TMI Blog1968 (9) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... returned by the company. Income or loss computed by the Income-tax Officer 1954-55 61,24,270 (Loss) 22,53,457 (Loss) 1955-56 4,59,963 (Profit) 19,84,447 (Profit) 1956-57 12,92,958 (Profit) 16,88,480 (Profit) 1957-58 23,05,305 (Loss) 12,53,222 (Loss) 1958-59 40,44,779 (Loss) 31,48,707 (Loss) 1959-60 28,77,487 (Loss) 20,62,180 (Loss) 1960-61 11,35,365 (Loss) Assessment pending 1961-62 66,086 (Loss) 1962-63 44,93,236 (Profit) 1963-64 74,52,402 (Profit) 1964-65 59,89,757 (Profit) Against the orders of assessment made by the Income-tax Officer for the years 1954-55 to 1959-60 determining its net income or loss as set out in the chart the company appealed to the Appellate Assistant Commissioner, and the appeals were pending at the dates of commencement of the petitions in the High Court of Rajasthan which give rise to the proceedings in this court. Assessments for the years 1960-61, 1961-62, 1962-63, 1963-64 and 1964-65 were, however, then not completed. In its return of income for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to make any enquiry before making a provisional assessment ; he is not bound even to give to the assessee any notice of his intention to make a provisional assessment, nor to hear the assessee. He may, if he desires, call upon the assessee to elucidate the return or the entries posted in the accounts and documents, but he is not obliged to do so. Section 141 has been enacted with the object of expediting collection of tax on the basis of the return made by the assesse. The Act contains several provisions for collection of tax before regular assessment, e.g., payment of advance tax, deduction of tax at source from salary and dividends, provision for self-assessment, etc. The object of these provisions is to collect tax on certain classes of income before regular assessment. The provisional assessment does not bind the assessee nor the department : the quantum of tax computed and the levy thereof are not binding upon the assessee and the revenue. Tax paid pursuant to provisional assessment is liable to be adjusted in the light of the final order in the regular assessment. An appeal against the order is expressly prohibited. The Income-tax Officer must, however, apply the rate oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputed." Section 80 of the Act provides : " Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed under section 139, shall be carried forward and set off under sub-section (1) of section 72 or . . . " Under section 72(1) read with section(80) loss of a previous year under the head of income from profits and gains of business, profession or vocation may be carried forward to the next succeeding year only if it has been determined in pursuance of a return filed under section 139. If it is not so determined in the assessment of the subsequent year the loss cannot be carried forward and set off against the profit of the subsequent year or years. By sub-section (2) of section 141 the Income-tax Officer is enjoined to give effect to the loss so certified and carried forward. But it does not follow therefrom that when the assessee claims that out of the income of the year returned by him certain amounts are liable to be deducted in computing the taxable total income, the Income-tax Officer may adjudicate upon the validity of the claim in making a provisional assessment. In our judgment, if it be granted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n such losses in the returns could not, in the view of the High Court, be accepted : to give effect to the claim of the company, in the view of the High Court, will be to ignore the provisions of section 80 which apply both to a regular assessment and a provisional assessment under section 141. We are unable to accept the opinion of the High Court. If it be assumed that provisional assessment has to be made in accordance with and subject to the provisions of the Act, distinction between a provisional assessment and a regular assessment gets completely blurred. The scheme of section 141 is to call upon the assessee to pay tax provisionally at the appropriate rate on what he admits is his taxable income, subject to the benefit of the allowances under sub-section (2). The section does not permit an enquiry to be made whether the total income returned by the assessee exceeds the amount admitted by him, nor whether the allowances or deductions claimed are admissible. If there be a discrepancy between the return made and the accounts and documents accompanying the return, the Income-tax Officer may ask the assessee to explain the discrepancy, but he must make a provisional assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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