ACIT Vs Kiri Industries Ltd. (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT) Ahmedabad dismissed the Revenue’s appeal in the case of ACIT vs. Kiri Industries Ltd. for the Assessment Year 2016-17, affirming the Commissioner of Income Tax (Appeals) [CIT(A)]’s decision to allow the carry-forward of losses amounting to ₹65.39 crore. The dispute arose when the Centralized Processing Center (CPC) disallowed the loss carry-forward on the basis that the return was filed beyond the due date. However, the ITAT held that the CPC’s computation was incorrect, as the company was entitled to an extended due date under Section 92E of the Income Tax Act due to international transactions.
Kiri Industries Ltd. had filed its return of income on November 30, 2016, reporting a total loss of ₹95.90 crore. The CPC, however, processed the return under Section 143(1) on August 13, 2017, disallowing ₹65.39 crore in losses on the assumption that the due date for filing was October 17, 2016. The company argued before the CIT(A) that this adjustment was beyond CPC’s jurisdiction, as per Section 143(1), which only permits adjustments for arithmetical errors or apparent incorrect claims. Furthermore, under Section 139(1), Explanation 2 (aa), entities engaged in international transactions must file their returns by November 30. Given that the company had complied with this deadline, the CPC’s action was unjustified.
