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TMI Blog2022 (12) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has filed the return of positive income as well as return of loss at the first instance as per the time limit prescribed and subsequently, files the revised return then the revised return is treated as valid return. In the present case, as the assessee filed its original return declaring the positive income and hence, in our opinion, subsequent revised return is valid return also and the assessee is entitled to carry forward of long-term capital loss . Sub-sections (1) and (3) of section 139 provides for the different situations and in our opinion, there is no conflict in applicability of both the provisions as both the provisions are applicable in the different situations. Issue with regard to carry forward of short term capital loss claimed by the assessee should be directed to be examined by the AO afresh in the light of the observations made above. Accordingly, we allow the appeal of the assessee for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. The Assessee filed for Rectification and reprocessing of return of income under section 154 of the Income Tax Act 1961. The Assessee has received an order u/s 154 dated 23.6.2019, rejecting the claim by the Assessee and has disallowed carry forward of loss on the grounds that the return of income was not filed before the due date for filing u/s.139(1) by the assessee. 7. The CIT(Appeals), following the decision of the ITAT Visakhapatnam Bench in the case of M. Narendranath (Indl.) v. ACIT, [2005] 94 TTJ Visakha 284 held that the assessee was required to file return of income claiming loss in terms of section 139(3) of the Income-tax Act, 1961 [the Act] and that the provisions of section 139(5) are not applicable to a revised return where loss is claimed. Besides the above, the CIT(Appeals) also held that the issue was debatable and cannot be said to be a mistake apparent from the record. The appeal of the assessee was accordingly dismissed by the CIT(Appeals). 8. Aggrieved by the order of the CIT(Appeals), the assessee is in appeal before the Tribunal. 9. We have heard the rival submissions. The ld. counsel for the assessee brought to our notice a decision of the Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auses (i) to (vi) of section 143(1)(a). Hence, the contention of the assessee that the issue was debatable and not amenable to adjustment u/s.143(1)(a) of the Act has force. 13. Apart from the above, we find that the Mumbai Bench of the ITAT after considering the decision of the Vishakapatnam Bench in the case of M. Narendranath (Indl.) [supra] held as follows:- "9. In the background of these facts, we have to examine whether the assessee is entitled to claim of the carry forward of the long-term capital loss as per the revised return filed on 28-3- 2006. We have already stated that the original return was filed by the assessee is well within the time and there is no controversy on this aspect. Subsequently, the assessee filed the revised return and claimed that same is filed under sub-section (5) to section 139. As per the provisions of section 139(5) if the assessee has furnished the return under section 139(1) and subsequently discloses any wrong statement therein or which in his opinion is wrong then he can revise the return at any time before the expiry of the one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, when the assessee claims that he has no taxable income but only a loss but does not file the return of income declaring the said loss as provided in sub-section (3) of section 139. It is pertinent to note here that Legislature has dealt with two specific situations (i ) under section 139(1), if the assessee has a taxable income chargeable to tax then it is a statutory obligation to file the return of income within the time allowed under section 139(1). So far as section 139(3) is concerned, it only provides for filing the return of loss if the assessee desires that the same should be carried forward and set off in future. As per the language used in sub-section (3) to section 139, it is contemplated that when the assessee files the original return, at that time, there should be loss and the assessee desires to claim said loss to be carried forward and set off in future assessment years. Subsection (1) of section 139 cast statutory obligation on the assessee when there is positive income. In the present case, admittedly, the assessee filed the return of income declaring the positive income and even in the revised return, the assessee has declared the positive income as the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive income as the loss in respect of the sale of shares, which could not be set off, inter-source or inter-head under section 70 or 71 of the Act. As per the provisions of sub-section (5) to section 139, in both the situations where the assessee has filed the return of positive income as well as return of loss at the first instance as per the time limit prescribed and subsequently, files the revised return then the revised return is treated as valid return. In the present case, as the assessee filed its original return declaring the positive income and hence, in our opinion, subsequent revised return is valid return also and the assessee is entitled to carry forward of 'long-term capital loss'. Sub-sections (1) and (3) of section 139 provides for the different situations and in our opinion, there is no conflict in applicability of both the provisions as both the provisions are applicable in the different situations. In the light of the aforesaid decision of the Mumbai Bench of the Tribunal, we are of the view that the issue with regard to carry forward of short term capital loss claimed by the assessee should be directed to be examined by the AO afresh in the light of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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