It was contended that the AO has not fully understood the return of income filed for AY-08-09 and that the appellant has filed letter dated 5.3.2011 which was filed on 16.3.2011 requesting the AO to rectify the mistake. However, no rectification has been done. v. It was further submitted that if the A.O. would have verified the records, he would have found that this was mistake apparent from record. However, without any discussion, the AO wrongly did not allow; carried forward loss for adjustment against the income of the year. vi. It was accordingly requested to allow the carried forward losses to be adjusted against the income of this year.”
However, the Ld. CIT(A) rejected the contention of the assessee without going into the merits of the submissions observing that the contentions made by the assessee were in relation to the return of income filed for the assessment year 2008-09 and it was not open for him to issue any direction in relation to that assessment year. However, since the assessed income of the assessee for the assessment year 2008-09 was accepted at NIL. Hence, carried forward loss was not allowable. Therefore, he upheld the order of the AO.
At the time of hearing, the Ld. AR invited our attention to the assessment order for the assessment year 2008-09, wherein the AO vide assessment order passed u/s 143(3) of the Act has accepted the total income of the assessee. The Ld. AR has invited our attention to the page 79 of the paper book which is a copy of computation of income for the assessment year 2008-09, showing that the assessee had very much claimed business loss of Rs.89,55,039/- in the return of income. He has further invited our attention to the page 82 of the paper book which is a copy of acknowledgment of return of income filed for the assessment year 2008-09, wherein current losses have been duly claimed. The Ld. AR has further invited our attention to the various columns of the income tax return form to show that as per the columns of the form, if the income is in loss then the assessee has to fill relevant columns with ‘NIL’ income and further that in the column for profit and gains of business the assessee did show negative income and further in the relevant column of loss, the assessee has duly claimed the above loss. The Ld. AR has therefore submitted that as per the instructions of form of return, the assessee had shown NIL income and the assessee had also separately claimed loss and the return of income of the assessee had been accepted as such. In view of this, carried forward losses of the assessee have been deemed to be allowed by the AO in the year 2008-09. He further submitted that, the assessee had made an application dated 5.3.2011 for rectification u/s 154 of the Act to the concerned AO to rectify the assessment order specifically pointing out about the acceptance of the loss of the year which was required to be carried forward for the year under consideration. However, the AO has failed to dispose of the application despite repeated reminders sent to the AO in this respect.
We find that the Ld. CIT(A) has completely ignored the above submissions of the assessee and held that he was not supposed to pass any direction in respect of assessment year 2008-09. The issue relating to carried forward losses for the year under consideration is very much connected with the return of income for the assessment year 2008-09. The Ld. CIT(A) has failed to apply his mind to the submissions made by the assessee. So keeping in view the submissions of the Ld. A.R. and the relevant record produced before us, we restore this issue to the file of the Ld. CIT(A) with a direction to examine the contentions raised by the assessee, call remand report from the AO by directing the AO to dispose of the application filed by the assessee for rectification of the assessment order u/s 154 of the Act relevant to the assessment year 2008-09 and thereafter to give report about the claim of the assessee in the return of income regarding claim of loss in AY 2008-09 after considering the submissions of the assessee made in this respect and then decide the issue in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purposes.