2023 (8) TMI 153 - AT - Income Tax

Maintainability of appeal filed by the assessee against the order u/s. 143(1) - second rectification order passed by the CPC - income determined on setting off of business loss from the capital gain - HELD THAT - As it is noted that the CIT(Appeals) has dismissed the appeal as infructuous since the rectification application filed by the assessee has been disposed of by the CPC. CIT(Appeals) has not considered the issue on merits about the setting off of loss claimed by the assessee in his return and that even after the rectification order passed by the CPC, the position remains the same as in the intimation order. The assessee has filed appeal against the intimation letter passed by the CPC u/s 143(1) of the Act. Therefore, in the interest of justice, this issue is remitted to the CIT(Appeals) for fresh consideration and decision on merits as per law. Appeal by the assessee is allowed for statistical purposes.

Summary

Issues Involved:
The appeal against the order of the CIT(Appeals) dismissing the appeal as infructuous due to rectification application being disposed of by the CPC; Setting off of business loss from capital gain; Maintainability of appeal due to delay in filing; Need for fresh consideration on merits by the CIT(Appeals).

Setting off of Business Loss:
The assessee filed return of income reporting loss under profits & gains from business or profession, income from other sources, and long term capital gain. The CPC processed the return u/s. 143(1) restricting the carry forward of unabsorbed business loss. The assessee filed rectification applications u/s. 154 which were rejected. The CIT(Appeals) dismissed the appeal as infructuous without considering the merits of setting off the business loss. The appeal before the Tribunal raised the issue of maintaining the same position as in the intimation order despite rectification.

Maintainability of Appeal:
The ld. AR argued that the appeal filed before the CIT(Appeals) was not delayed, citing a Supreme Court judgment allowing an extended time limit due to COVID-19. The Tribunal noted that there was no delay in filing the appeal within the extended time frame as per the Supreme Court ruling, making the appeal maintainable.

Fresh Consideration on Merits:
After considering the submissions, the Tribunal found that the CIT(Appeals) had dismissed the appeal as infructuous without addressing the merits of the case. The Tribunal remitted the issue back to the CIT(Appeals) for fresh consideration and decision on merits, emphasizing the need for a fair hearing for the assessee and the submission of relevant documents for early disposal of the case. The appeal by the assessee was allowed for statistical purposes.