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TMI Blog2022 (6) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that the Assessing Officer has erroneously allowed carry forward of the business loss. The Tribunal held that the Assessing Officer had not issued any defective memo in terms of section 139(9) of the Act and therefore defect in the original return of income stood removed by way of filing voluntarily revised return by the assessee. In the circumstances, the Tribunal (supra) held the original return of income filed by the assessee was valid return and holding the assessee eligible for carry forward of the business loss. Thus, in our opinion the ratio of the above decision of the Tribunal is not applicable of the facts of the instant case, as in this case there was no issue of any defect in the original return of income filed under section 139(1) and the revised return of income has only been filed in response to notice under section 153A of the Act, wherein the assessee has claimed the short-term capital loss. - Decided against assessee. - ITA No. 1402/MUM/2021 - - - Dated:- 14-6-2022 - Shri Kuldip Singh (Judicial Member) And Shri Om Prakash Kant (Accountant Member) For the Assessee : Mr. Madhur Agrawal, AR For the Revenue : Mr. Jasdeep Singh, CIT-DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eproduced as under: 6.1 The submission of the assessee is considered but the same is not acceptable because as far as disallowance u/s 14A of the IT Act is concerned, it has to be done as per Rule 8D which is discussed at length in ensuing para 13 of this order. Further, the inadvertent claim of STCG as LTCG is also not acceptable because such claim should be changed by the assessee in its return of income filed u/s 139(5) of the IT Act only. Thus, It is evident from the above that the assessee has enhanced its income in the return of income filed in response to notice u/s 153A by an amount of Rs. 4,46,23,904. In this regard, it is pertinent to mention here that the assessment or reassessment made pursuant to notice u/s 153A of the Act is not de novo assessment. The issuance of notice under s. 153A for all the six assessment years also does not entail altogether a fresh exercise of making fresh assessment. In fact, the apparent and logical purpose of calling for returns for all the six assessment years immediately preceding the year in which search is initiated is to dispense with the requirement of recording reasons for reopening the assessment and also to avoid any controver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, the issue here is not the allowability of a fresh claim before the AO through a return /s 153A of the Act. The case of the assessee represents an abated assessment and such claim could have been considered if allowable. However, it is noted that section 153A only overrides certain sections of the Act and not the computational sections provided in the Act. Section 80 which is reproduced below, clearly prohibits any carry forward of a loss unless it has been claimed through a return under section 139(3) of the Act: 80. Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of subsection (3) of section 139, shall be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73or sub-section (2) of section 73A or subsection (1) or sub-section (3) of section 740r sub-section (3) of section 74A. 5.5 In light of the clear provisions of the Act, the assessee cannot be allowed to carry forward the short term capital loss as the same has not been claimed through a return filed under section 139(3) of the Act. The claim of carry forward is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income. The Ld. CIT invoked proceeding under section 263 of the Act on the ground that the Assessing Officer has erroneously allowed carry forward of the business loss. The Tribunal held that the Assessing Officer had not issued any defective memo in terms of section 139(9) of the Act and therefore defect in the original return of income stood removed by way of filing voluntarily revised return by the assessee. In the circumstances, the Tribunal (supra) held the original return of income filed by the assessee was valid return and holding the assessee eligible for carry forward of the business loss. The relevant finding of the Tribunal (supra) is reproduced as under: 5. We have considered rival submissions and perused the material on record. We have also applied our mind to the decisions relied upon. Insofar as the factual aspect of the issue is concerned, there is no dispute that the assessee had filed its return of income on 27th September 2013, within the due date prescribed under section 139(1) of the Act. However, the original return of income filed by the assessee was not accompanied by the audit report as required under section 44AB of the Act. Subsequently, al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished the audit report. Therefore, the defect in the original return of income stood removed. That being the case, the original return of income has to be treated as a valid return and the assessee was eligible to claim carry forward of business loss. It is evident, the Assessing Officer has completed the assessment after taking note of both the original return of income as well as the revised return of income. Therefore, it cannot be said that the Assessing Officer has allowed carry forward of loss without proper examination. In the facts of the present case, the assessee itself has removed the defect without being intimated by the Assessing Officer. Therefore, the original return of income cannot be treated as invalid as there is no failure on the part of the assessee to remove the defect within the time limit permitted by the Assessing Officer. In fact, the provisions of section 139(9) of the Act have never been pressed into action in the instant case. Moreover, since the assessee has already filed the audit report, there is no question of Assessing Officer issuing a defect notice now in terms of section 139(9) of the Act for non filing of audit report. Therefore, exercise o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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