Return Filed by a Govt Undertaking on the basis of Provisional Information must be accepted since the Audit of Account was not within Hands of Assessee: ITAT [Read Order]

The Income Tax Appellate Tribunal ( ITAT ) allowed the appeal of the assessee and held that Return filed by a Govt Undertaking on the basis of Provisional Information must be accepted since the audit of the account was not within the hands of the assessee.

In instant case, Assessee carried the issue of action of the Assessing Officer denying carry forward of losses of the assessee without any valid and cogent reason. Here Assessee engaged in the business of trading and distribution of fertilizer, paddy, rice and also derives income from rent.

The assessee was asked to produce the final accounts on the basis of which the loss could be assessed thereafter; Assessee submitted that since the statutory audit is not done it would not possible to submit the same. Accordingly, in the absence of final accounts, AO denied the claim off assessee to allow carry forward losses. On appeal, the CIT (A) confirmed the action of the Assessing Officer.

The tribunal bench comprising Judicial Member Pavan Kumar Gadale and Accountant Member N.S Saini found that the audit of account of the assessee was not within the hands of the assessee, which is a Government Undertaking.

The tribunal bench also endorsed the decision of this Bench of the Tribunal in the case of assessee and also in the case of OMC vs ACIT wherein, it has been held that carry forward of losses which are not accompanied with audited accounts of assessee, A Orissa government undertaking and its accounts are audited by the auditors appointed by the CAG which is not within the control of the assessee—Assessee filing return under Section 139(1) of the Income Tax Act.

By following the aforesaid order bench directed the AO to allow the claim of Assessee.