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The assessee was engaged in the business of Manufacturing Engineering goods. It filed its return of income declaring loss. The return was duly filed within the prescribed time under section 139(1).
However, the financial statements were not audited by the time of filing of return of income. The assessee's accounts were audited later after 3 months and filed with Assessing Officer (AO). The assessee did not file a revised return of income after getting its accounts audited with a revised figure of income (loss) post-audit.
AO completed the assessment by not allowing carried forward of business loss as no revised return was filed by the assessee. On appeal, the CIT(A) allowed relief to the assessee. Aggrieved-AO filed the instant appeal before the Tribunal.
The Tribunal held that if the assessee has not got its statutory audit done under the Companies Act within the prescribed time, or has not got its tax audit done under Income-tax Act, there are penal provisions provided under the statute for such non-compliance.
There could be several reasons for not getting the statutory audit/tax-audit done within the prescribed time, but unless there is a specific/express provision that stipulates that if the audit is not done within the prescribed time, the loss shall not be allowed to be carried forward, the scope of the statute cannot be expanded.
Section 80 of the Income-tax Act stipulates that the return of income is to be filed within the prescribed time, to which the assessee did comply within the given case. Thus, there was no justification for denying the carry forward of the business loss based on the fact that accounts were not audited by the time of filing of return of income under section 139(1).
The assessee was a retired professional cricketer who received ex-gratia payment as a one-time benefit from BCCI. He claimed such amount as capital receipt not liable to be taxed.
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During the assessment, AO held that said sum would be taxable under section 56(2)(vii) on the ground that BCCI did not have registration under section 12AA. Accordingly, he made additions to the income of the assessee. On appeal, the Commissioner (Appeal) upheld said addition and further held that said sum was liable to be taxed under section 28(iv). Aggrieved-assessee filed the instant appeal before the Tribunal.
The Tribunal held that the assessee was paid ex-gratia amount for having played cricket for the country. Since the assessee was a retired cricketer and not rendering any services to BCCI, section 28(iv) would not be applicable.
Further, the sole reason for bringing to tax such a sum was that BCCI was not having registration under section 12AA. However, the assessee contended that registration of BCCI under section 12AA was restored by the Mumbai Bench of Tribunal for the relevant assessment year.
Therefore, in the interest of justice and equity, the case needs to be considered afresh by the AO. Accordingly, AO was directed to examine whether BCCI was having registration under section 12AA for the relevant assessment year and if the satisfied said amount would not be taxable under section 56(2)(vii).
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