Court allows petition for carry forward of losses for assessment years 1980-81 and 1981-82.

The court partially allowed the petition, directing the Income-tax Officer to determine the returns and decide on the carry forward and set off of losses for assessment years 1980-81 and 1981-82 in accordance with the law. The petitioner was found entitled to apply for determination of losses for those years and carry forward the losses for set off. However, the court upheld the Income-tax Officer's decision for assessment year 1979-80, as no further appeal was pursued, leading to finality of the Officer's order for that year.

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Issues:
1. Claim for carry forward of losses for assessment years 1980-81, 1981-82, and 1982-83.
2. Determination of loss for assessment year 1979-80 without an order for carry forward.

Analysis:

1. The petitioner, engaged in cinema feature film production, filed returns of losses for assessment years 1977-78 to 1982-83. The Income-tax Officer assessed the income for 1982-83 at Rs. 2,91,645. The petitioner sought to carry forward losses for 1980-81 and 1981-82 against the income assessed for 1982-83. The Department rejected the claim citing the issuance of notices under section 148. The court referred to various decisions, including Kareemsons Pvt. Ltd. v. CIT, emphasizing that the right under section 139(4) to file returns and claim losses cannot be lost due to proceedings under section 147. The court held that the petitioner was entitled to apply for determination of losses for 1980-81 and 1981-82 and carry forward those losses for set off.

2. Regarding the assessment year 1979-80, the Income-tax Officer determined a loss of Rs. 23,691 without an order for carry forward. The petitioner's appeal to the Assistant Commissioner was dismissed, and no further appeal was pursued, leading to finality of the Income-tax Officer's order for 1979-80. Consequently, the court found it untenable to disturb the Officer's decision for that assessment year.

In conclusion, the petition was partly allowed. The Income-tax Officer was directed to determine the returns and decide on the carry forward and set off of losses for 1980-81 and 1981-82 in accordance with the law. No costs were awarded in the given circumstances.

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