NCGB RETROFIT PVT. LTD.,KOLKATA V. D.C.I.T., CIRCLE - 11(1), KOLKATA, KOLKATA

ITA 1511/KOL/2024

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The case involves NCGB Retrofit Pvt. Ltd., which appealed against the order of the Ld. Addl/JCIT(A) confirming the action of the AO-CPC in not allowing the set off of brought forward business losses from A.Y. 2021-22 and A.Y. 2022-23 against the income of A.Y. 2023-24. The primary contention was whether the losses from earlier years could be set off despite the return for A.Y. 2023-24 being filed after the due date. The Tribunal found that the returns for A.Y. 2021-22 and A.Y. 2022-23 were filed within the due dates, and thus, the losses should be allowed to be carried forward and set off against the income of A.Y. 2023-24, subject to verification of the filing date for A.Y. 2021-22.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 25774 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2023-2024
• Appeal Filed On: 11-07-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYA PAL
• Assessee Lawyers: ANUP SINGH
• Keywords: Revised return
• Section: 250; 154; 143(1); 139(1); 139; 234B; 139(4)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA BEFORE SHRI SONJOY SARMA, JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No. 1511/KOL/2024 Assessment Year: 2023-24 NCGB Retrofit Pvt. Ltd. 3A, St. George Terrace, Kolkata-700022, West Bengal Vs DCIT, Circle-11(1), Kolkata Aaykar Bhavan, P-7, Chowringhee Square, Kolkata-700069, West Bengal (Appellant) (Respondent) PAN: AAACN8752B Present for: Appellant by : Shri Anup Singh, AR Respondent by : Shri Supriya Pal, DR Date of Hearing : 24.09.2024 Date of Pronouncement : 06.12.2024 O R D E R PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Ld. ADDL/JCIT(A)-12, Mumbai (hereinafter referred to as “the Ld. Addl/ Jt. CIT (A)” ) passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2023-24 dated 22.05.2024, which has been passed against the intimation u/s 143(1) of the Act issued by the CPC, Bengaluru. 2. The grounds of appeal raised by the assessee are reproduced as under: “1. That on the facts and in the circumstances of the case and in law, the Learned Additional/Joint Commissioner of Income Tax (Appeals) (hereinafter referred to as the 'Ld. ADDL/JCIT(A)] erred in confirming the action of the AO-CPC in determining the total income at Rs. 43,88,083/- and the tax payable at Rs. 5,90,450/- without setting off losses pertaining to the earlier years amounting to Rs. 19,88,363/- 2. That on the facts and in the circumstances of the case and in law, the Ld. ADDL/JCIT(A) erred in confirming the action of the AO-CPC in determining the total income at Rs.43,88,083/-without setting off losses pertaining to the earlier years on the alleged ground that the appellant company had not filed return of income within the due date or extended due date for the assessment year 2023-24without appreciating that the date of filing of return of income for the assessment year 2023-24was irrelevant for setting off losses pertaining to the earlier years. Page | 2 ITA No.1511/KOL/2024 NCGB Retrofit Pvt. Ltd.; A.Y. 2023-24 3. That on the facts and in the circumstances of the case and in law, the Ld. ADDL/JCIT(A) erred in confirming the action of the AO-CPC in determining the total income at Rs.43,88,083/- without setting off losses pertaining to the earlier years for a sum of Rs. 19,88,363/-, without appreciating that the aforesaid losses pertained to the assessment year 2021-22 and 2022-23 which had been carried forward by the appellant company in the return of income and the same had been duly accepted by the AO-CPC vide orders issued under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the 'Act') for the aforesaid assessment years. 4. That on the facts and in the circumstances of the case and in law, the Ld. ADDL/JCIT(A) erred in confirming the action of the AO-CPC in charging interest under section 234B and 234C of the Act. 5. That the appellant craves leave to add to and/ or amend, alter, modify or rescind the grounds hereinabove before or at the time of hearing of appeal.” 3. The brief facts of the case are that the assessee NCGB Retrofit Private Limited (PAN AAACN87518) was having income under the head Profits and Gains of Business or Profession during the financial year 2022-23. The assessee filed its original return of income for Asst Year 2023-24 on 13th October 2023 showing total income of Rs. 23,99,720 after adjustment of brought forward business Loss amounting to Rs.19,88,363 in the aggregate. The return was revised on 24/11/2023, after some minor correction, but without changing the total income. The aforesaid brought forward losses pertained to AYs 2021-22 and 2022-23 for Rs. 16,44,243 and Rs. 3,44,120 respectively and both the returns had been filed on 31.12.2021 and 23.09.2022 respectively, which were within the due date/extended due date for the Assessment Years concerned. While processing the revised return for the A.Y. 2023- 24 of the assessee under Section 143(1) of the I.T. Act, 1961 on 22/12/2023, the Ld. AO did not consider the brought forward business losses of Rs.19,88,363 without giving any reason thereof. Aggrieved with the said intimation, the assessee filed an appeal before the Ld. Addl./Joint CIT(A), who noted in Para 3.1 of his order that the brought forward losses pertained to A.Y. 2021-22 and A.Y. 2022-23 for Rs. 16,44,243 and Rs.3,44,120 respectively Page | 3 ITA No.1511/KOL/2024 NCGB Retrofit Pvt. Ltd.; A.Y. 2023-24 and both the returns had been filed within the extended due date. The Ld. AO also noted that the return for A.Y. 2023-24 had not been filed within the due date u/s 139(1) of the Act, as the same was filed on 24.11.2023 while the due date as well as the extended due date was 31.10.2023. It was also noted that a rectification order was passed by the CPC on 30.01.2024, which was in response to the application u/s 154 of the Act dated 23.12.2023 for rectification of the intimation u/s 143(1) of the Act. The Ld. Addl./Jt. CIT(A) also noted that the assessee had filed the revised ITR on 24.11.2023 which was almost one month after the original/extended due date of 31.10.2023, which demonstrates that the assessee had not filed the ITR in time and therefore, was not entitled to carry forward the losses since the return was not filed within the due date. The cases relied upon by the assessee did not hold good as the assessee had not filed the ITR of A.Y. 2023-24 within the due date and the appeal of the assessee was dismissed. Aggrieved, with the order of the Ld. Addl./Jt. CIT(A), the assessee has filed the appeal before the Tribunal. 4. We have heard the rival contentions and perused the materials available on record. The Ld. Addl./Jt. CIT(A) has noted that the returns for A.Ys. 2021-22 and 2022-23, were filed on 31.12.2021 and 23.09.2022 respectively, which were within the due date/ extended due date for the assessment years concerned. It was brought to our knowledge that Section 80 prohibits only the carry forward and set off of loss which has not been determined in pursuance of return filed in accordance with the provisions of sub- section (3) of section 139 of the Act. The assessee contends that the returns for A.Ys. 2021-22 and 2022-23 were filed within the due dates and merely because the return for A.Y. 2023-24 and the revised return were filed on 13.10.2023 and 24.11.2023 Page | 4 ITA No.1511/KOL/2024 NCGB Retrofit Pvt. Ltd.; A.Y. 2023-24 respectively, which according to the Ld. Addl./Jt. CIT(A) were not filed within due date, the brought forward losses could not be disallowed from being set off as for setting off the brought forward loss, there is no requirement of filing the return within the due date and the claim could be allowed even in the case of a return filed within the extended period. The Ld. DR did not oppose the claim that even if the date of filing is 24.11.2023 for the revised return, the brought forward losses of the earlier years could be set off against the income of the current year. 5. We have considered the submissions made. The Ld. Addl./Jt. CIT(A) has not specified which of the two returns of A.Ys. 2021-22 and 2022-23, were not filed within the due date as required under section 139(3) of the Act, so that the losses for those years could not be set off during the current year while we note that the return for A.Y. 2022-23 stated to be filed on 23.09.2022 was filed within the due date and the loss had to be allowed to be carried forward for being set off in subsequent years as per law. There is no requirement in section 80 of the Act that for setting off losses of the earlier years, the return for the assessment year in which the loss is to be set off has to be filed within the due date specified u/s 139(3) of the Act. Accordingly, if the returns for A.Ys. 2021-22 and 2022-23, were filed within the due date specified u/s 139(3) of the Act, the assessee was entitled to set off the brought forward loss in A.Y. 2023-24, even if the return for A.Y. 2023-24 has been filed u/s 139(4) of the Act. Accordingly, the Ld. AO is directed to verify the date of filing of return of A.Y. 2021-22 and in case, this return also has been filed within the due date specified u/s 139(3) of the Act, allow the set off of brought forward losses for both the assessment years against the income of A.Y. 2023-24. Ground nos. 1, 2 & 3 are allowed, subject to the verification of the date of filing Page | 5 ITA No.1511/KOL/2024 NCGB Retrofit Pvt. Ltd.; A.Y. 2023-24 of return of A.Y. 2021-22 and the same being within the due date specified u/s 139(3) of the Act. 6. Ground no.4, relating to the charging of interest u/s 234B and 234C of the Act is consequential to the income determined after setting off the losses claimed and the Ld. AO is directed to recompute the interest, if required. 7. Ground no.5, being general in nature, does not require any adjudication. 8. In the result, the appeal of the assessee is allowed, subject to the verification as mentioned. Order pronounced in the Court on 6th December, 2024 at Kolkata. Sd/- Sd/- (SONJOY SARMA) (RAKESH MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated 06. 12.2024 *SS, Sr.Ps आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अिीिार्थी / The Appellant 2. प्रत्यर्थी / The Respondent 3. संबंतिि आयकर आयुक्त / Concerned Pr. CIT 4. आयकर आयुक्त ( अिीि ) / The CIT(A)- 5. तिभागीय प्रतितिति , अतिकरण अिीिीय आयकर , कोिकािा/DR,ITAT, Kolkata, 6. गार्ड फाईि / Guard file. आदेशािुसार/ BY ORDER, TRUE COPY Sr. PS/ Assistant Registrar आयकर अिीिीय अतिकरण ITAT, Kolkata "