The Assessee-Wipro Ltd. was entirely focused on exports and ran a call centre as well as IT Enabled and Remote Processing Services. According to section 10B of the IT Act, it submitted a return of income declaring a loss and claiming exemption. The assessee claimed that no loss was being carried forward because it was a unit wholly focused on exports and qualified for an exemption under Section 10B. However, the assessee thereafter submitted a new return of income requesting the carry forward of losses by not claiming Section 10B exemption.
The revised income tax return can only be filed under Section 139(5) to correct the arithmetical error, omission, and/or mistake, hence the Assessing Officer (AO) denied the claim of carrying forward of the loss. It cannot be submitted for a completely different claim. When the case reached to the High Court, the judge gave the relief to the assessee. Aggrieved by the order passed by High Court AO filed an appeal before the Supreme Court of India.
By the Supreme Court
According to the Supreme Court of India, the assessee submitted his original return under section 139(1) rather than section 139(3), or "return of loss," as was the case. As a result, AO was correct to argue that the revised return filed under section 139(5) can only replace the initial return filed under section 139(1) and cannot change it into a return filed under section 139. (3).
In the event of an error or omission, the
assessee may submit a revised return. However, it is not possible to file a
revised return of income in accordance with Section 139(5) in order to withdraw
the claim and then later claim the carry forward or setoff of any loss. It is
not permitted to file a revised return under Section 139(5) and take a
different stance or claim an exemption that was expressly not claimed before
while filing the original return of income. As a result, the High Court's
contrary order was to be set aside, and the assesses claim was to be rejected.