Is carry forward of losses allowable under the Income Tax Act?

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘G’ BENCH, NEW
DELHI [THROUGH VIDEO CONFERENCE]

BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND
SHRI KULDIP SINGH, JUDICIAL MEMBER

ITA No. 4579/DEL/2017 [A.Y 2014-15]

The A.C.I.T.[E] 
Circle - 2(1)
New Delhi
[Appellant] 

Vs. 

The British School Society
San Martin Marg, Chanakyapuri
 New Delhi
PAN: AAATT 0271 C
[Respondent]

Assessee by : Shri Himanshu Agarwal, Adv
 Shri Gaurav Jain, Adv
 Shri Deepesh Jain, Adv
Revenue by : ShriH.K. Choudhary , CIT-DR

Date of Hearing : 21.06.2021
Date of Pronouncement : 21.06.2021

ORDER

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,

 This appeal by the Revenue is preferred against the order of the CIT[A] - 40, Delhi dated 29.05.2017 pertaining to A.Y 2014–15. 

2. The grievances of the Revenue read as under:

1. On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in law in allowing the claim of carry forward of losses disregarding the fact that set off and carry forward of losses are dealt with by the provisions of section 70 to 74 of the Income Tax Act, 1961.

2. On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in law in allowing the assessee’s claim of carry forward of current year loss and set-off of excess deficit pertaining to earlier years without appreciating the fact that u/s 11, 12 and 13 of the Act there is no provision for computing loss from property held under trust/institution on account of excess application of income/funds of the trust.

3. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in allowing the assessee’s claim of carry forward of current year loss and set off of excess deficit pertaining to earlier years without appreciating the fact that the normal computation of income under respective heads as envisaged u/s 15 to 59 are not applicable to the computation of income in respect of charitable trust/institution for the purpose of claiming exemption under section 11,12 and 13 and therefore the provisions relating to set off of loss from one source against the income from another source, set off of loss from one head against another income derived from another head and carry forward and set off of loss against the income of subsequent years as envisaged u/s 70 to 79 of the Act are also not applicable to the charitable trusts/institutions.

4. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing.” 

3. Briefly stated, the facts of the case are that the assessee society is registered u/s 12A of the Income tax Act, 1961 [hereinafter referred to as 'the Act' for short] and is also notified u/s 80G(5)(vi) of the Act. The assessee society is also notified u/s 10(23C)(vi) of the Act. The objects of the assessee society are as under:

1. To provide instruction according to British standards and practice for British children in India and at the discretion of the Board of Governors for the children of other Commonwealth and foreign countries in India.

2. To receive and accept donations, endowments and gifts of money, land, buildings, stocks funds, shares, securities and any other property whatsoever whether subject to any special trusts or conditions or not.

3. To invest money of the Society not immediately required, in such manner and upon such securities as may be determined by the Board of Governors from time to time. 

To know more in details find the attachment file