1999 (5) TMI 22

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....e accounting period ending on June 30, 1984, books were audited by the auditor and it was found that the embezzlement started from 1982-83 to 1984-85. Yearwise break-up has been given in the order of the Commissioner. The Assistant Commissioner of Income-tax, observed : "Embezzlement loss incurred during the year ending June 30, 1985, amounting to Rs. 28,025 is allowed. The assessee is not allowed to carry forward of previous years embezzlement losses pertaining to the assessment year 1984-85 and previous assessment years for the reasons mentioned in the assessment order for 1985-86." The return filed by the petitioner was for the loss of Rs. 3,77,175, whereas, the income computed in the assessment order was Rs. 1,63,900. The Income-t....

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.... for 1986-87 and, therefore, the Commissioner of Income-tax was not justified in treating the loss of the previous year, as not allowable in the year 1986-87. Reliance is placed on the Central Board of Direct Taxes Circular No. 35-D (XLVII-20) of 1965-F. No. 10/48/65-I.T.(AI), dated November 2, 1965, which reads : "Allowance of embezzlement loss : Losses by embezzlement by employees---Treatment of, for the purposes of income-tax assessments.---A reference is invited to the instructions on the above subject contained in Board's Circular No. 25 of 1939 and Circular No. 13 of 1944. In these circulars it was clarified that losses arising due to embezzlement by employees or due to negligence of employees should be allowed if the loss took ....

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....uties to assist a taxpayer in every reasonable way particularly in the matter of claiming and securing reliefs and in this regard the officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the Department ; for it would inspire confidence in him that he may be sure of getting a square deal from the Department. Although, therefore, the responsibility of claiming refunds and reliefs rests with the assessee on whom it is imposed by the law, officers should : (a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for s....