2022 (5) TMI 1508 - AT - Income Tax

Late filling of return - Condonation of delay - DR submitted that late filing of return of income would disentitle the assessee to claim carry-forward of losses - HELD THAT - As seen that the assessee tried to upload the return for 21 hours on 31.10.2019 and ultimately got successful in filing the return of income past midnight and accordingly the delay of 12 minutes and 31 second occurred due to which the return of income was tagged as belated return. We fail to understand as to how the assessee could be termed as defaulter in such a case and what the assessee would have gained by filing the return of income with such a minor delay. It is also not the case of the revenue that the assessee is not entitled for carry forward of losses. We setaside the impugned order and restore the matter back to the file of Ld. CIT(A) to verify the fact that there was only a minor delay of 12 minutes and 31 seconds in filing of return of income as pleaded by the assessee. If so the return filed by the assessee would be considered as a return filed u/s 139(1) and the benefit of carry-forward of losses would be allowed in accordance with law. Assessee appeal stands allowed for statistical purposes.

Summary

Issues Involved:
Claim for carry-forward of losses denied due to late filing of return of income just past the deadline.

Analysis:
1. The appeal arose from the denial of carry-forward of losses for the Assessment Year 2019-2020 due to the return of income being filed 12 minutes and 31 seconds past midnight, missing the deadline. The assessee attributed the delay to technical issues on the Income Tax Portal. The Senior DR argued that late filing disentitles the assessee from claiming carry-forward of losses, suggesting seeking condonation under section 119(2)(b) of the Act. The Tribunal considered the submissions and the impugned order.

2. The assessee suffered business losses during the year and claimed carry-forward of losses, which the CPC reduced significantly due to the return being filed just past midnight. The assessee explained that they tried to upload the return for 21 hours on the due date but faced technical issues, resulting in the minor delay. The CIT(A) denied the claim, citing a CBDT Circular vesting authorities with powers to condone such delays under section 119(2)(b). The Tribunal noted the genuine cause of delay and referred to a High Court decision where delay of one day was condoned under similar circumstances, emphasizing that delay should not defeat a legitimate claim for carry-forward of losses.

3. The Tribunal criticized the CIT(A) for denying the claim based on technicalities, overlooking the genuine efforts made by the assessee to file the return within a minor delay. It questioned the characterization of the assessee as a defaulter and highlighted that the revenue did not dispute the entitlement to carry forward losses. The Tribunal emphasized the need for a justice-oriented approach and referenced the High Court decision to support the assessee's position.

4. Considering the facts and legal precedents, the Tribunal set aside the impugned order and remanded the matter to the CIT(A) to verify the minor delay in filing the return. If confirmed, the return would be considered filed under section 139(1), allowing the carry-forward of losses as per the law. The appeal was allowed for statistical purposes.

In conclusion, the Tribunal's decision focused on the genuineness of the delay in filing the return and upheld the assessee's right to claim carry-forward of losses despite a minor delay caused by technical issues. The judgment emphasized the need for a fair and just approach in such cases to prevent legitimate claims from being denied based on technicalities.