TaxTMI 
TaxTMI 
1970 (4) TMI 33
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....the assessee filed a voluntary return for the assessment year 1955-56 showing a loss of Rs. 69,578. The Income-tax Officer, thereafter, issued to the assessee a notice under section 23(2) of the Act, examined its accounts a number of times and passed an order in the order sheet saying: "The loss returned is out of time. The same is, therefore, filed." The assessee appealed to the Appellate Assistant Commissioner, who allowed the appeal saying: "The objection of the appellant is two-fold. Firstly, that the Income-tax Officer, having issued a notice under section 23(2), had condoned the delay.... I find that the Tribunal has in another case taken the view that when the Income-tax Officer issued a notice under section 23(2), he condon....
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....istant Commissioner allowed the appeal holding: " In my view, it is now not open to me to see whether the order of my predecessor was right or not, or whether I would have come to the same conclusion, if I have to consider the case in all its aspects. When my predecessor passed the order directing the Income-tax Officer to compute the loss and by a clear implication to carry it forward, the Income-tax Officer had no option but to follow his directions. If the view of my predecessor was not acceptable, the department should have gone in appeal. Once the order of the Appellate Assistant Commissioner has not been challenged, it is to be implemented. The order of the Income-tax Officer refusing to carry forward the loss is, therefore, contra....
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.... follows: " If any person who has not been served with t notice under sub-section (2) has sustained a loss of profits or gains in any year under the head 'profits and gains of business, profession or vocation,' and such loss or any part thereof would ordinarily have been carried forward under sub-section (2) of section 24, he shall, if he is to be entitled to the benefit of the carry forward of loss in any subsequent assessment, furnish within the time specified in the general notice given under sub-section (1) or within such further time as the Income-tax Officer in any case may allow, all the particulars required under the prescribed form of return of total income and total world income in the same manner as he would have furnished a r....
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....stead of doing that, he issued a notice to the assessee to produce or cause to be then produced before him evidence in support of the return. The only inference, therefore, is that the Income-tax Officer was not prepared to reject the return as filed beyond time, but was prepared to consider it on merits on the footing that the delay was liable to be condoned. In our opinion, in view of the fact that the Income-tax Officer had power to grant further time under section 22(2A) of the Act, his acting under section 23(2) was consistent and consistent only with the inference that he was impliedly granting to the assessee further time for the filing of the return by condoning the delay in its late filing. If this inference were not permissible, w....
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...., the only purpose for which the return of loss was filed by the assessee. The effect of the order of the Appellate Assistant Commissioner was: (a) That he was holding that by issuing a notice under section 23(2) of the Act the Income-tax Officer should be deemed to have granted further time for the filing of the return; (b) that as, in his view, the Income-tax Officer had granted further time to the assessee for the filing of the return, his (the Income-tax Officer's) order filing the return as filed out of time was to be set aside ; (c) that as the enquiry on the return had not been completed, it had to be completed; and (d) that as the only purpose of the loss return filed by the assessee was to get the loss computed by the I....