TMI Blog1952 (3) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... arrying on business in yarn and cloth. He apparently started his business only in 1941-42 and in the course of the assessment for the year 1943-44 the Income-tax Officer discovered that the assessee was doing business in the assessment year 1942-43 also, though he did not submit a return of his income; and therefore he issued a notice to the assessee under Section 34 of the Act read with Section 22(2) on 21st September, 1945. The assessee submitted a return of his income, but it was discovered thereafter by the Income-tax Officer that there was no income at all during that period. During the assessment year 1943-44 the assessee claimed that his loss in the previous assessment year 1942-43 was ₹ 7,875 and that he was entitled to set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 34 was not a proceeding intended to assess the total income of the assessee, the duty under Section 24(3) is not cast on the Income-tax Officer, as that provision is not attracted by Section 34 of the Act. Counsel for the assessee attempted to draw a distinction between that case and the present on the ground that in that case there was a nil return, whereas in the present case there was no assessment at all and there was no return. But we think that this distinction does not make any difference in the application of the principle. The scope of a proceeding under Section 34, as pointed out in that decision, which follows earlier decisions, is very limited, and is not in the nature of a proceeding for assessing the total income under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this section, i.e., Section 24. The provisions under this section which were introduced for the first time by the Amending Act of 1939 which entitled an assessee to claim relief in respect of loss are twofold. Under Section 24(1), if an assessee sustained a loss of profits or gains in any year under any of the various heads enumerated in Section 6, but made profits in the same year under any of the other heads of that section, he could claim that the loss should be set off against the profits. But that is restricted only to the loss and profit which accrued during the particular assessment year, and is confined only for setting off loss accrued on one head as against the profit earned under another head. If after so setting off there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore of ascertaining the loss of a previous year would never arise and cannot arise and therefore there would be no duty where a right under Section 24(2) exists compelling the Income- tax Officer to determine the loss of the previous assessment year. Section 24(3) can only apply therefore to a case where in the same assessment year there was loss under one head and profit under another head; but the Income-tax Officer for reasons best known to himself refused to determine the loss but proceeds with the assessment of the income of the heads under which there is profit. Section 24(3), in our opinion, does not help the assessee in his claim that he is entitled to the benefit of Section 24(2) and to compel the Income-tax Officer to determine th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss exceeded the profits in the year leaving a balance, then alone it could be carried forward under Section 24(2), seems plausible. But it is unnecessary to express a final opinion on this question. It is no doubt true, as pointed out by the Appellate Tribunal, there is a lacuna in the Act in not making it compulsory upon the Income-tax authorities to assess the loss of an assessee in a particular year when he has no assessable income to enable him to carry it forward and claim to set it off in the succeeding year. But it is a matter for the legislature to consider whether they would adopt a policy of giving relief to assessees in such cases but we are not concerned with it. The question referred to us must therefore be answered in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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