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TMI Blog2022 (12) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income for AY 2017-18 in Form ITR- 3 on 29.10.2017 and was within due date by virtue of Para 2 above. The Assessee then filed a Revised Return on 29.03.2018, as he found that some claims on Donation 80G had got omitted. The Assessee received Intimation under Section 143(1)(a) dated June 2, 2018 accepting the Revised Return filed on 29.03.2018. In this Intimation also there is a mention that the due date of filing of the Return by the Assessee is 07/11/2017. 4. On November 7, 2018, the Assessee realised that he had forgotten to claim the Long Term Capital Loss and hence filed a Second Revised Return making the claim and to carry forward the Long Term Capital Loss of Rs.892,835. In this revised return also, the assessee indicated that he is a partner in a firm which is subjected to tax audit. Against the Second Revised return, the Assessee received notice on 19.01.2019 for Adjustments to income towards mismatch of P&L account and income schedules as well as disallowance of carry forward loss, because the Assessing officer believed that the due date of filing of original return is 31.08.2017 and not 07.11.2017 5. A further third revised return was filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section (1) of section 142, such return shall be processed in the following manner, namely:- (a) the total income or loss shall be computed after making the following adjustments, namely:- (i) any arithmetical error in the return; (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139; (iv) disallowance of expenditure 68[or increase in income] indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed under 69[section 10AA or under any of the provisions of Chapter VI-A under the heading "C.-Deductions in respect of certain incomes", if] the return is furnished beyond the due date specified under subsection (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return:" 12. It could be seen from clause (iii) of section 143(1)(a) that loss claimed can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the loss must be filed within the time limit prescribed under section 139(3) read with section 139(1) and; (2) the said loss must have been determined. 10. In the present case, the Assessing Officer has serious reservation for allowing the assessee to carry forward long-term capital loss by interpreting the provisions of section 80 read with section 139(3). In this background, can it be said that the assessee has not fulfilled conditions laid down in section 80 and hence, it is not permissible to allow to carry forward of the capital loss. In the present case, the assessee filed original return under section 139(1) in which the positive income was declared. Even as per the assessment order positive income is determined as the assessee could not set off the loss on the sale of the shares of Phiolx Pharma Ltd. in the year itself. He claimed the same to be carry forward. In our humble opinion correct interpretation of section 80, as per the language used by the Legislature, condition for filing revised return of loss under section 139(3) is confined to the cases where there is only a loss in the original return filed by the assessee and no positive income and assessee desires to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to carry forward of 'long-term capital loss'. Sub-sections (1) and (3) of section 139 provides for the different situations and in our opinion, there is no conflict in applicability of both the provisions as both the provisions are applicable in the different situations. We are, therefore, of the opinion that there is no justification to deny the assessee to carry forward the loss. We, accordingly, direct the Assessing Officer to allow the assessee to carry forward the loss." 14. The law laid down above is that Section 80 is a cap on the right of the assessee, when the assessee claims that he has no taxable income but only a loss but does not file the return of income declaring the said loss as provided in sub-section (3) of section 139. Under section 139(1), if the assessee has a taxable income chargeable to tax then it is a statutory obligation to file the return of income within the time allowed under section 139(1). So far as section 139(3) is concerned, it only provides for filing the return of loss if the assessee desires that the same should be carried forward and set off in future. As per the language used in subsection (3) to section 139, it is contemplated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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