Mr. Prakash Chand Agrawal vs Income Tax Officer

PER YOGESH KUMAR, U.S. JM:

The captioned appeals are filed by the Assessee against the orders of Ld. Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 18/01/2025 and for the Assessment Year 2018-19 and 2019-20 respectively.

The grievance of the Assessee is that the CPC on allowing the rectification application accepted the correctness of the claim and allowed and the said set off of brought forward loss vide Rectification order dated 10/07/2020, however, while processing the Revised Return filed by the Assessee, CPC again disallowed the same.

Brief facts of the case are that, in the present case, the Assessee filed return of income on 25/09/2019, declaring total income of Rs. 15,71,910/-, which was within the prescribed due date applicable to partners of firm whose accounts are required to be audited. While filing the return of income, due to Assessee’s unintentional mistake the Schedule IF containing details of partnership firm in which the Assessee was partner in remained unfiled. The Return of Income was processed by CPC and an intimation u/s 143(1) was came to be passed on 02/06/2020, wherein brought forward Long Term capital loss of Rs. 6,76,307/- claimed by the Assessee was disallowed. Further fee of Rs. 5000/-u/s 234F was levied by treating the return as belated.

Thereafter, the Assessee filed rectification application u/s 154 of the Act and vide order dated 10/07/2020 the CPC allowed the set of brought forward Long Term Capital Loss of Rs. 6,76,307/-. However, the fees u/s 234F of Rs. 5000/- was not deleted. The Assessee filed revised return of income on 16/07/2020, wherein declared the details of partnership firm, however, while processing the revised return CPC vide intimation dated 27/08/2020, once again disallowed the brought forward loss of Rs. 6,76,307/-, though the fees u/s 234F was deleted. Thereafter, the Assessee filed one more application for rectification which has been rejected by the A.O. on 17/11/2023 holding that brought forward loss was not reflected in the return of income for Assessment Year 2018-19, therefore, the same could not be allowed to set off of in Assessment Year 2019-20. The said order came to be challenged by the Assessee before the Ld. CIT(A) and the Ld. CIT(A) vide order dated 18/01/2025, dismissed the Appeal of the Assessee which has been challenged by the Assessee in the above appeal.

We have heard both the parties and perused the material available on record. The Assessee claimed the set off of brought forward Long-Term Capital Loss in the Return of Income for the year under consideration, which was originally processed u/s 143(1) of the Act. Subsequently, upon filing of rectification application u/s 154 of the Act, the CPC itself accepted the correctness of the claim and allowed the set off of brought forward loss vide rectification order dated 10/07/2020. On the contrary while processing the revised return filed by the Assessee CPC again disallowed the same. The said approach of the CPC is not only erroneous computation of income but also an and inconsistent approach Accordingly, we delete the disallowance made by the CPC, which has been confirmed by the Ld. CIT(A).

In the result, Appeal of the Assessee in ITA No. 1300/Del/2025 is allowed.

The grievance of the Assessee in the present Appeal is against levy of Rs. 5000/- on delay in filing the return of income.

Brief facts of the case are that, the Assessee being a partnership firm, filed return of income u/s 139(1) of the Income Tax Act, 1961 ('Act' for short). However, without verifying the fact that the Assessee is a partnership firm. An intimation u/s 143(1) has been issued by imposing penalty of Rs. 5000/-.

We have verified the Return of Income filed by the Assessee which proves that the Assessee was a partner of aforesaid partnership firm for the relevant Assessment Year and the Assessee has filed return of income within the prescribed date and there is no delay in filing the return. Thus, we find merits in the Grounds of Appeal of the Assessee, therefore, we hereby delete the penalty imposed by the A.O. which has been upheld by the Ld. CIT(A).

In the result, Appeal in ITA No. 1299/Del/2025 is allowed.