TMI Blog1967 (2) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosing a loss of Rs. 5,000, the second, for the assessment year 1963-64, relating to his account November 9, 1961, to October 28, 1962, disclosing a loss of Rs. 18,094, and the third, for the assessment year 1964-65, covering his account October 29, 1962, to November 16, 1963, showing a profit of Rs. 32,574, as against which he sought to set off the losses of the first two years and claimed that only the balance of Rs. 8,730 be subjected to tax. The respondent rejected the claim for set-off on the ground that the two earlier returns disclosing losses had been filed beyond the period of limitation prescribed by sub-section (3) of section 139 of the Income-tax Act, 1961. An appeal by the assessee to the Appellate Assistant Commissioner, Dharwar Range, was also unsuccessful. The petitioner thereupon has come to this court with this writ petition in which his principal contention is that it was wrong on the part of the Income-tax Officer to have thought that his first two returns were so invalid as to be actually put out of account or ignored and that he having failed to perform a statutory duty which the petitioner is entitled to ask him to perform in protection of his own right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l apply in every such case." Sub-section (3) of the 1961 Act corresponds to sub-section. (2A) of section 22 of the Act of 1922, which was inserted into it by the amendment of the year 1953. Sub-section (4) corresponds to sub-section (3) of the said section 22. For the purpose of reference we copy below sub-sections (2A) and (3) of section 22 of the 1922 Act. " (2A) If any person, who has not been served with a notice under sub-section (2), has sustained a loss of profits or gains in any year under the head 'profits and gains of business, profession or vocation', and such loss or any part thereof would ordinarily have been carried forward under sub-section (2) of section 24, he shall, if he is to be entitled to the benefit of the carry-forward of loss in any subsequent assessment, furnish within the time specified in the general notice given under sub-section (1) or within such further time as the Income-tax Officer in any case may allow, all the particulars required under the prescribed form of return of total income and total world income in the same manner as he would have furnished a return under sub-section (1) had his income exceeded the maximum amount not liable to income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee considered represented his true income. They also pointed out that there was no provision in the Income-tax Act which would enable the income-tax authorities totally to refuse to consider a return, if filed. After noticing the difference of opinion referred to above, their Lordships made a general observation that they were unable to accept the view adumbrated in the Calcutta case. The decision of the Supreme Court mentioned above was rendered upon an interpretation of section 22 of the Act of 1922 before it was amended by the insertion of the new sub-section (2A). The question whether the said amendment made any difference to the application of the general principles stated by the Supreme Court was examined in a subsequent case of the Bombay High Court reported in Radhakrishna Rungta v. Seventh Income-tax Officer. Their Lordships pointed out that the only extent to which the new sub-section may be said to have made a difference to the legal position was or should be limited to specific cases expressly dealt with in the said sub-section. Those cases are cases in which an assessee intends to carry forward his losses to a subsequent year---the effect of the section bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealing with notice and consequence thereof does not also involve any great departure from the previous position. Sub-section (3), which corresponds to sub-section (2A) of the old section 22, involves a departure in one important particular. Whereas the return of loss under the old sub-section (2A) could have been made either within the time prescribed under sub-section (1) or within such further time as the Income-tax Officer in any case may allow, the benefit of extension of time by the Income-tax Officer is not found stated in sub-section (3) of the present section 139. It would appear therefore that whereas in cases covered by the old Act the Income-tax Officer had the power to extend the time, that power must be taken to have been taken away by the present sub-section (3). The argument, however, addressed on behalf of the petitioner is that after saying that the return of loss may be furnished within the time allowed by sub-section (1), the sub-section concludes with the words: " all the provisions of this Act shall apply as if it were a return under sub-section (1)", and that, therefore, there is no compulsion or logic to hold that the power of extending time under the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time therefor stated in unqualified terms omitting the old provision for extension by the Income-tax Officer appears to subserve a definite purpose in the interests of the revenue as stated above, an interpretation which defeats such purpose should not, in our opinion, be adopted. The result of the decisions discussed and the alterations in the law made by the new Act is that if a person desires to acquire the benefit of carry-over, or to become entitled to carry forward a loss incurred by him in any year to a subsequent year or subsequent years to be set off against the profits of such subsequent year or subsequent years, he should make a return of loss within the period prescribed by sub-section (1) of section 139. If he does not do so, he loses the benefit of carrying forward the loss on the expiry of the period of limitation prescribed therefor. A benefit so conferred by the statute subject to conditions stated in clear terms cannot thereafter be conferred upon him by the Income-tax Officer exercising his discretion of extending the time. But, if his purpose is not to get the benefit of carry-forward, he will not be limited by the strict terms of sub-section (3) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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