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2025 Supreme(Online)(ITAT) 6449
INCOME TAX APPELLATE TRIBUNAL (HYDERABAD BENCH)
G. Manjunatha, A.M, Ravish Sood, J.M
Ponapula Sanjeeva Parthasarathy – Appellant
Versus
Commissioner of Income Tax (Appeals) – 11, Hyderabad – Respondent
I.T.A.Nos.294 and 295/Hyd/2021
For the Appellant: Shri P. Murali Mohan Rao, C.A.
For the Respondent: Dr. Sachin Kumar
Timeliness in tax return filings is crucial for the recognition of loss carry-forwards under income tax laws.
Headnote:(A) Income Tax Act, 1961 - Sections 139, 153A, and 80 - Assessee filed belated return for A.Y. 2016-17, subsequent return under 153A rejected carry-forward of losses due to late filing - Court affirmed A.O.’s decision on loss carry-forward as per Section 80 prohibitions - The issue of loss carry-forward has been settled by the Supreme Court. (Paras 8, 11, 12, and 17)
(B) Appeal - Appellate Authority’s duty to assess merits of claims based on statutory criteria and precedents while highlighting the necessity of timely filings to secure tax benefits. (Paras 11, 12)
Facts of the case:
The assessee filed a belated return for A.Y. 2016-17 declaring income and losses, but was denied the carry-forward of capital losses due to non-compliance with timeliness as required by the Income Tax Act.
Findings of Court:
The Tribunal found no error in the A.O.’s treatment of the case and upheld the CIT(A)’s rejection of carry-forward claims based on statutory provisions.
Issues: The main issues were the timing of filing returns and the applicability of provisions concerning loss carry-forward under Sections 139 and 80.
Ratio Decidendi: The Tribunal ruled that the original belated return disallowed the subsequent claims of carry-forward losses, reaffirming that timeliness under tax law is crucial for deduction claims.
Result: Appeals dismissed.
| Table of Content |
|---|
| 1. filing appeals due to adverse a.o. decisions and common issues identified. (Para 1 , 2 , 3) |
| 2. procedural and factual context established for loss carry-forward claims. (Para 4 , 5 , 6 , 7) |
| 3. appellant's arguments regarding appropriateness of claims and loss carry-forwards. (Para 8 , 9 , 10) |
| 4. court's examination of case laws relevant to the core issue. (Para 11 , 12 , 13) |
| 5. final ruling on the appeals and the implications of timely returns. (Para 15 , 16 , 17) |
ORDER
PER MANJUNATHA G., A.M :
The captioned appeals are filed by a single assessee viz., ‘Ponapula Sanjeeva Parthasarathy” against the separate orders of learned Commissioner of Income Tax (Appeals) – 11, Hyderabad dated, 30.03.2021 relating to the assessment years 2016-17 and 2017-18, respectively. Since common issues are involved in both the appeals, the same were heard together and are being disposed of by this single consolidated order for the sake of convenience and brevity.
2. First, we take up assessee’s appeal for A.Y. 2016-17 in ITA No.294/Hyd/2021. The grounds raised by the assessee read as under :
“1. On the facts and in the circumstances of the case the appellate order passed by the CIT(A) is erroneous both on facts and in law to the extent the order is prejudicial to the interest of the appellant.
2. The Ld.CIT(A) ought to have appreciated the fact that the Ld.AO has erred in not restricting himself to the income originally assessed/returned as there is no incriminating material found during the course of search relating to this AY.
3.The Ld.CIT(A) ought to have appreciated the fact that in a search assessment, no addition can be made to the concluded assessments without there being any incriminating material found during the course of search proceedings.
4. On the facts and in the circumstances of the case, the Ld.CIT(A) ought to have appreciated the fact that the Ld. AO has erred in passing the order u/s 153A of the Act without obtaining the prior approval of the competent authority JCIT/ Additional commissioner of income tax u/s 153D of the Act.
5. The Ld.CIT(A) ought to have appreciate the fact that the Ld.AO erred in not allowing the short term capital loss of Rs. 3,47,754 relating to the AY 2016-17 to carry forward.
6. The Ld.CIT(A) ought to have appreciated the fact that the Ld.AO erred in not allowing the carry forward of short term capital losses in the AY 2016 -17 and adjustment of carry forward loss in the AY 2017-18, without making Fa any specific disallowance of loss claimed while passing order u/s 153A r.w.s. 143(3) of the Act for the AY 2016-17.
7. The Ld.CIT(A) ought to have appreciated the fact that return filed under Section 153A during the AY 2016-17 takes the place of the original return under Section 139 , for the purposes of all other provisions of the Act and accordingly, the loss relating to AY 2016-17 can be carried forward and adjusted against capital gain in subsequent years.
8. The Ld.CIT(A) ought to have appreciated the fact that, once return u/s 153A(1)(a) of the Act is accepted and assessed, replaces the original return and that the return filed u/s 153A(1)(a) is deemed to be return u/s 139 and the restrictive provision of section 80 does not apply to 153A return and accordingly, the capital loss ought to be carried forward to the subsequent years.
9. The Ld.CIT(A) erred in not appreciating fact that the assessment under section 153A r.w.s. 143(3) of the Act for the AY 2016-17 and AY 2017-18 have been framed on the basis of return filed in response to notice issued under section 153A and is accordingly within prescribed time.”
3. The brief facts of the case are that, the assessee, who is an individual filed original return of income under Section 139 (1) of the Income Tax Act, 1961 (for short “the Act”) for the assessment year 2016-17 on 28.10.2016, declaring total income of Rs. 47,80,270/-. A search and seizure action under Section 132 of the was conducted in the case of M/s. Goldstone Infratech Ltd. and other assoc
