TaxTMI 
TaxTMI 
2007 (11) TMI 248
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....r the year on a return filed in pursuant to notice under section 148 ?" 2. The brief facts necessary for decision of the aforesaid question are that the assessee is an individual. He did not file any return for the assessment year 1984-85. On May 18, 1985, the Assessing Officer issued a notice to the assessee under section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the Act") requiring him to furnish return of his income in respect of the said year. The assessee filed his return in response to the notice on November 25, 1987. In this return he declared a loss of Rs. 3,15,200. The Assessing Officer processed the return and determined the loss at Rs. 1,280. However, the assessee was not permitted to carry forward the loss ....
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.... the provisions of section 139(2) and the law had created a fiction whereby when a notice was issued under section 148 of the Act, all provisions of section 139(2) shall apply. It, therefore, held that the return filed in response to notice under section 148 should be treated as a return filed under section 139(2) of the Act and, therefore, it was a return within the meaning of section 139 of the Act and the assessee was entitled to carry forward the loss in terms of section 80 of the Act. 6. To appreciate this legal question it would be apposite to refer to certain provisions of the Act, as they existed in the assessment year 1984-85. "80. Submission of return for losses.— Notwithstanding anything contained in this Chapter, no loss....
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....tion 74 or sub-section (3) of section 74A, he may furnish, within the time allowed under sub-section (1) or within such further time which, on an application made in the prescribed manner, the Income-tax Officer may, in his discretion allow a return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed, and all the provisions of this Act shall apply as if it were a return under sub-section (1)." 10. Section 139(4), at the relevant time, read as follows "(4) (a) Any person who has not furnished a return within the time allowed to him under sub-section (1) or sub-section (2) may, before the assessment is made, furnish the return for any previous year at any time b....
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....ection 139 of the Act. 13. Under section 139(2), as it then stood, the Assessing Officer could issue notice to any person to file a return if he felt that income of such person was assessable to tax. Section 139 provided that the person who had not been served notice under sub-section (2) of section 139 of the Act, could file a return of loss within the time allowed under sub-section (1) or within such further time which the Income-tax Officer may, in his discretion, allow on the application of the assessee. 14. Section 139(4) provided that if any person had not filed the return within the time allowed to him under sub-section (1) or sub-section (2) he may, before the assessment is made furnish the return for any previous year within ....
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.... as a return filed under section 139 of the Act. The only requirement of section 80 of the Act, as it stood at the relevant time, was that the return had been filed under section 139 of the Act. By fiction created by law a return filed pursuant to notice under section 148 would be a return under section 139(2) of the Act. Since it is the return under section 139(2), the provisions of section 139(3) would not be applicable because the said provisions, at the relevant time, started with the clause that "if any person who has not been served with a notice under sub-section (2)". The return would be deemed to be a return filed under section 139 by fiction created by law. 17. The Calcutta High Court in Presidency Medical Centre P. Ltd. v. CIT....
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.... an assessee would be entitled to the benefit of a return filed pursuant to a notice under section 139(2) of the Act on the ground that the return filed by the assessee was within the time prescribed under sub-section (4) of section 139 of the Act. 19. On behalf of the Revenue reliance has been placed upon the judgment of the Kerala High Court in Smt. Ashima Hariharan v. CIT [1996] 220 ITR 89. In that case, the relevant year was 1980-81. The assessee did not file the return by the due date. Notices were issued to the assessee under section 148 of the Income-tax Act, 1961, in October, 1983, and the assessee filed her return on November 10, 1983. The Income-tax Officer on assessment of the return accepted the losses, but did not permit car....