1984 (2) TMI 147

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....at the return was within the time prescribed. The fact was not disputed before us by the learned departmental representative. But the return seems to have been misplaced. The ITO did not frame the assessment for the assessment year 1976-77 and the assessment has become barred by limitation. Although the assessee was not at fault for the situation and although the AAC had all the sympathy for the assessee, he found that the claim of the assessee to carry forward the loss and to set off the same cannot be allowed in view of section 80 of the Income-tax Act, 1961 ('the Act'). Aggrieved by the same, the assessee has now come up in appeal. 4. The grounds taken by the assessee are to the following effect. The assessee cannot be penalised and d....

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....s set out in the section and that it cannot apply to the carry forward of depreciation under section 32(2). Section 80 cannot, therefore, stand in the way of the claim of the assessee for carry forward and set off of the unabsorbed depreciation. 6. Even if the claim of the assessee is to carry forward and set off the loss, the same cannot, in our view, be defeated by the failure on the part of the ITO to frame the assessment for the earlier assessment year. It will be highly inequitable to defeat the rights conferred on the assessee to have the loss carried forward for no fault of his. It is, therefore, necessary to give a reasonable interpretation to the provisions of section 80. The purpose of section 80, in our view, is not to debar t....