2020 (3) TMI 298 - AT - Income Tax

Claim of loss by the assessee company in the revised return when the same was not claimed in original return - loss allowed to be carried forward and set off against income of subsequent years - whether once, original return of income was filed within the due date specified u/s 139(1), then any loss claimed by filing revised return within the due date specified u/s 139(5) can be allowed to be carried forward and set off against income of subsequent years? - HELD THAT - In the present case, the original return was filed on 24/09/2009, which is before the due date of filing return u/s 139(1) of the Act. Similarly, the assessee has filed revised return on 26/03/2011, which is before the due date of filing revised return i.e 31/03/2011. From the plain reading of section 139(3) r.w.s. 80 of the Act, it is clear that if assesee incurred a loss, which it claims to be carried forward, then it has to file its return of income within the time stipulated in section 139(1) of the Act, otherwise, the loss will not be carried forward. Since, the assessee has filed original return within the due date prescribed u/s 139(1), then any revised return filed, subsequently within the due date prescribed u/s 139(5) partaks, the nature of original return filed u/s 139(1) and consequently, the conditions prescribed u/s 139(3) of the Act, is fulfilled and accordingly, loss claimed shall be allowed to be carried forward under the relevant provision of the Act. Therefore, we are of the considered view that the Ld. AO was incorrect in invoking the provisions of section 80 of the I.T.Act, 1961 to allow loss as per original return filed u/s 139(1) of the Act. The Ld. CIT(A) after considering the relevant facts has rightly allowed set off of loss as per revised return filed for that year and rightly held that provision of section 80 of the Act, cannot be invoked in the present case. - Decided against revenue.

Summary

Issues Involved:
Claim of loss in revised return for Assessment Year 2012-13.

Analysis:
The appeal was filed by the revenue against the order of the Ld. Commissioner of Income Tax (Appeals) concerning the claim of loss by the assessee company in the revised return for Assessment Year 2012-13. The assessee had initially filed its return of income for the year, declaring a total income of Rs. Nil, considering brought forward losses from earlier years. However, the Assessing Officer restricted the brought forward loss for a previous year and disallowed the excess loss claimed in the revised return. The Ld. CIT(A) allowed the brought forward loss claimed by the assessee based on the revised return, stating that provisions of section 80 could not be invoked when a revised return was filed within the due date allowed under the Act. The revenue challenged this decision before the Appellate Tribunal.

The revenue contended that the Ld. CIT(A) erred in considering the claim of loss in the revised return when it was not claimed in the original return as legal and valid, contrary to the provisions of section 80 and section 139(3) of the Income Tax Act, 1961. On the other hand, the Ld. AR for the assessee argued that if the original return of income was filed within the due date specified under section 139(1), any loss claimed by filing a revised return within the due date specified under section 139(5) could be allowed to be carried forward and set off against income of subsequent years.

After hearing both parties and examining the facts and legal provisions, the Tribunal noted that the assessee had filed the original return within the due date as prescribed under section 139(1) and subsequently filed a revised return within the due date specified under section 139(5). The Tribunal interpreted the provisions of section 80 and section 139(3) of the Act, emphasizing that if an assessee incurs a loss to be carried forward, the return of income must be filed within the time stipulated in section 139(1). As the assessee had fulfilled these conditions, the Tribunal held that the Ld. CIT(A) was correct in allowing the set off of loss as per the revised return and in concluding that section 80 of the Act could not be invoked in the present case. Consequently, the appeal filed by the revenue was dismissed, upholding the findings of the Ld. CIT(A).