Revised ITR cannot take away capital loss carry-forward if original return was filed on time: ITAT

The ITAT, Bengaluru ruled that filing a revised ITR does not extinguish the right to carry forward capital losses if the original return was filed on time under Section 139(1) of the Income-tax Act.

A Bengaluru taxpayer filed original ITR for AY 2021-22 on October 5, 2021, declaring a capital loss of ₹5.26 lakh to be carried forward.

The taxpayer filed a revised return on March 31, 2022 under Section 139(5), disclosing additional capital gains and reducing the carry-forward loss to ₹2.99 lakh, and paid the additional tax.

The CPC and CIT(A) rejected the carry-forward claim, arguing a loss return must be filed within Section 139(1) due date.

The ITAT held that a revised return substitutes the original but does not invalidate it or deprive the taxpayer of the right to carry forward losses eligible at the time of the original filing.