Court sets aside Income Tax Act notice & order on carrying forward losses. Petitioner prevails.

The Court set aside the notice issued under section 148 of the Income Tax Act, 1961 and the order disposing objections regarding carrying forward unabsorbed business losses and depreciation for setoff in Assessment Year 2011-12. The Court accepted the petitioner's arguments that there was no restriction on setting off unabsorbed depreciation in the said year and that all material facts were disclosed for assessment. The Court found in favor of the petitioner, noting the failure of the revenue to file a counter-affidavit and concluded that the notice and order should be set aside, disposing of the writ petition accordingly.

---

---

Issues involved: Challenge to notice u/s 148 of Income Tax Act, 1961 and order disposing objections regarding carrying forward unabsorbed business losses and depreciation for setoff in AY 2011-12.

Summary:
1. The writ petition challenged a notice u/s 148 of the Income Tax Act, 1961 and an order disposing objections related to carrying forward unabsorbed business losses and depreciation for setoff in AY 2011-12.

2. The reassessment proceeding was initiated against the petitioner for carrying forward unabsorbed business losses and depreciation for setoff in AY 2011-12.

3. The Assessing Officer (AO) restricted the infraction related to unabsorbed depreciation in the impugned order dated 20.11.2018.

4. The petitioner set off unabsorbed depreciation amounting to Rs. 7,63,79,560/- accumulated between AY 1998-99 and 2001-02 against income in AY 2011-12.

5. The AO believed that the unabsorbed depreciation should not have been set off in AY 2011-12 as it exceeded the prescribed period for carrying forward unabsorbed depreciation.

6. Counsel for the petitioner argued that there was no restriction on setting off unabsorbed depreciation in AY 2011-12 and that all material facts were disclosed for assessment.

7. The petitioner's actions of carrying forward and setting off unabsorbed depreciation were supported by a judgment of the Coordinate Bench of the Court.

8. The Court noted the failure of the revenue to file a counter-affidavit despite the notice issued in 2018 and declined to grant further time.

9. After hearing both parties, the Court accepted the submissions made by the petitioner's counsel.

10. The reasons furnished by the AO for triggering the reassessment proceeding did not mention any failure to disclose material facts necessary for assessment.

11. The Court concluded that the impugned notice and order should be set aside, and the writ petition was disposed of accordingly.

---