Revised ITR can’t be filed to convert original return into loss return in absence of any mistake: SC

Case Details: PCIT v. Wipro Ltd. - [2022] 140 taxmann.com 223 (SC)

Judiciary and Counsel Details

• • M.R. Shah & B.V. Nagarathna, JJ.

Facts of the Case

Assessee-Wipro Ltd. was a 100% export-oriented unit and engaged in the business of running a call centre and IT Enabled and Remote Processing Services. It filed return of income declaring loss and claimed exemption under section 10B.

Assessee stated that no loss was being carried forward as the assessee was 100% export-oriented unit and entitled to claim an exemption under Section 10B. However, later assessee filed a revised return of income demanding carry forward of losses by not claiming exemption under section 10B.

The Assessing Officer (AO) rejected the claim of carrying forward of loss as the revised return of income can be filed under Section 139(5) only to remove the omission and mistake and/or correct the arithmetical error. It cannot be filed for altogether a new claim.

The matter reached High Court wherein the court allowed relief to the assessee. Aggrieved-AO filed the instant appeal before the Supreme Court of India.

Supreme Court Held

The Supreme Court of India held that the assessee filed its original return under section 139(1) and not under section 139(3), i.e., return of loss. Thus, AO was right in submitting that the revised return filed under section 139(5) can only substitute its original return under Section 139(1) and cannot transform it into a return under Section 139(3).

The assessee can file a revised return in a case where there is an omission or a wrong statement. But a revised return of income, under Section 139(5) cannot be filed, to withdraw the claim and subsequently claim the carried forward or setoff of any loss.

Filing a revised return under Section 139(5) and taking a contrary stand and/or claiming the exemption, which was specifically not claimed earlier while filing the original return of income is not permissible.

Accordingly, the order passed by the High Court taking a contrary view was to be set aside and the claim of the assessee to be denied.