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TMI Blog2023 (12) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the AO who would deal with the assessment concerning the subsequent year. HELD THAT:- Section 79 of the Act prohibits carry forward and set off of losses that occurred in a period before the previous year, when in a previous year, there has been a change of shareholding unless the case fits in any of the provisos referred to therein. Tribunal, in sum, concluded that it was not within the remit of the AO, dealing with the AY in issue, to make an observation concerning an aspect that would fall within the jurisdiction of the AO, when the aspect concerning carry forward and set off losses would come to the fore A textual reading of Section 79 makes it evident that it does not empower an AO, who exercises jurisdiction qua a parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tend to deal with the appeal, on merits, the delay is condoned. 3. Accordingly, the application is disposed of. ITA 660/2023 4. This appeal concerns Assessment Year (AY) 2014-15. 5. Via the instant appeal, the appellant/revenue seeks to assail the order dated 05.12.2022 [stamped on 04.01.2023] passed by the Income Tax Appellate Tribunal [in short, Tribunal ]. 6. The short issue that emerges from the order of the Tribunal is whether the following observation, made in the assessment order dated 22.12.2016, was legally tenable: 3. B/F losses is not allowed to be carry forward as per para 3, 4, 5. 7. The record shows that the respondent/assessee filed its Return of Income (ROI) for the AY in issue i.e., A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in any year, could be carried forward to the following year, and set off against the profits had to be decided by the AO who would deal with the assessment concerning the subsequent year. 13.1 In support of this view, the Tribunal relied on the judgment rendered by the Supreme Court in Commissioner of Income-tax v. Manmohan Das (Deceased), (1966) 59 ITR 699 (SC) [05-11-1965]. 14. Mr Vipul Agrawal, learned senior standing counsel, who appears on behalf of the appellant/revenue, says that the view taken by the Tribunal is unsustainable in law since there was a change in shareholding of more than fifty-one (51) percent concerning the respondent/assessee and therefore, the aspect of whether or not business losses could be carried f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany which is a subsidiary of a foreign company as a result of amalgamation or demerger of a foreign company subject to the condition that fifty-one per cent shareholders of the amalgamating or demerged foreign company continue to be the shareholders of the amalgamated or the resulting foreign company.] (b) [Omitted by the Finance Act, 1988, w.e.f. 1-4-1989.] 16. Section 79 of the Act prohibits carry forward and set off of losses that occurred in a period before the previous year, when in a previous year, there has been a change of shareholding unless the case fits in any of the provisos referred to therein. 16.1 The Tribunal, in sum, concluded that it was not within the remit of the AO, dealing with the AY in issue, to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff against his profits and gains, if any, from the same business, profession or vocation for that year. Whether the loss of profits or gains in any year may be carried forward to the following year and set off against the profits and against the same business, profession or vocation under Section 24(2) has to be determined by the Income Tax Officer who deals with, the assessment of the subsequent year. It is for the Income Tax Officer dealing with the assessment in the subsequent year to determine whether the loss of the previous year may be set off against the profits of that year. A decision recorded by the Income Tax Officer who computes the loss in the previous year under Section 24(3) that the loss cannot be set off against the income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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