TMI Blog1992 (12) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax under section 263 of the Act in respect of the assessment year 1977-78 ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in holding that the assessment order passed by the Income-tax Officer setting off the speculation loss of Rs. 1,53,199 out of the total speculation loss of Rs. 7,25,607 determined in respect of the assessment year 1974-75 against the speculation profits for the assessment year 1977-78 was erroneous and prejudicial to the interests of the Revenue within the meaning of section 263 of the Act ? " Shortly stated, the facts as found by the Tribunal are that the assessee is an individual. The income-tax Officer, while making the assessment u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue. The Commissioner of Income-tax held that, in view of the provisions of section 80, the loss which was not determined in pursuance of a return filed under section 139 could not be carried forward and set off against the profit for the subsequent year. He, therefore, rejected the assessee's contention, revised the assessment and directed the Income-tax Officer to withdraw the benefit of carry forward loss of Rs. 1,53,199 given in the original assessment and enhanced the total income by that amount. The assessee preferred a second appeal before the Tribunal. It was contended on behalf of the assessee before the Tribunal that there is no difference between a return filed under section 139(2) and that filed under section 148. A reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as contended that, by issue of a notice under section 148, the Revenue cannot take away the right of the assessee to file a return under section 139. It was, therefore, submitted that the return filed by the assessee should have been treated as a return filed under section 139(4) and the benefit of carry forward of loss should have been allowed. It was thus strongly submitted that the order of the Income-tax Officer was not erroneous and prejudicial to the interests of the Revenue. It was, however, contended on behalf of the Revenue that the provisions of section 139(2) and those of section 148 are not in pari materia. It was urged that notice under section 148 is issued only in the case of escapement of income either by reason of the omiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submission of learned counsel for the assessee that the assessee was entitled to the benefit of carry forward of loss even if he filed a loss return under section 148. Section 80 of the Income-tax Act, 1961, laid down the essential condition to be fulfilled for obtaining the benefit of carry forward of loss. This section reads as under: '80. 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 sub-section (2) of section 73 or sub-section (1) of section 74 or sub-section (3) of section 74A'." It is, therefore, clear from the language of the section itself that, if a person de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling upon the assessee to file the return. This aspect is not brought out in the statement of case. To our mind, this is an all-important factor for deciding the issue before us. If the assessee was not given an opportunity of filing the return under sub-section (4) of section 139, it should not be fair to say that the assessee should be deprived of the benefit of determination of the loss for the purpose of carry forward and set-off in later years. In similar circumstances, it has been held by this court in Burdwan Wholesale Consumers' Co-operative Society Ltd. v. CIT [1991] 191 ITR 570, that the chance issue of a notice under section 148 even while the time for filing a voluntary return was still running, cannot abridge the assessee's st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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