TMI Blog1992 (11) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... doing own business. For the assessment year 1985-86 the assessee filed a return showing loss of Rs. 4,05,243. The Assessing Officer completed the assessment on 25-3-1988 determining the loss at Rs. 12,01,863 and observed as follows :-- " Since the assessee has applied for extension of time for filing the return till 30-9-1985 only and since the return was filed only on 31-7-1986 this loss is not eligible for carry forward. " Being aggrieved, the assessee took up the matter in appeal before the CIT(Appeals), Trivandrum, who, vide his order dated 30-11-1988 in IT Appeal No. 17-Q/88-89, upheld the order of the Assessing Officer holding that in accordance with the provisions of section 80 as amended with effect from 1-4-1985, loss return has to be filed within the time allowed under section 139(1) or within further time as allowed by the ITO. Hence, this further appeal by the assessee. 4. This appeal is barred by limitation by 399 days. A petition for condonation of delay was filed. It is submitted that the order of the CIT(A) was received by the assessee's staff on 22-12-1988. The petitioner's authorised representative, Shri N. S. Panicker, expired on 26-11-1988. The petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per assessment order dated 19-1-1987 and the loss was determined only at Rs. 2,22,349. For the assessment year 1986-87 the loss was increased from Rs. 12,62,236 to Rs. 14,38,692 and allowed the same to be carried forward. The above loss of Rs. 14,38,692 was set off in the proceedings dated 12-12-1990. No appeal proceedings are pending for the assessment year 1986-87, as the assessee has no grievance. For the assessment year 1985-86 by an order dated 25-3-1988 the Assessing Officer determined the net loss at Rs. 12,01,863 and held that the assessee was not eligible for carry forward of loss as he had filed the return on 31-7-1986 whereas the assessee had applied for extension of time only up to 30-9-1985. The appeal preferred by the assessee was dismissed by the CIT(A) and the second appeal Is pending before the Tribunal being ITA No. 223 (Coch.)/90. Before the CIT(A) the assessee submitted that applications for extension of time in Form No. 6 were filed as follows : Date of filing Time sought for up to 27-6-1985 30-9-1985 27-9-1985 31-3-1986 26-3-1986 31-7-1986 The assessee also produced the delivery book before the CIT(A) and copies of the above Form No. 6. After conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1984-85 was concerned, it was submitted that the CIT(A) by his order dated 25-2-1992 in ITA No. 218-T/1990-91 for the assessment year 1987-88 has upheld the claim of the assessee for carry forward of loss. After considering the submissions of the assessee the CIT(A) held in para 3 of his order dated 28-3-1992 for the assessment year 1988-89 as follows :-- " 3. In view of the appellate order for 1987-88 referred to above, the appellant would be eligible for set off of loss of Rs. 2,22,349 pertaining to the assessment year 1984-85. On giving effect to the abovesaid appellate order, the appellant's ground relating to set off of loss for 1984-85 will no longer survive. As far as the set off of loss for the assessment year 1985-86, the CIT(Appeals) by his order dated 30th November, 1988 has dismissed the appellant's plea. Based on the abovesaid decision, I did not entertain the appellant's claim in my appellate order for 1987-88. The same decision continues for this year also. " Hence, the revenue has filed ITA No. 502 (Coch.)/92 against the finding of the CIT(A) that the assessee is eligible for set off of loss of 1984-85 assessment year whereas the assessee is in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was under section 139(4) for the assessment year 1984-85. The loss was determined by the ITO in pursuance of the return. Hence, we hold that the right to carry forward the loss cannot be denied to the assessee. The CIT(A) was justified in allowing the claim of the assessee. On an analogous provision of the IT Act, 1922, the Supreme Court of India in CIT v. Kulu Valley Transport Co. (P.) Ltd. [1970] 77 ITR 518, had decided the issue in favour of the taxpayer. The Board's instruction No. 210 dated 28-8-1970 is also in favour of the taxpayer wherein the Board had accepted the applicability of Kulu Valley decision to the provisions of section 139 of the 1961 Act. In this view of the matter, the revenue's appeals against the right of the assessee to carry forward the loss relating to the assessment year 1984-85 are dismissed. 11. Now, we turn to the loss determined for the assessment year 1985-86. After determining the loss, the Assessing Officer held that the assessee had filed for extension of time only up to 30-9-1985 but filed the return on 31-7-1986 and therefore, the assessee would not be entitled to carry forward the loss for set off in the subsequent years. 12. The argumen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions in 17 ITD 980 (sic). Harmanjit Trust v. CIT [1984] 148 ITR 214 (Punj. Har.) and CIT v. Bishwanath Khirwal [1986] 161 ITR 382 (Pat.). 14. The other argument of Shri C. K. Nair is that the question of carry forward of loss for being set off against the income would arise only in the year in which there was income to be considered. Therefore, it was his submission that the issue can be agitated in the years 1987-88 and 1988-89 when there was income against which the losses of earlier years can be adjusted. For this proposition, he relied on the decision of the Supreme Court reported in 59 ITR 699. Shri Abraham, on the other hand, contended that the above decision was rendered under the provisions of the Indian Income-tax Act, 1922 and, therefore, it would not be applicable to the provisions of section 80 of the IT Act, 1961, as amended with effect from 1-4-1985. 15. We have carefully considered the rival submissions. Section 80, though heralded by a marginal heading to the effect " Submission of return for losses " finds its place in the Chapter " Set off or carry forward and set off " of losses. In CIT v. Manmohan Das [1966] 59 ITR 699 (SC) the Apex Court held that " wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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