2014 (1) TMI 1279 - AT - Income Tax

Verification of original return furnished or not u/s 139(1) of the Act - Acknowledgement of return in violation of provision of Rule 46A of the Act Held that - The disentitlement for carry forward of loss under section 80 comes into play only when income tax return disclosing the loss sought to be carried forward, is not filed within the time prescribed under section 139(1) - the income tax return was originally filed within the due date - disentitlement under section 80 cannot come into play - the Assessing Officer did not even bother to examine the records in assessee s case and preferred to be guided by database records - The CIT (Appeals) remitted the matter to the file of Assessing Officer for necessary verification for allowing the set off of carry forward loss if same is admissible. Admission of additional evidence Held that - the contention is devoid of any merit - A document which is already on the file of Assessing Officer cannot be treated as additional evidence - The original income tax return was filed before the Assessing Officer and was very much part of his assessment records order of the CIT(A) upheld Decided against Revenue.

Summary

Issues:
1. Correctness of ld. Commissioner of Income Tax (Appeals)'s order in an assessment under section 143(3) of the Income Tax Act, 1961 for the assessment year 2009-10.
2. Whether the Assessing Officer erred in directing to verify the original return of income within the due date u/s 139(1) and admitting the acknowledgement of return dated 31.07.2008 in violation of Rule 46A of the I.T. Rules, 1962.

Analysis:

Issue 1: Correctness of ld. Commissioner of Income Tax (Appeals)'s order
The Assessing Officer challenged the order of the ld. Commissioner of Income Tax (Appeals) regarding the assessment under section 143(3) for the assessment year 2009-10. The Assessing Officer noted that the assessee had claimed a brought forward short-term capital loss, and based on the ITD database, it appeared that the return for the assessment year 2008-09 was filed after the due date. Consequently, the Assessing Officer denied the claim of set off of the brought forward loss. The assessee contended that the original return was filed within the due date, and produced a copy of the original income tax return. The ld. CIT(Appeals) directed the Assessing Officer to verify the claim and allowed the set off. The Tribunal upheld the decision, stating that the disentitlement under section 80 does not apply when the original return was filed within the due date.

Issue 2: Verification of original return filing and admission of additional evidence
The Assessing Officer raised concerns regarding the direction to verify the date of filing of the original return and the admission of additional evidence in the form of the acknowledgement of return dated 31.07.2008. The Tribunal found no merit in these contentions. It clarified that the disentitlement under section 80 is not applicable when the income tax return is filed within the prescribed time. Additionally, the Tribunal held that the acknowledgement of return filed within the due date cannot be considered as additional evidence since it was part of the assessment records. Therefore, the Tribunal dismissed the appeal filed by the Revenue, confirming the decision of the ld. CIT(Appeals) and declining to interfere in the matter.

This judgment emphasizes the importance of timely filing of income tax returns and the relevance of original documents in assessment proceedings. It clarifies the application of disentitlement provisions under section 80 and the criteria for admitting additional evidence in appellate proceedings.