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TMI Blog2023 (1) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... Id CIT (A), National Faceless Assessment Centre, erred in appreciating the fact that as per the Intimation for the A.Y. 2017--18 the loss of Rs.61,11,994/-- was already determined by the CPC as allowable loss. Hence, the Appellant was entitled to set off of the same. 4.1 On the facts and in the circumstances of the case the Learned CIT(A), National Faceless Assessment Centre, erred in appreciating the fact that it was not open for CPC to disallow the set off of loss already determined in the intimation for A.Y. 2017--18 without following the due procedure as per law. It was beyond the powers of CPC to ignore the brought forward loss of Rs. 61,11,994/-- already computed by the CPC as per the intimation for the A.Y. 2017--18 and not to allow the set off thereof. 5. On the facts and in the circumstances of the case the Ld.CIT(A),National Faceless Assessment Centre, erred in appreciating the fact that the Returns of Income filed by the Appellant were within the time limit as per Section 139(1), since the accounts of the Appellant were required to be audited as per the amended Trust Deed. 6. Without prejudice, On the facts and in the circumstances of the case the Id. CIT(A), Natio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o note that the due date of 31st July, was extended by the Central Government in some of the years by notification due to certain unavoidable circumstances.However, the assessee had not filed its return of income within the due date prescribed under clause (c) of Explanation 2 to sec. 139(1) or even within extended period in any of the earlier years. Further, the loss, even if it is eligible to be carried forward, could be carried forward only for eight succeeding assessment years. Hence the CPC did not allow set off of brought forward losses. Accordingly, it determined the total income of the assessee at Rs. 1,17,04,178/--. The due date considered by CPC and the date of filing of return of income of earlier eight years have been tabulated as under by Ld CIT(A):-- S. No. Asst. Year Due date of filing ROI Actual date of filing ROI 1 2010--11 04--08-2010 08--03--2011 2 2011-12 01--08-2011 19--03--2012 3 2012-13 01--08-2012 31--08--2012 4 2013-14 05--08-2013 27--09--2013 5 2014-15 31.07.2014 27--08--2014 6 2015-16 07--09-2015 30--09--2015 7 2016-17 05--08-2016 29--09--2016 8 2017-18 05--08-2017 12.08.2017 7. Before Ld CIT(A), the assessee contende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of set--off: Sr.No Assessment Year Due date of filing the return Date of filing the return 1 2010--11 04.08.2010 08.03.2011 2 2011--12 01.08.2011 19.03.2012 3 2012--13 01.08.2012 31.08.2012 4 2013--14 05.08.2013 27.09.2013 5 2014--15 31.07.2014 27.08.2014 6 2015--16 07.09.2015 30.09.2015 7 2016--17 05.08.2016 29.09.2016 8 2017--18 05.08.2017 12.08.2017 11. During the appellate proceedings, the assessee contended that the ADIT (CPC) has wrongly considered the due date of filing the return of income applicable to non--audit cases, for coming to the conclusion that the returns of income were not filed within the due date for the relevant assessment years. The assessee contended that the case of the assessee is required to be considered as an audit case and there is no delay in filing the return of income for any of the assessment years if the due date of filing the return as applicable to audit cases is taken into consideration. The assessee contended that it is a private trust which is governed by the provisions of the Indian Trust Act, 1882 and that its accounts have been audited for all the relevant years under the provisions of the said Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income specified therein for audit cases is not applicable to the assessee. 14. In view of the above, the due date of filing the return applicable to non--audit cases as specified in clause (c) of the Explanation 2 to section 139{1) is applicable to the assessee, as considered by the ADIT (CPC) in the Intimation u/s 143(1). Since the assessee failed to file the returns of income for the relevant assessment years 2010--11 to 2017--18 within the due date applicable to non--audit cases, the assessee is not eligible for carry forward and set--off of the business loss of the said assessment years as per the provisions of section 139(3) r.w.s 80 of the IT Act The claim of the assessee for set--off of such losses against the business income of the instant assessment year to the extent of available business income is therefore not in accordance with law. 15. The assessee contended that the claim of set--off of brought forward business losses cannot be disallowed in the instant assessment year, when the said business losses were allowed to be carried forward while processing the return of income for the earlier A.Y 2017--18. However, this contention of the assessee is also cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said request of the assessee cannot be accepted under the provisions of law. The loss declared in the returns of income cannot be modified unless the same is revised by the assessee under the provisions of the Act by ftting a revised return, in the absence of such furnishing of revised returns as per the provisions of Iaw7 the loss declared in the return cannot be subjected to any modification. This observation is made without prejudice to the finding rendered in the earlier paragraphs that the assessee is not legally entitled to the carry forward and set--off of the business losses pertaining to the A.Ys 2010--11 to 2017--18 in view of the delay in filing the returns of income for the concerned assessment years. 18. In view of the foregoing discussion, the disallowance of set--off of the brought forward business losses of A.Ys 2010--11 to 2017--18 against the current year business income to the extent of Rs.1,17,04,178/-- made in the Intimation u/s 143(1) is hereby sustained. These grounds of appeal are accordingly dismissed. 8. Aggrieved by the action of the Ld.CIT(A), the assessee is before us. 9. We have heard both the parties and perused the records. The facts discussed ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee pointed out that its trust deed provided for auditing of accounts. Though the assessee stated that the trust deed has been enclosed to the reply, it is noticed that the same was not enclosed. Regardless of whether the assessee supplied the copy of trust deed or not, it is evident that there is no requirement in the relevant law for auditing the books of account. Thus, it is seen that there is no legal requirement to get the books of account audited either under the Income Tax Act or the Indian Trust Act in the case of the assessee for any of the relevant assessment years. In the circumstances, it is held that the case of the assessee does not fall under the ambit of clause (a) of Explanation 2 to section 139(1) and that the due date of filing the return of income specified therein for audit cases is not applicable to the assessee." Before us also the assessee failed to bring to our notice any specific provision under any law which mandates that the assessee's books of account need to be audited. Therefore, we agree with the view taken by Ld CIT(A) that the assessee has to file its ROI on or before 31st July as per the clause (c) of Explanation 2 of section 139(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the rejoinder, the Ld A.R submitted that the ground urged by the assessee is a legal ground and all facts relating thereto are available on record. Accordingly, he submitted that this ground may be admitted and adjudicated by the Tribunal, as held by Hon'ble Supreme Court in the case of NTPC Ltd (229 ITR 383)(SC). 13. We have heard rival contentions on this issue. The essential question raised in the alternative contention is whether the principal portion of loan waived by the lender would be liable to be taxed u/s 41(1) of the Act or not. We notice that this is legal issue. Further a perusal of Profit and Loss account would show that the assessee has credited the P & L account with the waiver of interest portion and waiver of principle portion of loan. A perusal of the computation of total income would show that the assessee has not excluded principal portion of loan waived from the Net profit shown in the Profit and Loss account. Hence all facts relating to this issue is available on record.Accordingly, following the decision rendered by Hon'ble Supreme Court in the case of NTPC Ltd (supra), we admit this alternative contention. 14. The Ld A.R submitted before us that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cability of the Section 41 (1) of the IT Act. The said provision is re--produced as under: "41. Profits chargeable to tax.-- (1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee (hereinafter referred to as the first--mentioned person) and subsequently during any previous year, (a) the first--mentioned person has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income--tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or x x x" 15) On a perusal of the said provision, it is evident that it is a sine qua non that there should be an allowance or deduction claimed by the assessee in any assessment for any year in respect of loss, e ..... 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