TMI Blog2004 (4) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... following questions of law: "(i) Whether, on the facts and in the circumstances of the case and on correct interpretation of section 246(1)(c) of the Income-tax Act, 1961, the Tribunal was right in law in holding that as the statute does not confer an express right of appeal against the order of the specific refusal to carry forward the loss determined on assessment, this issue is debatable? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the Commissioner of Income-tax (Appeals)-X had no jurisdiction to rectify the order of the Commissioner of Income-tax (Appeals)-I, under section 154? (iii) Whether, on the facts or in the circumstances of the case, the Tribunal was right in law in allowing the departmental appeal and cancelling the order under section 154 of the Commissioner of Income-tax (Appeals)-X, thus depriving the assessee-company of its right to carry forward the loss?" The brief facts leading to the reference are as under: For the assessment year 1982-83, the assessee filed a return on July 29, 1983, showing "loss". The assessment was made by an order dated March 20, 1985. In the said order, the loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder to the effect that the assessee (appellant) will be entitled to carry forward the loss determined in the assessment for the assessment year 1982-83. Aggrieved by the said decision of the learned Commissioner of Income-tax (Appeals), the Revenue preferred an appeal before the Income-tax Appellate Tribunal (the ITAT). In its order allowing the appeal of the Revenue, the Income-tax Appellate Tribunal held that the learned Commissioner of Income-tax (Appeals) posed to himself a wrong question. The question is not whether the assessee was entitled to carry forward the loss to the subsequent years but according to the Income-tax Appellate Tribunal the real question is whether there was a right of appeal against the order of the Assessing Officer refusing to carry forward the loss. It was further observed by the Income-tax Appellate Tribunal that in his earlier order dated March 7, 1988, the learned Commissioner of Income-tax (Appeals) had held that there was no such right and this order was allowed to attain finality. No appeal having been preferred against the same by the assessee, the Income-tax Appellate Tribunal held that the appeal by the assessee against the order of the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income-tax (Appeals) dated March 7, 1988, could have been rectified as was done by the learned Commissioner of Income-tax (Appeals). The judgments in Kulu Valley Transport Co. P. Ltd. [1970] 77 ITR 518 (SC) and Presidency Medical Centre [1977] 108 ITR 838 (Cal) were available when the order dated March 7,1988, was passed. The assessee chose not to file an appeal against the order of the learned Commissioner of Income-tax (Appeals). The Assessing Officer gave effect to the order of the learned Commissioner of Income-tax (Appeals) dated March 7, 1988. The appeal filed against that order of the Assessing Officer dated December 8, 1989, was not competent as the order of the Assessing Officer was made pursuant to the appeal order dated March 7,1988, passed by the learned Commissioner of Income-tax (Appeals). The Income-tax Appellate Tribunal was, therefore, justified in stating that the same was not appealable as that would be a reiteration of the decision already taken by the learned Commissioner of Income-tax (Appeals). The learned Commissioner of Income-tax (Appeals) himself held that there cannot be any interference with the order of the Assessing Officer dated December 8, 1989, g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endent upon the fulfilment of the conditions prescribed in section 72 of the Act, namely:- "(i) the loss should be the 'net result of the computation under the head "Profits and gains of business or profession"' ; (ii) the loss is to the same assessee against whose business income it is sought to be set off; (iii) the business from which it has resulted is not speculation business; (iv) the loss could not be, or is not, wholly set off against income under any other head of income in accordance with the provisions of section 71, then, the entire, or so much of the, loss as has not been so set off- (a) shall be carried forward to the assessment year following; (b) it shall be set off against the profits and gains, if any, of any business or profession carried on by the assessee and assessable for that assessment year, (i.e., the assessment year following) if the business or profession for which the loss was originally computed continued to be carried on by the assessee in the previous year relevant to that assessment year ; and (c) if, against the income of such (following) assessment year, the loss is not capable of being wholly or partly set off due to insufficiency o ..... 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