ACIT/DCIT, Circle-6(1), Kolkata, Kolkata V. M/s Lark Wires & Infortech Ltd., Kolkata

ITA 145/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4550 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Carry forward of business losses; Competent authority
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI ABY. T. VARKEY, JM & SHRI M. BALAGANESH, AM ] I.T.A NO. 145/KOL/201 7 ASSESSMENT YEAR : 2009-1 0 ACIT/DCIT, CIRCLE-6(1), KOLKATA -VS- M/S L ARK WIRES & INFOTECH LTD. [PAN: AAACV 9133 G ] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SALLONG YADEN , ADDL. CIT, SR. DR FOR THE RESPONDENT : SHRI ASIM CHOUDHURY, ADV OCATE DATE OF HEARING : 12.07.2018 DATE OF PRONOUNCEMENT : 01.08.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE OR DER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-8, KOLKATA [IN SHORT THE LD CIT (A)] IN APPEAL NO. 8/10253/2011- 12 DATED 03.11.2016 AGAINST THE ORDER PASSED BY TH E DCIT, CIRCLE-6, KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3)/115WE3 OF THE INCO ME TAX ACT, 1961 (IN SHORT THE ACT) DATED 27.12.2011 FOR THE ASSESSMENT YEAR 20 09-10. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE ASSESSEE IS ELIGIBLE TO CARRY FORWARD THE LOSS OF RS. 7,45,92,676/-, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS APPEAL IS THAT THE ASSES SEE IS A PUBLIC LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF ENAMELED COPPER WIRE AND HAD FILED ITS RETURN OF 2 ITA NO.145/KOL/2017 M/S LARK WIRES & INFOTECH LTD. A.YR.2009-10 2 INCOME FOR THE ASSESSMENT YEAR 2009-10 ELECTRONICAL LY ON 01.10.2009, WITH A DELAY OF ONE DAY BEYOND THE DUE DATE OF FILING THE RETURN OF INCOME U/S 139(1) OF THE ACT. THE DUE DATE OF FILING THE RETURN OF INCOME FOR THE ASS ESSMENT YEAR 2009-10 IN RESPECT OF COMPANIES WAS 30.09.2009. IN THE SAID RETURN, THE A SSESSEE RETURNED BUSINESS LOSS OF RS. 7,46,26,888/- THE ASSESSEE LATER FILED REVISED RETU RN ON 31.03.2010 ELECTRONICALLY DECLARING TOTAL LOSS OF RS. 7,46,26,888/- UNDER NOR MAL PROVISIONS OF THE ACT AND RS. 7,15,47,358/- AS BOOK LOSS U/S 115JB OF THE ACT. TH E LD. AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT ON 27.12.2011 DETERMINING THE ASSESSED BUSINESS LOSS AT RS. 7,45,92,676/- AFTER MAKING DISALLOWANCE OF RS. 34,2 12/-. THE LD. AO OBSERVED IN THE ASSESSMENT ORDER THAT SINCE THE RETURN OF INCOME WA S FILED BY THE ASSESSEE ON 01.10.2009 WHICH IS BEYOND THE DUE DATE U/S 139(1) OF THE ACT, THE ASSESSEE IS NOT ENTITLED TO CARRY FORWARD THE BUSINESS LOSS OF RS. 7,45,92,676/- IN VIEW OF THE SPECIFIC PROVISIONS OF SECTION 139(3) READ WITH SECTION 80 O F THE ACT. THE LD. AO HOWEVER ALLOWED THE CARRY FORWARD OF UNABSORBED DEPRECIATIO N LOSSES BROUGHT FORWARD FROM EARLIER YEARS TO THE TUNE OF RS. 8,70,54,731/- TO S UBSEQUENT YEARS. 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) SEEKING FOR THE BENEFIT OF CARRY FORWARD OF ASSESSED BUSINESS LOSS OF RS. 7,45 ,92,676/- FOR THE ASST YEAR 2009-10 TO SUBSEQUENT YEARS. IT WAS PLEADED BEFORE THE LD. CIT(A) THAT THE ASSESSEE PREPARED AND UPLOADED THE RETURN FOR FILING IN LATE HOURS ON 30. 09.2009, AND THAT DUE TO TECHNICAL DIFFICULTIES IN THE SERVER OF THE INCOME-TAX DEPART MENT, THE DATE OF FILING OF THE DATA UPLOADED HAS COME OUT IN ACKNOWLEDGMENT OF RETURN A S FILED ON 01.10.2009. ACCORDINGLY , IT WAS PLEADED THAT THERE WAS NO FAUL T ON THE PART OF THE ASSESSEE THAT RETURN WAS NOT FILED IN DUE TIME. THE LD. CIT(A) AC CEPTED THIS EXPLANATION AND HELD THAT IN INITIAL YEARS OF E-FILING SYSTEM AND PROCESSES O F THE DEPARTMENT, THESE TYPE OF TECHNICAL DIFFICULTIES ARE BOUND TO HAPPEN WHICH WO ULD IN TURN CONTRIBUTE TO DELAY IN GETTING THE RETURN UPLOADED ELECTRONICALLY AND ACCO RDINGLY, HE CONDONED THE DELAY AS ATTRIBUTABLE DUE TO TECHNICAL ISSUES BEYOND THE CON TROL OF THE ASSESSEE. CONSEQUENTIALLY, 3 ITA NO.145/KOL/2017 M/S LARK WIRES & INFOTECH LTD. A.YR.2009-10 3 HE DIRECTED THE LD. AO TO ALLOW THE BENEFIT OF THE CARRY FORWARD OF THE BUSINESS LOSS OF RS. 7,45,92,676/- WHICH WAS ASSESSED U/S 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2009-10. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL SUBMISSIONS. THE FACT STATED HEREINABOVE ARE NOT REITERATED FOR THE SAKE OF BREVITY. THE LANGUAGE OF THE LAW IS VER Y CLEAR THAT THE ASSESSEE IN ORDER TO GET THE BENEFIT OF CARRY FORWARD OF BUSINESS LOSSES HAS TO FILE THE RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT. THE PROVISIONS OF SECTION 139(3) READ WITH SECTION 80 OF THE ACT MAKE IT VERY CLEAR THAT IF RETURN IS NOT FILED WITHIN THE DUE DATE U/S 139(1) OF THE ACT, THEN THE ASSESSEE WOULD BE DEPRIVED FROM GETTING THE BENEFIT OF CARRY FORWARD OF BUSINESS LOSSES. THOUGH AN ORAL CLAIM WAS MADE BY THE LD. AR BEFORE US THAT THE ASSESSEE COMPANY HAD STARTED UPL OADING THE RETURN IN THE LATE HOURS ON 30.09.2009 AND BECAUSE OF TECHNICAL GLITCHES ON THE SERVER OF THE INCOME-TAX DEPARTMENT, THE SAME COULD NOT BE UPLOADED BEFORE 1 2 A.M. ON 30.9.2009 AND BY THE TIME IT GOT UPLOADED, IT WAS PAST 12 A.M. ON 1.10.2 009 AND DATE OF UPLOADING THE RETURN ELECTRONICALLY WAS REFLECTED IN THE INCOME-TAX RETU RN ACKNOWLEDGMENT AS 01.10.2009. THOUGH IT COULD BE APPRECIATED THAT THE ASSESSEE SH OULD NOT BE MADE TO SUFFER BY DEPRIVING THE BENEFIT OF CARRY FORWARD OF LOSSES FO R THE REASON BEYOND ITS CONTROL, THE FACT AS TO WHETHER AT ALL THERE WERE ANY TECHNICAL GLITCHES ON THE SERVER OF INCOME-TAX DEPARTMENT ON 30.09.2009 WAS NOT PROVED BY THE ASSE SSEE BEFORE US THROUGH COGENT EVIDENCE. WE FIND THAT E-FILING WEBSITE OF THE INCO ME-TAX DEPARTMENT AT PRESENT PROVIDES THE TIME AT WHICH THE RETURN WAS UPLOADED BY THE ASSESSEE AND THE SAME IS ALSO REFLECTED IN THE ITR ACKNOWLEDGMENT. HOWEVER, THE T IME AT WHICH THE RETURN WAS UPLOADED FOR THE ASSESSMENT YEAR 2009-10 IS NOT REF LECTED IN THE ITR ACKNOWLEDGEMENT FILED BEFORE US. IN THESE CIRCUMSTANCES, IN THE INT EREST OF JUSTICE AND FAIR PLAY AND IN ORDER TO ASCERTAIN THE FACTS OF THE ASSESSEE, WE DE EM IT FIT AND APPROPRIATE TO REMAND THIS APPEAL TO THE FILE OF LD. AO WITH A DIRECTION TO AS CERTAIN THE TIME OF UPLOADING OF THE INCOME TAX RETURN ELECTRONICALLY FOR THE ASSESSMENT YEAR 2009-10 BY THE ASSESSEE FROM 4 ITA NO.145/KOL/2017 M/S LARK WIRES & INFOTECH LTD. A.YR.2009-10 4 CENTRAL PROCESSING CENTRE, BENGALURU OR FROM ANY OT HER COMPETENT AUTHORITY IN THIS REGARD. IT IS A FACT THAT IN THE INITIAL YEARS OF U PLOADING OF E-FILING OF RETURNS, CONSIDERABLE TIME WAS CONSUMED FOR UPLOADING OF EAC H RETURN SAY CLOSE TO 2 HOURS FOR EACH RETURN. HENCE IF THE TIME AT WHICH THE RETUR N WAS UPLOADED WAS NEARER TO THE TIME BEYOND 12 A.M. ON 1.10.2009, THEN THE ARGUMENT OF T HE ASSESSEE THAT IT HAD STARTED UPLOADING THE RETURN ON 30.9.2009 BUT COULD NOT COM PLETE BEFORE 12 A.M. ON 30.9.2009 DESERVES TO BE ACCEPTED. THE LD AO IS DIRECTED TO VERIFY THE SAME AND PASS ORDER IN ACCORDANCE WITH LAW. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 01.08 .2018 SD/- SD/- [A.T. VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01.08.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. ACIT/DCIT, CIRCLE-6(1), KOLKATA, P-7, CHOWRINGHE E SQUARE, KOLKATA-700069. 2. M/S LARK WIRES & INFOTECH LTD., 19, R.N. MUKHERJ EE ROAD, KOLKATA-700001. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S