2023 (3) TMI 1042 - AT - Income Tax

Due date for filing of Income Tax Returns - Assessee is non-resident - RBI permission letter mandating the assessee to get his accounts audited - Extension of due date of cases where accounts are required to be audited under the provisions of Income Tax Act while filing the income tax returns - loss claimed by the assessee disallowed to be carried forward to subsequent years as return was not filed within the due date prescribed u/s.139(1) - According to the ld. DR, only those cases where accounts of tax payers are required to be audited under the Income Tax Act alone would get extended time limit up to 17/10/2016 for filing the returns - AR stated that assessee is liable to get the accounts audited only as per RBI permission letter HELD THAT - We find that assessee s case herein falls under the ambit of Explanation 2(a)(ii) to Section 139(1) of the Act, as the assessee is liable for audit under any other law for the time being in force. We are of the considered view that due date of filing of income tax return is extended from 30/09/2016 to 17/10/2016 only in respect of assessees whose accounts are required to be audited under the Income tax Act. As in the second para of the press release dated 09/09/2016, the CBDT in categorical terms states that it has decided to extend the last date for such returns which was due on 30/09/2016 to 17/10/2016. The said extended due date benefit cannot be extended to those assessee s who were liable to get their accounts audited under any other law for the time being in force which is the case as that of the assessee before us. Hence, we hold that due date of filing of income tax return for the assessee for A.Yrs. 2016-17 is 30/09/2016 and not 17/10/2016 as contended by the ld. AR. From the perusal of the RBI permission letter dated 05/08/1985 mandating the assessee to get his accounts audited, we are of the considered opinion that what RBI mandate was only for the competence of the Chartered Accountant i.e. to say that a Chartered Accountant who is capable of auditing the corporate assessees should conduct the audit of the assessee herein. This was the sole mandate of RBI permission letter dated 05/08/1985. Due date for the assessee herein is only 30/09/2016 and not 17/10/2016. Hence, we hold that assessee is not entitled to carry forward business loss incurred during the year to subsequent years. Accordingly, the grounds raised by the assessee are dismissed.

Summary

Issues Involved:
The issues involved in the judgment are related to the confirmation of orders under sections 143(1) and 154 by the ADIT CPC, Bangalore, concerning the non-carry forward of business loss due to the interpretation of RBI's approval letter dated 5th August, 1985. The key issues include misinterpretation of the conditions of the approval letter, the due date for filing the return of income, and the requirement for audit of accounts.

Grounds of Appeal:
The appellant raised several grounds of appeal challenging the orders under sections 143(1) and 154. The grounds included errors in law by the CIT(A) in confirming the orders based on misinterpretation of RBI's approval letter, the non-carry forward of business loss, and the due date for filing the return of income. The appellant also argued that the accounts were audited by qualified chartered accountants as required by the Companies Act, 1956.

Assessee's Business Activities:
The appellant, a non-resident, was engaged in the business of Agencies of shipyards and marine electronics since 1975-76. The business was conducted under the proprietorship name of Nautilus International (India). The appellant obtained approval from the Reserve Bank of India in 1985 to continue the business as a non-resident, with a condition to audit the accounts by a chartered accountant.

Interpretation of Due Date for Filing Return:
The dispute revolved around the interpretation of the due date for filing the return of income for A.Y. 2016-17. The appellant claimed that the extended due date of 17/10/2016 applied due to the audit requirement specified in RBI's approval letter. However, the tribunal held that the due date was 30/09/2016, as per the provisions of the Income Tax Act, and the extension did not apply to cases not requiring audit under the Act.

Misunderstanding of RBI's Approval Letter:
The tribunal clarified that the requirement in RBI's approval letter for audit by a competent chartered accountant did not specifically mandate audit by a chartered accountant capable of auditing limited companies. The tribunal found that the CIT(A) had misunderstood this condition, and regardless of this misunderstanding, the appellant was not entitled to carry forward the business loss due to missing the due date for filing the return.

Decision and Dismissal of Appeal:
The tribunal dismissed the appeal, upholding the orders under sections 143(1) and 154 by the ADIT CPC, Bangalore. The tribunal held that the appellant was not entitled to carry forward the business loss incurred during the year due to missing the due date for filing the return of income as per the provisions of the Income Tax Act.

Separate Judgment by Judges:
No separate judgment was delivered by the judges in this case.