High Court upholds CIT(A)'s decision on unabsorbed depreciation claim, clarifies Form No.62 filing as directory

The High Court dismissed the Revenue's appeal against the CIT(A)'s decision to allow the claim for unabsorbed depreciation of an amalgamating company without initially filing Form No.62 along with the return of income. The Court upheld the CIT(A)'s ruling, emphasizing that the filing of Form No.62 was not mandatory but directory. The Court noted that the CIT(A) correctly considered the form filed during reassessment proceedings and allowed the claim, highlighting the importance of procedural compliance and the discretion of authorities in tax matters.

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Issues:
Appeal against order of CIT(A) regarding allowance of unabsorbed depreciation of amalgamating company without filing Form No.62 along with return of income.

Analysis:
1. The appeal was filed by the Revenue against the order of the ld. CIT(A) regarding the allowance of unabsorbed depreciation of an amalgamating company without filing the prescribed Form No.62 along with the return of income.
2. The assessee, a manufacturing company, filed its return of income for the relevant year on 20.10.2005, declaring total income. The AO computed the total income and allowed the claim for set-off of unabsorbed loss and depreciation of the amalgamating company, even though Form No.62 was not filed initially.
3. The CIT set aside the original assessment, directing the AO to reframe it after giving the assessee an opportunity. During this process, the assessee filed Form No.62, but the AO overlooked it and disallowed the claim in the fresh assessment.
4. The CIT(A) deleted the disallowance made by the AO, stating that the conditions under section 72A were complied with and Form No.62 was filed during reassessment proceedings, which the AO ignored.
5. The Revenue contended that Form No.62 should have been filed along with the return of income, and the CIT(A) erred in allowing the claim based on a belated filing.
6. The assessee argued that the original assessment was set aside, providing the opportunity to file Form No.62 during reassessment, which was duly done. The CIT(A) rightly considered the form and allowed the claim.
7. The Tribunal found that the initial assessment allowed the claim without Form No.62, and the CIT(A) decision was in line with a High Court ruling stating that filing the form is directory, not mandatory. Therefore, the appeal by the Revenue was dismissed.

This judgment highlights the importance of procedural compliance in tax matters, the significance of filing necessary forms, and the discretion of authorities in allowing claims based on the specific circumstances of each case.

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