2022 (5) TMI 1536 - AT - Income Tax

Disallowance of carry forward of loss - assessee filed its return was beyond the date - as per AO where the assessee has some capital loss or business loss from business or profession to be carried forward, the assessee should file its return of income within due date as prescribed u/s 139(1) - assessee filed return of income on the last date of filing, however, due to technical snag in the website of the partner on the date of filing return, the acknowledgement was received eleven minutes past 12 00 and the date of acknowledgement of return was reflected as 01/1/2015 instead of 30.10.2015 - CIT(A) held that the delay of 11 minutes is bonafide - HELD THAT - We find that in the case of Regen Infrastructure Services (P) Ltd. 2016 (3) TMI 875 - MADRAS HIGH COURT has held that when the delay in filing of the return was due to technical snags in the website of department, and return could not be uploaded and due to which the carry forward loss could not be denied to the assessee. Also in the case of ACIT Vs M/s Noel Pharma 2013 (11) TMI 1731 - ITAT HYDERABAD has also held that when delay was not because of any lapse on the part of assessee but due to technical reasons in uploading the return electronically and due to delay of few hours in getting connectivity and the date was changed from 30th September to 01st October. Thus, we affirm the order of the ld. CIT(A).Decided in favour of assessee.

Summary

Issues Involved:
- Disallowance of carried forward loss due to late filing of return of income.
- Justification for deleting the disallowance of loss.
- Technical snag as a reason for delay in filing the return of income.

Analysis:

Issue 1: Disallowance of carried forward loss due to late filing of return of income
The Revenue appealed against the order of the Commissioner of Income Tax (Appeals) regarding the disallowance of carried forward loss of Rs. 1,50,40,579/- by the assessing officer. The assessing officer noted that the assessee filed the return of income for AY 2015-16 on 01/11/2015, which was beyond the extended due date of 31/10/2015. The assessing officer issued a show cause notice for disallowance of the loss. The assessee claimed that the delay was due to technical issues on the filing website, which caused the return to be filed after the due date.

Issue 2: Justification for deleting the disallowance of loss
The assessee contended before the ld. CIT(A) that the delay in filing the return was due to technical issues beyond their control, as evidenced by the successful filing of another return before the due date. The ld. CIT(A) allowed the appeal, considering the delay as bonafide and permitted the carried forward loss. The Revenue challenged this decision before the Tribunal, arguing that the delay should not be condoned.

Issue 3: Technical snag as a reason for delay in filing the return of income
The ld. CIT(A) analyzed the submissions of the assessee and referred to legal precedents where delays due to technical snags were considered valid reasons for late filing. The Tribunal upheld the decision of the ld. CIT(A) based on legal principles and factual circumstances. The Tribunal cited the case of Regen Infrastructure & Services (P) Ltd. Vs CBDT and ACIT Vs M/s Noel Pharma, where delays caused by technical issues were not attributed to the assessee's fault and allowed the carry forward of losses. Consequently, the Tribunal dismissed the appeal of the Revenue, affirming the decision to permit the carried forward loss due to technical snag-induced delay in filing the return.

In conclusion, the Tribunal upheld the decision of the ld. CIT(A) to allow the carried forward loss, considering the technical snag as a valid reason for the delay in filing the return of income.