TMI Blog2001 (10) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the time allowed under s. 139(3). The appellant has also agitated on the similar ground for the asst. yr. 1991-92. 2. The brief facts of the case are that the assessee had claimed brought forward business loss of Rs. 17,24,077 and depreciation of Rs. 5,18,115 of the asst. yr. 1989-90. The same was not to be allowed in asst. yr. 1989-90 due to the fact that in the return for asst. yr. 1989-90, the accounts for the entire period were not filed. The said return was filed under intimation to the assessee on 1st Aug., 1990, and the return was held to be invalid. The learned CIT(A) deleted the above addition made by the AO for the reason that the loss for that year was determined in the assessment completed under s. 143(1)(a) of the Act o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justified in rejecting the claim of the assessee for brought forward of loss and depreciation of asst. yr. 1989-90 when the loss for that year was determined in the assessment completed under s. 143(1)(a) of the Act on 15th March, 1990, and the return filed by the assessee-company was treated as a legally valid return and no action under any of the sections was taken thereafter. Consequently, the assessee should be allowed the brought forward loss of asst. yr. 1989-90 in the year under consideration. 5. The learned Departmental Representative relied upon the order of the AO and contended that the AO had not processed the return under s. 143(1)(a). The accounts for the whole year was not audited under s. 44AB. There was no regular assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treating the return for asst. yr 1989-90 as invalid by issuing letter on 1st Aug., 1990, was illegal for the following reasons: 1. The assessee-company did its best and filed return on the basis of accounts for the part of period in absence of any record for the remaining period. In such circumstances, the duty of the AO was to assess the income of the assessee on the basis of best judgment and not to hold that return of income filed by the assessee as invalid return. The law does not provide any such power to the AO to treat its return as invalid return. 2. The action of the AO was unilateral without providing any opportunity to the assessee to explain its case. Even otherwise this is not a case of s. 139(9) where the AO points out the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 539 (SC); 3. CIT vs. Manmohan Das (1966) 59 ITR 699 (SC); and 4. G.R. Jayarama Reddy vs. CIT (1968) 68 ITR 813 (Mys). Therefore, the action of AO of treating the return as invalid should not be recognised. The loss of the asst. yr. 1989-90 should, therefore, be allowed to be carried forward and set off for the year under consideration. 6. We have considered the rival submissions and perused the facts of the case. The assessee-company filed its return of income for asst. yr. 1989-90 under the provision of s. 139(1) on 29th Dec., 1989. Income/loss of the assessee was calculated on the basis of audited accounts for the part of the year i.e., 22nd Nov., 1988, to 31st March, 1989. The reason for preparation of the accounts for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the return shall be deemed to be intimation under this sub-section, where either no sum is payable by the assessee or no refund is due to him. The requirement of passing an assessment order in all cases, where returns of income are filed, has been dispensed with and the issue of an acknowledgement slip to the assessee will be the end of the matter, if the assessee has correctly paid tax and interest, if any, due on the basis of the returned, (ii) if on the basis of the return any amount is found due from the assessee, it can be recovered; if any refund is found due to the assessee, it can be granted without passing an assessment order, and (iii) assessment orders will be passed only in a very limited number of cases selected for scruti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts for the entire period. The law cannot compel a man to do that which he cannot possibly perform (lex non cogit ad impossibilia). Therefore, we conclude that the learned CIT(A) was justified in allowing the assessee the benefit of carry forward/set off of losses and depreciation from the asst. yr. 1989-90 onwards. However, we find that the assessee could not file audited accounts for the entire period because the books of account were in the possession of old management. These books of account had subsequently been received by the new management on 24th Dec., 1993. It has rightly been contended by learned Departmental Representative that the amount of loss/depreciation was not quantified by the assessee in its books of account and accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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