TMI Blog1981 (2) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... 963, the ITO passed an order fixing the date of hearing on 13th September, 1963, but there was no entry in the order sheet of that date. But the ITO passed an entry in the order sheet to the effect " assessed at loss of Rs. 8,851 ". Subsequently, the ITO had reason to believe that the assessee had not disclosed the true and correct facts at the time of original assessment and as such income had escaped assessment. Hence, he reopened the assessment under s. 147 of the I.T. Act, 1961. He issued the notice under s. 148 of the I.T. Act, 1961, in response to which the assessee filed a return of income under protest. The assessee challenged the authority of the notice issued under s. 148 contending that the return for the assessment year 1959-60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was not in the traditional form in which the assessment orders were generally passed. Accordingly, it was held by him that the entry in the order sheet dated 31st October, 1963, computing the total income at a loss of Rs. 8,851 could not be accepted as the assessment order. It was further held that the computation of income made had to be followed by the determination of the tax payable as required by s. 23(3) of the Indian I.T. Act, 1922, and even if the income resulted in a loss the ITO had to determine the tax payable at " nil " and without such determination the assessment proceedings could not be considered as concluded. It was also held that where the assessment results in a loss it was incumbent on the ITO under s. 24(3) of the Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee that the entry in the order sheet could not be equated, or be synonymous, with an order of assessment. The judicial Member of the Tribunal found that the assessee had filed the return on 12th June, 1961, declaring a loss of Rs. 41,935. The ITO made an entry in the order sheet on 31st October, 1963, stating " assessed at a loss of Rs. 8,851." The computation sheet was not signed by the ITO, nor any demand notice was served on the assessee. The Tribunal on examining the provisions of ss. 139, 142, 143 and 147 of the I.T. Act, 1961, held that the ITO would have to pass an order, in writing, assessing the total income or loss of the assessee and determine the sum payable by him or refundable to him on the basis of such assessment. The co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be treated as a valid assessment order made by the ITO and once that could not be treated as an assessment order the subsequent proceedings taken by him under s. 147 could not also be sustained. Thus, the Tribunal dismissed the departmental appeal, On the above facts, the following questions of law are referred to this court under s. 256(1) of the I.T. Act, 1961, for its opinion : " 1. Whether, on the facts and circumstances of the case, the entry made in the order sheet on 31st October, 1963, assessing the loss at Rs. 8,851 can be treated as an order of assessment ? 2. Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the proceedings started under section 147 of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determination or ascertainment of loss. With reference to the assessment Form R-20 of the Indian I.T. Rules, 1922, he points out that there is a column for the computation of tax. But, there is no column as to the " loss " to be determined. In such a case, according to. Mr. Sengupta, the assessee cannot demand a notice under s. 29 of the Act of 1922. In this connection, reliance was placed on the decision of the Supreme Court in the case of K. C. Daga [1961] 42 ITR 177. In this case, it was contended that the loss which had been determined and ordered to be carried forward, must be deemed to have become final, because no appeal was filed against the determination. At p. 178 of the report, it is observed that the procedure laid down by s. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, he relies on the decision of the Supreme Court in the case of CIT v. Bidhu Bhusan Sarkar [1967] 63 ITR 278. As to the effect of return filed and any notice of reassessment, reference may be made to the decision of the Supreme Court in the case of CIT v. Ranchhoddas Karsondas [1959] 36 ITR 569. It is held therein that where in respect of any year a return has been voluntarily submitted before assessment, the ITO cannot choose to ignore the return and any notice of reassessment and a consequent assessment under s. 34 ignoring the return is invalid. Lastly, Mr. Sengupta draws our attention to the decision of this court in the case of Sun Engineering Works (P.) Ltd. v. CIT [1978] 111 ITR 166. it is laid down therein that in order to de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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