2009 (12) TMI 673

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....y the assessee are as under:- "1.The notice issued by the Ld. Commissioner of Income-tax, Delhi-IV ('CIT') under section 263 and the subsequent order passed under said section are illegal, bad in law and without jurisdiction and as such the order passed under section 263 is liable to be quashed. 2.The ld. CIT, while passing the impugned order, has failed to appreciate that the assessee was prevented from filing its return of income on the due date on account of reasons beyond its control and as the delay of one day is not on part of the appellant. 3.The ld. CIT has failed to acknowledge that provisions of section 80 are merely directory in nature and the intent of the Act is not penalize the assessee on account of delay because of ....

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....tion to the Central Board of Direct Taxes (CBDT) under section 119 of the Act for condonation of delay in filing the return of income of the subject assessment year and allow carry forward and set off its losses for the subject assessment year (acknowledged copy of application enclosed as Annexure 2). Accordingly, we request your goodself to kindly keep the proceedings under section 263 of the Act in abeyance till the disposal of application by CBDT." 4. After considering the assessee's submission and the facts and circumstances of the case, the ld. CIT pass the order under section 263 of the Act by observing and holding as under:- "3.The assessee's contention is not acceptable in view of the fact that filing of return by the due date....

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.... that the loss determined by the Assessing Officer should be allowed to be carried forward for set off in the subsequent assessment years. 7. The ld. D.R. supported the ld. CIT's order and submitted that in the light of the decision of Hon'ble Punjab and Haryana High Court in the case of CIT v. Haryana Hotels Ltd. [2005] 276 ITR 521, the loss determined in the assessment year under consideration cannot be carried forward and set off in the light of the fact that the assessee has not submitted the return within due date specified under section 139(1), read with section 139(3) of the Act as so provided under section 80 of the Act. 8. We have heard both the parties and have carefully perused the material on record. 9. In the course of....

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....orward under sections 72(1), 73(2), 74(1), 74(3), 74A(3), a return of loss can be filed in the prescribed manner and containing such other particulars as may be prescribed, and that all the provisions of the Act shall apply as if it were a return under sub-section (1) of section 139 of the Act. Section 80 starts with the expression "notwithstanding anything contained in this Chapter" meaning thereby that section 80 shall apply notwithstanding anything contained in Chapter VI, i.e., aggregation of income and set off or carry forward of loss. Section 72 of the Act deals with carry forward and set-off of business loss, not being a loss sustained in speculation business, and it provides that where net result of the computation under the head "P....

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....clared that the loss computed in that year could not be carried forward to the next year under section 24(2) of the Income-tax Act, as it was not a business loss. The amount of loss as computed by him, if it is established in the course of assessment of the total income that the assessee has suffered loss of profits. Section 24(2) confers a statutory right (subject to certain conditions which are not material) upon the assessee who sustains a loss of profits in any year in any business, profession or vocation to carry forward the loss as is not set off under sub-section (1) to the following year, and to set it off against his profits and gains, if any, from the same business, profession or vocation for that year. Whether the loss of profits....