MOONLIGHT STUDIO,NAGPUR V. DY. COMMISSIONER OF INCOME TAX, CPC, BANGALORE

ITA 287/NAG/2023

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Moonlight Studio, a firm engaged in trading photographic items, filed an appeal against the order of the Deputy Commissioner of Income Tax, which was confirmed by the Commissioner of Income Tax (Appeals). The dispute arose from the non-allowance of carry forward of a business loss of Rs. 13,69,203 due to the late filing of the income tax return for the assessment year 2016-17. The return was filed on 18/10/2016, a day later than the due date of 17/10/2016, attributed to technical issues with the government's e-filing website. The Tribunal dismissed the appeal, stating that the late filing did not merit the carry forward of losses as per the statutory provisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24249 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Laws Referred To: Income-tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHAY Y. MARATHE
• Assessee Lawyers: SHIKHA LOYA
• Keywords: Condonation of delay; Reasonable cause; Depreciation; Unabsorbed depreciation
• Section: 154; 143(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER ITA no.287/Nag./2023 (Assessment Year : 2016–17) Moonlight Studio Variety Square, Sitabuldi Nagpur 440 012 PAN – AACFM8121G ……………. Appellant v/s Dy. Commissioner of Income Tax Central Processing Centre, Nagpur ……………. Respondent Assessee by : Ms. Shikha Loya Revenue by : Shri Abhay Y. Marathe Date of Hearing – 28/01/2025 Date of Order – 05/02/2025 O R D E R PER K.M. ROY, A.M. This appeal by the assessee is emanating from the impugned order dated 27/07/2023, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2016–17. 2. In its appeal, the assessee has raised following grounds:– “(1) That the order of the learned DCIT, CPC, Bangalore passed u/s. 154 of Income-tax is bed in law and wrong on facts and the learned CIT(A) erred in confirming the same. The learned CIT(A) erred in deciding the issue although the application for condonation of delay in filing the return of income was already pending for adjudication before the Hon'ble Chief Commissioner of Income Tax, Nagpur. (2) That the learned CIT(A) erred in law and on facts in confirming the action of AO in making adjustment to the returned income merely through electronic processing The action of AO is beyond the jurisdiction as provided in the 2 Moonlight Studio ITA no.287/Nag./2023 provision of section 143(1)/154 of the Act and learned CIT(A) erred in sustaining the same. (3) That the learned CIT(A) erred in law and on facts in upholding the order passed by AO and in not allowing the business loss of Rs. 13,69,203/- and consequently not allowing carry forward. On the facts and circumstances of the case, the assessee was in the process of filing of the ITR and the minor delay of few minutes was only due to heavy rush and slow working of the government's website. The reasonable cause for delay is not considered by both the authorities. (4) That for any other ground with kind permission of your honour at the time of hearing of appeal.” The factual matrix lies in a narrow compass. The assessee is a firm engaged in the business of trading in photographic items. Return of income was filed on 18/10/2016 declaring total loss of ` 16,25,177. The same consists of unabsorbed business loss of ` 13,69,203 and unabsorbed depreciation of ` 2,55,974. The due date of return was 17/10/2016. However, the assessee stated that due to heavy traffic on ITR e-filing site (incometaxindiaefiling. gov.in) and slow uploading, though the entire return was ready the same could not be uploaded before 12’o clock on 17/10/2016. The same was immediately uploaded after 12’o clock on same night but the date had changed to i.e., 18/10/2016. The assessee further stated that the return was processed and intimation under section 143(1) dated 26/10/2016 which was received by the assessee wherein the business loss of ` 13,69,203 was not carried forward. Subsequently, the assessee made an online rectification application to rectify the above mistake and get the carry forward of business loss of ` 13,69,203. The order under section 154 dated 22/09/2017 was passed wherein the business loss of ` 13,69,203 was not carried forward. 3 Moonlight Studio ITA no.287/Nag./2023 3. On appeal, the learned CIT(A) dismissed the assessee’s appeal by virtue of the impugned order vide Para–5.4 to 6, which are reproduced below:– “5.4. After duly considering the grounds of appeal, the statement of facts and the written submission filed during appeal proceedings, the appeal is decided as under: The Appellant, admittedly has filed return for the A.Y.2016-17 belatedly. The Appellant had adequate time to file return from 01.04.2016 to 30.09.2016/17.10.2016. But the Appellant has not filed within the time provided by the Act. Therefore the CPC has not allowed the business loss of Rs. 13,69,203/-to be carried forward to subsequent year. As the Appellant may be aware, the return, audit report etc are to be filed electronically by the tax payers. As the Appellant may be aware, of late, the return, audit report, etc, filed electronically by the tax payers are processed by the Central processing centre/computers. Considering the provisions of the Act, the CPC has not allowed the business loss of Rs.13,69,203/- to be carried forward to subsequent year Therefore it is hereby held that there is no merit in the appeal filed by the Appellant and the same is hereby dismissed. 5.4.1. Goes without saying, if the delay in filing the return is condoned by the Hon. PCCIT, the Appellant would be entitled/allowed to carry forward the Business loss of Rs. 13,69,203/- to subsequent year. 6.0. In the result, the appeal is DISMISSED.” 4. The learned Authorised Representative, Shri Rajesh Loya, appearing for the assessee reiterated the same facts which he made before the authorities below, but he could not point out any infirmity in their action. If the return of income is filed belatedly, provision of carry forward of losses will be governed by the provisions of sections 80, 72, 73, 74 and 74A of the Income Tax Act, 1961 (\"the Act\"). However, we find no mistake which is amenable for 4 Moonlight Studio ITA no.287/Nag./2023 rectification under section 154 of the Act. In any case, condonation application is pending, as informed. The case laws cited are distinguishable, as they were not filed against the order passed under section 154 of the Act. There is no merit in the appeal filed by the assessee and hence fails. Consequently, the grounds raised by the assessee are dismissed. 5. In the result, appeal filed by the assessee is dismissed. Order pronounced in the open Court on 05/02/2025 Sd/- V. DURGA RAO JUDICIAL MEMBER Sd/- K.M. ROY ACCOUNTANT MEMBER NAGPUR, DATED: 05/02/2025 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur "