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2020 (8) TMI 265 - AT - Income TaxCarry forward the loss claimed in the revised return of income - Return filed by the assessee u/s. 139(5) - HELD THAT - We find merit in the submission of the Ld. AR. On an identical circumstance in KERALA STATE ELECTRONICS DEVELOPMENT CORPORATION LTD VERSUS DY. CIT, CIR. 1 (1) THIRUVANANTHAPURAM 2012 (3) TMI 655 - ITAT COCHIN had set-aside the order of the AO and the CIT (A) and directed the AO to process the revised return filed by the assessee u/s. 139(5) of the Act quantifying the loss in accordance with law by treating the return of loss filed u/s. 139(3) of the Act as if the return of income had been filed u/s. 139(1) of the Act. In the case of the assessee, it is apparent that the assessee had filed its return of loss within the due date of filing of the return U/s. 139(3) of the Act i.e., on 30/09/2015. Further, the assessee has revised its loss return for the second time u/s. 139(5) of the Act on 13/02/2017 i.e., within the expiry of one year from end of the relevant assessment year 2015-16. We hereby hold that the return filed by the assessee u/s. 139(5) of the Act is in accordance with law and therefore the assessee is entitled to carry forward the loss claimed in the revised return of income dated 13/02/2017 provided such loss computed is as per the provisions of the Act. - Decided in favour of assessee.
Issues:
1. Rejection of returned filed by the assessee under section 139(5) of the Income Tax Act. 2. Conversion of limited scrutiny to complete scrutiny disregarding CBDT instructions. Analysis: Issue 1: Rejection of returned filed by the assessee under section 139(5) of the Income Tax Act: The assessee, a Private Limited company in the Waste Management business, filed its original return of income declaring a loss. Subsequently, revised returns were filed, leading to scrutiny under CASS. The Assessing Officer (AO) made additions and rejected the revised return under section 139(5) of the Act. The CIT (A) upheld this decision. The Tribunal reviewed the case and referred to a similar precedent by the Cochin Bench, where the AO was directed to process the revised return. Citing the Madras High Court's decision, the Tribunal held that the return filed by the assessee was in accordance with the law. The Tribunal allowed the appeal, enabling the carry forward of the claimed loss. Issue 2: Conversion of limited scrutiny to complete scrutiny disregarding CBDT instructions: The assessee raised a fresh ground regarding the conversion of limited scrutiny to complete scrutiny, alleging that the AO erred by not following CBDT instructions. However, the assessee failed to provide substantial arguments or evidence to support this claim. Consequently, this ground was dismissed as the assessee did not substantiate their case adequately. The Tribunal acknowledged the delayed pronouncement of the order due to the Covid-19 pandemic but justified the decision based on extraordinary circumstances. The judgment partly allowed the appeal of the assessee, emphasizing the right to carry forward the loss as per the provisions of the Act. The decision was pronounced following the Mumbai Bench's precedent, ensuring fairness despite the unusual circumstances. This comprehensive analysis highlights the key issues addressed in the judgment, providing a detailed understanding of the Tribunal's decision on each matter.
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