2014 (8) TMI 116 - HC - Income Tax

Reopening of assessment u/s 148 Carry forward of losses Held that - When the case was reopened looking into certain discrepancy the action of the AO is correct because the aseessee filed revised return of AY 2003-04 wherein the losses of earlier years were not claimed - The revised return was filed and when the AO concluded that the losses were not carry forward in the revised return as well, that the finding of such a claim having been given up, has been rendered - there was no satisfactory explanation given for the losses claimed in the earlier years and except for AY 2002-03 the Tribunal did not commit any error of law apparent on the face of the record, or perversity in dismissing the assessee s appeal and upholding the concurrent view - it is the claim and which was based on the carry forward of the past losses, it is held to have been given up thus, no substantial question of law arises for consideration Decided against Assessee.

Summary

Issues involved:
Assessment year 2003-04, substantial question of law, incorrect understanding of legal provision, waiver of right, reassessment, carried forward losses, revised return, discrepancies, Tribunal's decision.

Analysis:
1. The appellant filed an appeal challenging the Tribunal's decision confirming the findings of the Assessing Officer and the Commissioner of Income Tax (Appeals) for the assessment year 2003-04. The appellant argued that the appeal raises a substantial question of law due to an incorrect understanding of the legal provision by the authorities. The appellant contended that there was no waiver of rights as claimed by the Tribunal, citing Section 80 of the Income Tax Act, 1961, and a judgment of the Supreme Court. The Tribunal's conclusion was deemed erroneous by the appellant.

2. The appellant, engaged in the business of investment in shares and securities, had filed returns for the years 2002-03 and 2003-04, declaring losses and carrying forward losses from previous years. The Assessing Officer reopened the assessment for 2002-03, leading to a revised return showing nil income. Subsequently, the assessment for 2003-04 was also reopened, and discrepancies were found in the carried forward losses claimed by the appellant in the original and revised returns. The Commissioner of Income Tax (Appeals) upheld the Assessing Officer's decision, stating that the losses claimed in the earlier years were not disclosed in the revised return for 2003-04.

3. The High Court upheld the decision of the Tribunal, stating that there was no error of law in the concurrent findings. The Court found that the Tribunal's conclusion, although possibly based on an erroneous choice of words, did not give rise to a substantial question of law. The Court emphasized that the appellant failed to provide a satisfactory explanation for the claimed losses in the earlier years, except for the assessment year 2002-03. The Court dismissed the appeal, stating it was devoid of merits and awarded no costs.

This comprehensive analysis covers the issues involved in the legal judgment, detailing the arguments presented by the appellant, the discrepancies in the carried forward losses, and the final decision of the High Court affirming the Tribunal's decision.