August 2019

Section 72 r.w.s. 254, Section 154 Business loss determined and carried forward by the AO pursuant to an order passed in accordance with directions of the Tribunal u/s 143(3) r.w.s. 254 can be set off in subsequent years though such claim is not made in the return of income. The AO is duty-bound to give relief to the assessee which has resulted pursuant to the order passed by the appellate authority and which has a cascading effect on the subsequent assessment years

JAGDISH T. PUNJABI | DEVENDRA JAIN | TEJASWINI GHAG
Chartered Accountants

26.  [2019] 107 taxmann.com 92 (Pune)

Maharashtra State Warehousing Corporation vs. DCIT

ITA Nos.: 2366 to 2399/Pune/2017

A.Y.s: 2003-04 to 2006-07

Date of order: 3rd June, 2019

 

Section 72 r.w.s. 254, Section 154 Business loss determined and carried forward by the AO pursuant to an order passed in accordance with directions of the Tribunal u/s 143(3) r.w.s. 254 can be set off in subsequent years though such claim is not made in the return of income. The AO is duty-bound to give relief to the assessee which has resulted pursuant to the order passed by the appellate authority and which has a cascading effect on the subsequent assessment years

 

FACTS

The assessee, a State Government Undertaking, was engaged in providing warehouse facilities in the State of Maharashtra. For A.Y. 2002-03, while assessing the total income of the assessee, the AO made certain additions to the returned income. The assessee contested the additions in an appeal before the CIT(A) as well as before the Tribunal. The Tribunal restored the matter back to the AO with certain directions.

The AO passed an order u/s 143(3) r.w.s. 254 and allowed the final net business loss to be carried forward.

 

Subsequently, the CIT invoked section 263 of the Act and held the order passed by the AO u/s 143(3) r.w.s. 254 to be erroneous and prejudicial to the interest of the Revenue.

 

The assessee challenged the action of the CIT before the Tribunal. The Tribunal quashed the order passed by the CIT u/s 263. As a result, the order passed by the AO based on the directions of the Tribunal stood restored.

 

Thereafter, the assessee, in order to claim the set-off of brought-forward business loss of A.Y. 2002-03, filed an application for rectification of assessment orders for A.Y. 2003-04 to A.Y. 2006-07. The AO rejected this application.

 

Aggrieved, the assessee preferred an appeal to the CIT(A) who dismissed the appeals of the assessee on the ground that since the set-off was not claimed in the return of

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