Tribunal Upholds CIT(A) Decision on Carrying Forward Deficit to Trust

The Tribunal upheld the decision of the CIT(A) to allow the deficit to be carried forward to the assessee's trust. The legal basis for this decision was the relevant court judgments supporting the allowance of such claims. The Tribunal found no fault in the CIT(A)'s order and dismissed the appeal filed by the department.

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Issues:
Allowance of carry forward of deficit to the assessee's trust.

Analysis:
The appeal was filed by the Dy. Commissioner of Income Tax (Exemption) 2(1), Mumbai against the order passed by the Commissioner of Income Tax (Appeals)-1, Mumbai. The only issue raised was the allowance of carry forward of deficit to the assessee's trust. The assessee, a trust registered under section 12A of the Income-Tax Act, filed its return of income with a total income of Rs. 3,93,86,346/-. The assessment order disallowed the deficit carry forward from earlier years and the current year's deficit. The Assessing Officer rejected the claim citing that provision 11 of the Act does not permit such determination. The CIT(A) allowed the claim following relevant court decisions. The learned DR supported the Assessing Officer's order, but despite notice, no one appeared on behalf of the assessee.

The CIT(A) allowed the deficit to be carried forward based on decisions of the Jurisdictional High Court and the Supreme Court. The CIT(A) noted that the Hon'ble Supreme Court had allowed similar claims in a related case. The order of the CIT(A) was upheld as no infirmity was found in it. The Finance Act, 2021 introduced an explanation regarding the calculation of income without set off or deduction, but it did not apply to the impugned assessment year. The order of the CIT(A) was upheld, and the appeal filed by the department was dismissed.

In conclusion, the Tribunal upheld the decision of the CIT(A) to allow the deficit to be carried forward to the assessee's trust. The legal basis for this decision was the relevant court judgments supporting the allowance of such claims. The Tribunal found no fault in the CIT(A)'s order and dismissed the appeal filed by the department.

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