Back
2024 Supreme(Online)(ITAT) 565
INCOME TAX APPELLATE TRIBUNAL (AGRA BENCH)
SHRI RAMIT KOCHAR, ACM
Paramsukh Infradevelopers LLP – Appellant
Versus
Income-tax Officer – Respondent
ITA No. 56/Agr/2023
For the Appellant:Sh. Rajni Kant Verma, Advocate
For the Respondent: Sh. Shailendra Srivastava, Sr. DR
A limited liability partnership's return filed within audit obligations is timely; thus, business losses may be carried forward.
Headnote:(A) Income-tax Act, 1961 - Section 143(1) and 139(1) - Limited Liability Partnership Rules, 2009 - Whether return filed within due date - Assessee filed return on 17.09.2019 claiming losses but was treated as belated by revenue - Court held that due to audit requirements, the return was timely, allowing carry forward of business losses. (Paras 4, 6.2, 6.3, 6.4)
(B) Due date for filing return - The court analyzed audit requirements under LLP Act, finding the return filed within audit-related timelines, thereby allowing loss carry forward. (Paras 6.1, 6.3, 6.4)
Facts of the case:
Assessee claimed a loss of Rs. 16,96,486/- and filed the return on 17.09.2019. The revenue denied the carry forward arguing a belated filing, while the appellee contended it was timely according to audit regulations.
Findings of Court:
The Tribunal concluded that due to audit rules applicable to the assessee, the return was filed within the permissible time frame, thus allowing the carry forward of business losses.
Issues: Main issue concerned whether the return was filed timely per Section 139(1) owing to audit obligations.
Ratio Decidendi: The court found that audit compliance under LLP rules dictated the filing timeline, permitting business loss carry forward.
Result: Appeal allowed.
| Table of Content |
|---|
| 1. facts regarding return filing and claimed losses (Para 1 , 2 , 3 , 4) |
| 2. arguments from both parties on return timeliness (Para 5) |
| 3. court's analysis of audit requirements related to llp (Para 6) |
| 4. final ruling on the appeal outcome (Para 7) |
ORDER
This appeal in ITA No. 56/Agr/2023 for the assessment year 2019-20 has arisen from the appellate order dated 08.02.2023(DIN& Order No. ITBA/NFAC/S/250/2022-23/1049561518(1)) passed by learned Commissioner of Income-tax(Appeals), NFAC, Delhi, which appeal in turn has arisen from the intimation/order dated 18.12.2019 passed by CPC, Bengaluru u/s. 143(1) of the Income-tax Act , 1961.
2. The grounds of appeal raised by assessee in Memo of appeal filed with Income Tax Appellate Tribunal, Agra Bench,Agra reads as under :
“1. Because the order passed by the Authorities below are Erroneous illegal, arbitrary and bad in law.
2. Because the Authorities below erred in treating the return of income filed by the assessee as belated return and accordingly erred in not allowing the carry forward of loss of Rs. 16,96,446/- to the subsequent year for setoff.
3. Because the Authorities below also erred in not allowing the claim of the appellant of carry forward of loss to succeeding years despite of established facts that the return of income filed by the appellant was well within time.
4. Because the Authorities below also erred in holding that the appellant was not required to get accounts audited under the Income Tax Act or under any other law for the time being in force, therefore, required to file the return latest by 31st July.
5. Because the Authorities below also erred in not applying the provisions of rule 24(8) of the Limited Liability Partnership Rules in Legal manner.
6. Because the Authorities below also erred in calculating the contribution as per self invented formula by taking Closing Stock less Opening Stock at Rs.5,35,080/- as against contribution of more than Rs.1 Crore as required under Rule 24(8) of the LLP Rules 2009.
7. Because the Authorities below also erred in holding that the appellant has not uploaded any Audit Report for the concerned assessment year, therefore, the finding of the Learned Commissioner of Appeals is perverse.
8. The appellant craves leave to add, alter or delete any grounds of appeal.”
3. Brief facts of the case are that the assessee filed its return of income declaring business loss of Rs.16,96,486/- , on 17.09.2019. The return of income was processed by the CPC u/s. 143(1) of the Act, wherein business loss of Rs.16,96,486/- claimed by the assessee was denied to the assessee to be carried forward to the subsequent years, and income was assessed at Rs. Nil on the grounds that the assessee has filed return of income belatedly beyond the due date as prescribed u/s 139(1). The extended due date u/s 139(1) being 31.08.2019 , while return of income was filed by the assessee on 17.09.2019. Consequently, carry forward of the current year business losses to the tune of Rs. 16,96,486/- was denied to the assessee, as the return of income as per CPC was filed after the due date as prescribed u/s 139(1), being incorrect claim u/s. 143(1)(a)(ii).
4. Being Aggrieved, the assessee filed first appeal before ld. CIT(Appeals).The assessee claimed before ld. CIT(A) that the assessee’s books of accounts are required to be audited under the provisions of Rule 24 of Limited Liability Partnership Firm Rules, 2009. The assessee claimed that its accounts were audited by a Chartered Accountant vide Audit Report dated 03.09.2019. The assessee claimed that since its accounts were audited , the due date of filing of return of income was 31.10.2019. Thus, the return of income filed on 17.09.2019 was filed within the due date u/s 139(1), and CPC has erred in not allowing carry forward of business loss of Rs. 16,96,446/- by treating the return of income as a belated return. The ld. CIT(A) referred to the Explanation 2 to Section 139(1) , and observed that the due date for fili
