TaxTMI 
TaxTMI 
2008 (11) TMI 144
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....ursuance thereto was valid in law?" 3. The relevant facts giving rise to the present appeal are briefly set out hereunder. (i) The appellant (assessee) is an investment company carrying on business of dealing in investments. The appellant had originally filed a return of income for assessment year 1989-90 before respondent No.1 on 29 December, 1989 declaring a loss of Rs.63,07,631. By a letter dated 16 March, 1990, addressed to the assessee, the A.O. stated that there were certain defects in the return and requested the assessee to correct the said defects within 15 days on receipt of the letter. Since this letter was received by the assessee on 22 March, 1990 the assessee was required to rectify the defects by 16 April, 1990. It is the assessee's case that on receipt of the said letter the assessee's representative had seen the A.O. and had orally requested for extension of one month's time to rectify the defect. (ii) Subsequently, the appellant filed a revised return of income on 19 April, 1990 i.e., 27 days from the date of receipt of the letter from the A.O., declaring a total loss of Rs.63,63,625 and rectifying all the defects mentioned in the letter dated 16 March, 1990. O....
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....learned DCIT, Spl. Range 15, has failed to take cognizance of letter dated 24 May, 1990 of the ACIT Circle 3(4) which in effect confirmed the fact that the extension of time was granted to the appellant to rectify the defects stated in the letter of the ACIT Cir. 3(4) dated 16 March, 1990. 4. Your appellant prays that the letter refusing rectification under sec.154 of the I.T. Act is not based on correct appreciation of facts and that the original return filed by the appellant on 29 December, 1989 is valid in law and ought to have been accepted by the DCIT, Spl. Range 15. Your appellant further prays that the DCIT, Spl. Range 15 may be directed to rectify the mistake apparent from record." (vi) The order of the A.O. dated 17 February, 1992 rejecting the rectification application of the assessee was set aside by the CIT(A) by his order dated 29 June, 1994. The CIT(A) was of the view that the decision of the A.O. that the return filed on 29 December, 1989 was invalid because the revised return was filed beyond the period of 15 days from the date of receipt of the notice under section 139(9) is not correct. The CIT(A) in the said order also held that since all the defects pointed ou....
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....ed that he did not agree with the arguments of the A.O., that for determining the carry forward of loss, it was necessary to compute the income under section 143(3). He further observed that if any assessee files the return of income in time, which for one reason or the other, remains to be considered, then, loss shown in the return has to be accepted subject to rectification of mistake which is apparent from the record. The CIT(A), therefore, rejected the argument of the A.O. and held that time limit for issuing a notice under sec.143(2) had already elapsed and as such notice issued on 14 September, 1995 was invalid and bad in law. In view thereof the assessment order passed under sec. 143(3) as a consequence of the same was also invalid and bad in law. The CIT(A), therefore, quashed the order of the A.O. and allowed the appeal. (x) Being aggrieved by the order of the CIT(A) dated 21 July, 1997, the Revenue filed an appeal before the Appellate Tribunal and submitted that the notice under section 143(2) was not barred by limitation as the same was issued in pursuance of the directions of the learned CIT(A). (xi) On behalf of the assessee it was contended before the Tribunal that ....
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.... decision of the suit itself. That is to say, the finding shall be one which is necessary for the disposal of the suit. 7. The meaning of expression "finding" as considered by the Division Bench of Allahabad High Court in Pt.Hazari Lal Vs. Income Tax Officer, reported in [1960] 39 ITR 265, is set out hereunder (page 272): "The word "finding", interpreted in the sense indicated by us above, will only cover material questions which arise in a particular case for decision by the authority hearing the case or the appeal which, being necessary for passing the final order or giving the final decision in the appeal, has been the subject of controversy between the interested parties or on which the parties concerned have been given a hearing." 8. The Hon'ble Supreme Court in its decision in ITO Vs. Murlidhar Bhagwandas reported in [1964] 52 ITR 335 after setting out the above interpretation to the expression "finding" given by the Division Bench of the Allahabad High Court in Pt. Hazari Lal's case [1960] 39 ITR 265 agreed (by majority) with the same and rejected the interpretation given to the expression "finding" by the Full Bench of Allahabad High Court in Lakshman Prakash Vs. Commiss....
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....ing, it must be directly involved in the disposal of the case." 11. In support of his above submission, the learned Counsel for the assessee has also relied on the Division Bench decision of the Calcutta High Court in Goombira Tea Co. P. Ltd. Vs. Income Tax Officer, reported in [1980] 125 ITR 260. In that case, the appellants therein were being assessed by Income-Tax Officer, A Ward, Karimgunj, Assam. The CBDT by its order dated 30 June, 1973 transferred the cases to the ITO, Central Circle XXXIII, Calcutta. Aggrieved by this order, the appellants moved the court under article 226 of the Constitution of India and obtained rules nisi. They also obtained an interim order under which all further proceedings were stayed. The interim order was subsequently varied at the instance of Revenue to the extent that the proceedings may continue and the final order be passed but it will not be given effect to or communicated pending the disposal of the rules. Thereafter the rules were made absolute and writs were issued by a single Judge quashing the impugned order of transfer and directing the Income Tax Authorities from giving effect or further effect to the order of transfer and also t....
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....er sec. 143(3) of the I.T. Act, 1961. 14. The learned Counsel for the revenue relied on the decision of the Hon'ble Supreme Court in Daffadar Bhagat Singh and Sons Vs. Income Tax Officer, reported in [1969] 71 ITR 417. In that case the appellant-firm comprising of father and his two sons, filed a return for the assessment year 1952-53 on March 31, 1953 and also applied for registration under section 26A of the Income Tax Act, 1922. The Income-Tax Officer refused registration and passed an order of assessment on March 26, 1957 holding that the assessee constituted a Hindu undivided family. On August 11, 1959, the Appellate Assistant Commissioner, on appeal, allowed registration of the firm. He held that the business belonged to the firm and its income ought to be excluded from that of the family and directed the Income-Tax Officer to assess the income of the business in the hands of the firm. Thereafter, the Income Tax Officer issued fresh notices to the appellant under sections 22(4) and 23(2). The appellant filed a petition under articles 226 and 227 of the Constitution for a writ prohibiting the Income Tax Authorities from proceeding with the assessment. The High Court dismissed....
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....lost sight of the fact that the assessee has already cleared the defects on 19 April, 1990, once again by a letter dated 29 May, 1990 called upon the assessee to clear the said defects. On 28 September, 1990, the Revenue informed the assessee that the return of the assessee had been ignored by the Revenue because the defects were not cleared within the prescribed period of 15 days from the receipt of the notice dated 16 March, 1990. The assessee filed the rectification application dated 8 January, 1992 stating that the original return was filed before the prescribed date for filing the return of income, namely, 31 December, 1989 under section 139(1) of the I.T. Act and further that the appellant filed the revised return of income on 19 April, 1990 revising the loss figure and rectifying the defects in the original return. The request of rectification was turned down by the Revenue on 17 February, 1992. 16. The appellant filed an appeal before CIT (A) on 12 March, 1992 on a very limited ground set out hereinabove, namely, that the return filed on 29 December, 1989, have been filed within the period prescribed under section 139(1) of I.T. Act, that the defects in the said return wer....