TMI Blog1988 (9) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... The last date for filing loss return in terms of s. 139(3) was30th June, 1983. The return was thus filed well within time to enable the assessee to claim carry forward of its losses, depreciation, etc., of the following year. It appears that the ITO took no tangible action with regard to the aforesaid validly filed return for asst. yr. 1983-84 so that action with regard to the said return became prima facie time barred on31st March, 1986. The said date expired without the determination of the loss by the ITO in respect of asst. yr. 1983-84. In addition, the assessee had also claimed carry forward of the following (1) unabsorbed depreciation for asst. yr. 1983-84 : Rs. 275,827; (2) Investment allowance pertaining to asst. yr. 1983-84 : Rs. 4,16,589 and s. 80J deficiency pertaining to asst. yr. 1983-84 : Rs. 77,557. The ITO accepted the assessee's claim for carry forward of unabsorbed depreciation, investment allowance and s. 80J(3) deficiencies in respect of asst. yr. 1983-84, even though assessment for that year was prima facie not completed and the amounts in question were not determined vide valid assessment order. He, however, refused to carry forward the loss of Rs. 3,05,190 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s could only be relevant according to them if the return has not been filed under s. 139 within the time prescribed. Respectfully differing from the decision, in my opinion, since the language is not ambiguous, the meaning as given by the ITAT cannot be transported to the section". 4. The above order of the learned CIT(A) is assailed before us by the learned counsel for the assessee as erroneous and for this he relied on the aforementioned two judgments. On behalf of the Revenue, strong reliance was placed on the order of the learned CIT(A). 5.1. Before we deal with the authorities cited by either side let us take note of the relevant provisions of the IT Act. Sub-s. (3) of s. 139 of the IT Act, 1961 provides that a person who has suffered losses within the previous year may file his return of loss for the said previous year within the time allowed under sub-s. (1) of s. 139 of the IT Act, 1961. It is common ground that in the present case, the assessee did file its return of income within the time prescribed under sub-s. (1) of s. 139 of the IT Act, 1961. 5.2. Such a return is to be processed in the manner indicated under s. 143 of the IT Act, 1961. It could be accepted unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. (1) of s. 153 which is relevant for prupose reads as below: "No order of assessment shall be made under s. 143 or s. 144 at any time after (a) the expiry of (iii) two years from the end of the assessment year in which the income was assessable where such assessment year is an assessment year Commencing on or after the first day of April, 1969". 5.7. The provisions regarding the carry forward and set off of losses, etc., are given in Chapter VI of the IT Act, 1961. The said Chapter ends with s. 80, which reads, inter alia, as below: "Notwithstanding anything contained in this Chapter no loss which has not been determined in pursuance of a return filed (within the time allowed under sub-s. (1) of s. 139 or within such further time as may be allowed by the ITO, shall be carried forward and set off under sub-s. (1) of s. 72 or sub-s. (2) of s. 73 or sub-s. (1) or sub-s. (3) of s. 74 (or sub-s. (3) of s. 74A)". 6. The combined effect of all the aforesaid provisions of law having a bearing on the issue presently before us is that in respect of a return filed within the time prescribed under s. 139(1)/139(3), an assessment under s. 143(1) or 143(3) shall be made by the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or filing of returns under s. 139(1), namely, 30 June, 1983. In the return so filed, the assessee claimed loss of Rs. 3,05,190 depreciation of Rs. 2,75,827, investment allowance of Rs. 4,16,589 and s. 80J deficiency amounting to Rs. 77,557. The ITO did not pass a formal assessment order in respect of the aforesaid assessment year within the two year time limit prescribed under s. 153(1)(a)(iii) nor did he communicate to the assessee any loss in terms of s. 157 of the IT Act, 1961. Yet while completing the assessment for asst. yr. 1984-85, he carried forward unabsorbed depreciation, unabsorbed investment allowance, and unabsorbed s. 80J deficiency pertaining to asst. yr. 1983-84 at Rs. 2,75,827, Rs. 4,16,589 and Rs. 77,577 respectively. 8. The above action of the ITO is compatible in law only with the presumption that he had accepted the above claims of the assessee in respect of asst. yr. 1983-84. Such acceptance could be possible in terms of s. 143(1) of the IT Act, 1961 only. It is not possible to presume that the ITO could accept claims regarding depreciation, investment allowance and s. 80J(3) deficiency only under s. 143(1) and could reject the claim with regard to the loss. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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