16 June, 2023

Carry Forward of Losses: Bombay High Court's Landmark Decision on Filing Returns Beyond Due Date

 

You are all well aware that if a return is filed beyond the due date, any loss suffered by the assessee cannot be carried forward for set off in the following         years. It is important to understand that the responsibility of filing the ITR lies with the taxpayer and not with a Chartered Accountant.

Consider a scenario where an assessee files their ITR after the due date, citing that their Chartered Accountant was preoccupied with their sister's wedding. Will the loss in such a case is allowed to be carried forward though filed belatedly? Read the interesting judgment by the Bombay High Court.

The Bombay High Court recently has condoned a delay in filing a loss return by a company M/s ADCC Infocom Private Limited. The company had suffered a loss during the financial year 2019-2020 and was required to file its return within the specified due date. However, the return was filed 36 days after the due date.

However, in this case, the Bombay High Court accepted the petitioner's argument of genuine hardship and condoned the delay in filing the return.

The company cited the COVID-19 pandemic and the heavy workload of its Chartered Accountant as reasons for the delay. Additionally, the Chartered Accountant's sister's wedding, which took place on February 16, 2021, further contributed to the delay as she was occupied with the arrangements and attending to relatives.

 

So the company's loss can still be carried forward and set off against future income.

It’s an Important judgment to keep in our memory.

 

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