Court Upholds Revenue Decision; Failure to Timely Challenge Officer's Calculation Bars Assessee's Claim

The High Court upheld the Tribunal's decision, ruling in favor of the Revenue and against the assessee. The Court emphasized that the assessee failed to challenge the Income-tax Officer's calculation of claim under section 80J for the year 1968-69 in a timely manner, as required by the Act. Therefore, the claim for the assessment year 1972-73 could not be considered. The Court held that the specific procedure for challenging such orders must be followed, and since the assessee did not do so, the claim was not valid for subsequent years.

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Issues:
- Whether the Tribunal correctly decided not to consider the claim of the assessee during the assessment year 1972-73 regarding the calculation of claim under section 80J done by the Income-tax Officer during the assessment year 1968-69Rs.

Analysis:
The case involved a dispute regarding the deduction under section 80J of the Act for the assessment year 1972-73. The assessee, engaged in the production of cold drinks, claimed a deduction at the rate of six percent. The claim was related to the capital employed for the whole assessment year 1968-69, with a part of the amount to be carried forward and set off against the income of the assessment year 1972-73. However, the Income-tax Officer rejected the claim, and subsequent appeals to the Appellate Assistant Commissioner and the Tribunal were also dismissed. The Tribunal concluded that the assessee should have raised the grievance regarding the calculation of claim under section 80J for the year 1968-69 when appealing against the Income-tax Officer's order for that year. The Tribunal held that since the calculation or finding of the Income-tax Officer for the year 1968-69 was not agitated, the assessee could not raise the issue for the assessment year 1972-73.

The assessee argued that there were no profits prior to the assessment year 1972-73, and therefore, it was not mandatory to claim or determine the deduction under section 80J from the year 1968-69 onwards. The assessee relied on a decision by the Jammu and Kashmir High Court, which stated that the right to claim deduction under section 80J arises only when profits are made for the first time. The court also referred to various other High Court decisions supporting the assessee's claim for carry forward and set off of section 80J deficiency in the year of profit, even in the absence of computation in the year of loss.

Ultimately, the High Court upheld the Tribunal's decision, stating that the assessee failed to challenge the Income-tax Officer's calculation of claim under section 80J for the year 1968-69 when the opportunity was available. The Court emphasized that the Act provides a specific procedure for challenging such orders, and if not followed, the claim cannot be made in subsequent years. Therefore, the Tribunal was correct in law in not considering the claim of the assessee for the assessment year 1972-73, as the calculation issue from the assessment year 1968-69 was not raised at the appropriate time.

The High Court answered the reference in favor of the Revenue and against the assessee, with no order as to costs.

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