2024 (1) TMI 162 - HC - Income Tax

Court Allows Late Appeal Re-Filing; Respondent Agrees Not to Carry Forward Loss, Appeal Disposed Based on Assurance.

The Commissioner Of Income Tax – International Taxation -3 Versus Saif Partner India IV Ltd

The HC condoned a 130-day delay in re-filing the appeal concerning the Assessment Year 2017-18. The appeal challenged the ITAT's decision, which set aside ... Revision u/s 263 - CIT(A)’s view that the loss claimed by assessee upon transfer of shares concerning Indian entities was both erroneous and prejudicial to the interest of revenue - HELD THAT:- The record shows that in the notes of accounts appended to the balance sheet as on 31.03.2017, the respondent/assessee had clearly indicated that it was not carrying forward the cumulative loss. It is not in dispute that the assessee has not carried forward the aforementioned loss registered upon transfer of the shares of the Indian entities. Respondent says that he has instruction to convey to the court that the said loss will not be carried forward. It is, therefore, in these circumstances, no prejudice can be caused to the revenue. Concededly, for invoking powers under Section 263 of the Act, twin conditions have to be satisfied i.e., the order of the AO should be erroneous and prejudicial to the interest of the revenue. The other condition is not fulfilled. Therefore, the appeal is disposed of, based on the statement made by Respondent which shall bind the respondent/assessee. Issues involved:Delay in re-filing the appeal, Assessment Year 2017-18, Order passed by the Income Tax Appellate Tribunal, Setting aside of the order by Commissioner Income Tax (Appeals), Claimed loss upon transfer of shares, Invocation of powers under Section 263 of the Income Tax Act.Delay in re-filing the appeal:An application was filed seeking condonation of delay of 130 days in re-filing the appeal, which was not objected by the respondent/assessee. The delay was condoned and the application was disposed of accordingly.Assessment Year 2017-18:The appeal pertained to Assessment Year 2017-18, where the appellant/revenue sought to challenge the order passed by the Income Tax Appellate Tribunal which set aside the order of the Commissioner Income Tax (Appeals) under Section 263 of the Income Tax Act, 1961. The Tribunal's decision was based on the view that the loss claimed by the respondent/assessee upon transfer of shares was erroneous and prejudicial to the interest of revenue.Claimed loss upon transfer of shares:The respondent/assessee had indicated in the notes of accounts a cumulative loss of Rs. 62,85,40,289/- upon transfer of shares of Indian entities, which was not carried forward. The details of the loss were provided in the order, showing the net loss incurred. The counsel for the respondent conveyed that the said loss will not be carried forward, ensuring no prejudice to the revenue.Invocation of powers under Section 263 of the Income Tax Act:For invoking powers under Section 263 of the Act, it is required that the order of the Assessing Officer should be both erroneous and prejudicial to the interest of revenue. As per the statement made by the counsel for the respondent, it was established that no prejudice would be caused to the revenue, thus fulfilling one of the conditions. Consequently, the appeal was disposed of based on the statement made by the counsel, binding the respondent/assessee.