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Issues involved: Appeal against order u/s 263 of the Income-tax Act, 1961 for assessment u/s 143(3) for the assessment year 2004-05.
Summary: The assessee appealed against the order u/s 263 of the Income-tax Act, 1961, challenging the disallowance of carrying forward a loss due to delayed filing of the return of income. The Assessing Officer had determined the loss at Rs. 2,66,97,383 for the assessment year 2004-05. The ld. CIT found the assessment order erroneous and prejudicial to revenue as the return was filed after the due date. The assessee's submission for condonation of delay was not accepted, and the order was set aside for fresh assessment. The issue revolved around the eligibility of carrying forward the loss under section 80 of the Act. The ld. CIT observed that timely filing of the return to claim carried forward loss is mandatory under the law. The delay in filing the return made the assessee ineligible for carrying forward the loss, as admitted by the assessee. The order was deemed erroneous and prejudicial to revenue. The submission of an application to CBDT for delay condonation did not alter the decision, as no order was received. The assessment order was set aside for a fresh decision, allowing the assessee to be heard. The assessee contended that the delay in filing was beyond its control and should not penalize for reasons beyond its control. The ld. CIT's order was challenged, emphasizing that the loss determined by the Assessing Officer should be allowed to be carried forward for set off in subsequent years. The ld. D.R. supported the ld. CIT's decision, citing legal precedents. The Tribunal noted that the application for delay condonation was rejected by CBDT, but the issue was not under appeal. The Assessing Officer's use of "loss to be carried forward" was found erroneous as per section 80 provisions. The decision to carry forward and set off the loss in subsequent years is to be determined in those years, not in the current assessment. The order was partly allowed for statistical purposes, emphasizing the need for a fresh assessment to decide on the carrying forward of the loss in line with legal provisions. This judgment clarifies the importance of timely filing of returns and the procedural requirements for carrying forward losses under the Income-tax Act, ensuring proper assessment and compliance with statutory provisions.
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