2024 (1) TMI 857 - AT - Income Tax

Disallowance of claim of brought forward loss - considering the revised return of income filed u/s 139(5) to belated return of income filed u/s 139(4) and thereby denying assessee to carry forward the losses - HELD THAT - Counsel has taken us through the original return filed for the Assessment Year 2019-20 dated 26/11/2019 which depicts that, the assessee has filed the return well within the time limit specified under Explanation 2 to Section 139(1) of the Act which is 26/11/2019. The Ld. CIT(A) by recording wrong date of filing of the return by the assessee i.e. 20/02/2020 , for AY 2019-20 erroneously held that the assessee had filed the return belatedly, which ultimately resulted in not allowing the loss claimed by the assessee for Assessment Year 2019-20. Considering all we are of the opinion that the Ld. CIT(A) has committed error in not allowing the carry forward of losses accordingly, we direct the A.O. to allow the assessee to carry forward the loss for the Assessment Year 2019-20 as claimed by the assessee. Appeal of assessee allowed.

Summary

Issues:
The issues involved in the judgment are the disallowance of the claim of brought forward loss of Assessment Year 2019-20.

Summary:

Issue 1: Disallowance of claim of brought forward loss of AY 2019-20

The appeal was filed against the order of the Learned Pr. Commissioner of Income Tax(Appeals) for the Assessment Year 2020-21. The assessee claimed to carry forward its losses from AY 2019-20, amounting to INR 23,73,82,507. The original return for AY 2019-20 was filed within the specified time limit, but a revised return filed later was considered belated. The CIT(A) upheld the disallowance made by the Assessing Officer. The assessee contended that the original return was filed on time, and the error in considering the revised return as belated led to the disallowance. The Tribunal found that the CIT(A) erred in not allowing the carry forward of losses and directed the Assessing Officer to permit the carry forward of the loss amount for AY 2019-20.

The Tribunal noted that the original return for AY 2019-20 was filed within the specified time limit, but due to an error in considering a later revised return as belated, the carry forward of losses was disallowed. The Tribunal held that the CIT(A) erred in not allowing the carry forward of losses and directed the Assessing Officer to permit the carry forward of the loss amount for AY 2019-20, as claimed by the assessee.

In conclusion, the Tribunal allowed the appeal of the assessee, directing the Assessing Officer to allow the carry forward of the loss amount for AY 2019-20, which was erroneously disallowed by the CIT(A).

Order pronounced in open Court on 17th January, 2024.