Income Tax Appellate Tribunal - Mumbai
Smt. Jaya Jawahar Kanungo vs Ito on 1 September, 2004
Equivalent citations: [2005]1SOT254(MUM)
ORDER
T.K. Sharma, JM This appeal filed by the assessee is directed against the order dated 16-1-2003 of the CIT (A)-XV, Mumbai, in retaining the disallowance of carry forward of loss under the head 'Capital gain' at Rs. 1,01,926 for the assessment year 2003-04.
2. The facts in brief are that the assessee is a partnership firm. For the assessment year under appeal, it filed return of income on 31-3-2002 declaring total income of Rs. 2,45,590. In this return of income, the assessee has also claimed loss of Rs. 1,01,926 under head 'Capital gain' to be carried forward. In the assessment order, the assessing officer observed that return of income furnished by the assessee is beyond the limitation of time for filing return of income under the provisions of sub-section (1) of section 139. The assessing officer also observed that as per sub-section (3) of section 139, the assessee may furnish a return of income within the time allowed under sub-section (1) of section 139 which is relevant sub-section related to carry forward of losses. The assessing officer rejected the contention of the assessee that a belated return filed under section 139(4) also be treated as regular return keeping in view the provisions contained in section 80 of the Income Tax Act, 1961. The assessing officer rejected the claim of the assessee to carry forward the, capital gain/loss to subsequent year.
3. The assessee carried the matter in appeal and in appeal in the impugned order, the learned CIT (A) upheld the action of the assessing officer on the ground that amended provisions of section 80 completely prohibits the determination of loss and it can forward and set off except where the return is filed under section 139(1). Aggrieved by this order of the CIT (A), the assessee is in appeal before the Tribunal.
4. At the time of hearing, on behalf of the assessee, Ms. Seema Bafna appeared and reiterated the submissions before the authorities below. She also contended that the assessee has furnished Return of Loss. Therefore, the assessee is entitled to carry forward loss determined by the assessing officer under the head 'Capital gains'.
5. On behalf of the revenue, Sh. Rameshwar Singh, the learned Departmental Representative appeared and supported the orders of the authorities below.
6. Having heard both the sides, I have carefully gone through the orders of the authorities below as well as the provisions contained in section 80 of the Income Tax Act, which states :
"Notwithstanding anything contained in this chapter, no loss which has not been determined in pursuance of a return filed (in accordance with the provisions of sub-section (3) of section 139), shall be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section 91 or sub-section (3) of section 74 or sub-section 93 of section 74A."
Section 80 is a substantive provision and its conditions are mandatory. It should be noted that there was no such absolute bar either in 1922 Act or even in 1961 Act till assessment year 1984-85. Section 80 in the present form starts with non obstante clause and, therefore, it permanently denying the benefit of carry forward and set off even in genuine cases, where the delay may be merely for a day and that too due to the circumstances beyond the control of the assessee. It has been long pending demand to remove such total and absolute bar.
7. As per provisions contained in section 80, in case a person who has sustained a loss in the previous year under the head 'Profit and gains of business or profession', including speculation loss, or under the head 'Capital gains', or under the head 'Income from other sources', if he seeks to carry them forward under section 72(1) or 73(2) or 74(1)/(3), then such loss can be carried forward and set off only if it is determined in pursuance of a return filed in accordance with the provisions of section 139(3). Section 139(3), in turn, mandates that :
(i) such person has to furnish a return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed, (so far no separate form of return is prescribed for loss return, it has to be a regular return as provided in rule 12) and,
(ii) such return must be furnished within the time allowed under section 139(1).
In the case before me, admittedly the return of income was furnished by the assessee which is within not in prescribed time under section 139(1). Therefore, keeping in view the provisions contained in section 80 of the Income Tax Act, the assessee is not entitled to carry forward of loss under the head 'Capital gains' and the learned CIT (A) is fully justified in upholding the action of the assessing officer in this regard. I, therefore, decline to interfere.
8. In the result, the appeal is dismissed.