TaxTMI 
TaxTMI 
1986 (3) TMI 134
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....bsp; Loss Date of Loss determined year for return the return/ under returned assessment revised return which filed ------------------------------------------------------------------------------------------------ 1975-76 30-6-1975 31-10-1979 139(4) 2,41,885 23-2-1981 4,75,000 ....
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....6-1980 139(5) 10,30,504 1979-80 30-6-1979 08-07-1981 139(4) 11,81,883 19-2-1982 11,66,880 1980-81 30-6-1980 08-06-1980 139(4) 4,54,433 29-3-1983 4,00,000 ------------------------------------------------------------------------------------------------ As can be seen from the above table in all the assessment years right from 1975-76 to 1980-81 the assessee co-operative society, had only returned losses sustained by it and the ITO also while completing the assessment determined losses though the amounts of losses determined may not exactly tally with the returned losses. The ITO framed assessment under section 143(3) of the Income-tax Act, 1961 ('the Act') for the assessment year 1979-80 by this order dated 19-2-1982. In the said assessment the ITO not only determined the loss sustained by the assessee, co-operative society, for the assessmen....
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....also the wording of section 80 of the Act. It was argued to the assessee that the words used in section 80 of the Act clearly disclose that a loss-return can be filed under any of the sub-sections of section 139 and in order to get the benefit of carry forward and set off of loss the return need not necessarily be filed within the time allowed under section 139(1) or (3). However, the ITO considering the combined effect of section 80 and 139 held that the return contemplated under section 80 is the one filed in accordance with sub-section (3) of section 139 and that unless the loss is determined by the ITO in pursuance of such a return the case would be hit by section 80 and the assessee will not be entitled to the benefit of carry forward and set off of the loss. He relied upon the Calcutta High Court decision in Sun Engg. Works. (P.) Ltd. v. CIT [1978] 111 ITR 166. He held that the ratio of the said decision directly applies to the facts of the present case before him. Thus, having rejected the contentions put forward on behalf for the assessment years 1975-76 to 1980-81 and computed the total income of the assessee at Rs. 5,78,680 after giving deduction under section 80P (2) of ....
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.... on behalf of the revenue that in the impugned orders it should have be held that the assessee was not entitled to carry forward of business losses of earlier years. The learned Commissioner (Appeals) ought to have held that the decision in Presidency Medical Centre (P.) Ltd.'s case is not applicable to the facts of the assessee's case. It is also argued that in the impugned orders it should have been held that no reversal to the findings of the ITO given in the earlier years that the losses determined would be carried forward to the next year is necessary to negative the claim of the assessee. Ultimately, it is argued that the provisions of section 80 is procedural in nature and they do not contemplate passing of any order in writing. Shri D. S. Murthy, the learned counsel for the assesseee, very much relied upon the Commissioner (Appeals)'s order. 6. After hearing both sides we decide the matter as follows : section 139(4) (b) (iii) empowers an assessee to file his income-tax return within two years from the close of the assessment year in question. The facts before us are for the assessment year 1977-78, two years would be complete from the last day of that assessment year by....
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.... section 139(4). When the income-tax return was filed beyond two years from the end of the assessment year can it still be held to be a return filed under section 139(4) is a question which falls for our determination. 8. In Chaturvedi and Pithisaria's Income-tax Law, Third edn., Vol. 3, the following is stated : "A return filed by an assessee after the expiry of the period mentioned in section 139(4) (b) is non est in law and invalid. No assessment can be made on the basis of such return. Where an assessment made on the basis of such return is cancelled or set aside by the appellate or revisional authority with a direction to make fresh assessment, the fresh assessment made in pursuance of such direction would still be invalid and without jurisdiction ...." Authorities cited under this proposition of law are stated to be the Calcutta High Court decision in CIT v. Smt. Minabati Agarwalla [1971] 79 ITR 278 a decision of the same High Court in CIT v. Bissessar Lal Gupta [1976] 105 ITR 684. The same legal position is also obtaining in Sampath Iyengar's Law of Income-tax, Seventh edn., Vol. 4, the learned author stated as follows : "A return to be valid under sub-section (4....
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....s follows as per the head-note : "..... Even a person who has not furnished a return within the time allowed under section 139(1) or 139(2) can furnish a return before the assessment is made, but then the returns had to be filed before the expiry of two years from the end of the assessment years in question. The assessee, in the instant case, had not obviously filed the returns within any of these time limits and was not entitled to the determination and carry forward of losses which were admittedly claimed for the first time in returns filed in response to notices under section 148 read with section 147(a). The assessment proceedings under section 147 are evidently intended for charging to tax income which has escaped assessment in the sense that it has been underassessed, assessed at too low a rate, etc. The said provision are certainly not intended to grant relief to the assessee by way of determination of loss and carry forward thereof." The above decision aptly applies to the returns filed for the assessment years 1975-76 and 1976-77 in the case before us and in view of our above discussion of the true legal position inasmuch as the returns for these two assessment years....
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.... the losses should be computed and they should be carried forward and set off in view of the fact that the provisions of section 80 do not mention any particular section 139 but mention section 139 in general. 11. In this connection, we should do not better than citing the Madhya Pradesh High Court decision in Co-operative Marketing Society Ltd. v. CIT [1983] 143 ITR 99. In that case the facts as well as the decisions rendered thereon are succinctly stated in the head-note of the decision as follows : "For the assessment years 1972-73 and 1973-74, the assessee filed returns declaring losses in response to notices issued by the ITO under section 148 of the Income-tax Act, 1961. The assessee had not filed any return nor was it assessed for the relevant assessment years before notices were issued under section 148. The ITO computed the losses for the relevant years but declined to carry them forward for the purpose of set off in the subsequent years on the ground that the returns were not filed within the time allowed by section 139. The AAC affirmed the order of the ITO. On further appeal, the Tribunal held that since the returns for the years were filed by the assessee after s....