2001 PLP 3219 (PTD)

C.V. Rajan for the Commissioner. N.V. BALASUBRAMANIAN, J.‑‑‑The questions of law relating to assessment of income for the assessment year 1979‑80 for the opinion of this Court at the instance of the assessee are as follows: "(1) Whether the Appellate Tribunal was right in law and had sufficient material to hold that the applicant would not be entitled to claim the carry forward and set off of the loss as per the return filed for the assessment year 1978‑79? (2) Whether, on the facts and in the circumstances, the Tribunal was right in holding that the entry made by the Income‑tax Officer in the order sheet for the assessment year 1978‑79 would not amount to a computation and determination of the loss as per the return filed in view of the decision of the Supreme Court in Esthuri Aswathiah v. ITO (1961) 41 ITR 539?" The assessee filed its return of income for the assessment year 1979‑80 on March 31, 1982, claiming adjustment of the loss for the assessment year 1978‑

79. The Income‑tax Officer rejected the claim of the assessee holding that such an assessment was not made for that year and the assessee's claim for adjustment of carry forward of loss of Rs.75,711 cannot be allowed. It is seen that the return for the assessment year 1978‑79 was filed belatedly by the assessee on March 31, 1982, and the Income‑tax Officer, mentioned in the order sheet as follows: "Please see volume, return, dated March 31, 1982, admitting loss of Rs.71,831 received and filed. The assessee has filed the return belatedly. Hence, the return may be lodged." On the basis of the above remarks, the Income‑tax Officer, came to the conclusion that the time limit for completion of the assessment for the assessment year 1978‑79 would expire within two years from .the end of the assessment year and since the assessee filed the return beyond the expiry date for completion of assessment, the assessee's claim for adjustment of loss of the assessment year 1978‑79 could not be considered. Aggrieved, the assessee filed an appeal before the Commissioner of Income‑tax (Appeals), as his claim for adjustment of carry‑forward of loss of Rs.75,711 was not allowed. The Commissioner of Income‑tax (Appeals) also has held that as the return for the assessment year 1978‑79 filed by the assessee was beyond the statutory period of assessment, the Income‑tax Officer was precluded from proceeding with the assessment under section 143 of the Income Tax Act, 1961 (in short "the Act"). According to him, since no loss was determined in pursuance of the return filed under section 139 of the Act, the loss could not be carried forward. The assessee took up the matter on appeal to the Appellate Tribunal. The .Appellate Tribunal concurred with the views of the Commissioner of Income‑tax (Appeals) and dismissed the appeal preferred by the assessee. It is the order 4f the Appellate Tribunal that is the subject‑matter of reference before us and the two questions of law set out earlier have been referred to u5 for our consideration. We hold that the view of the Tribunal that the loss for the assessment year 1978‑79 could not be carried forward is correct in law. Admittedly, the return for the assessment year 1978‑79 was filed by the assessee only on March 31, 1982. Under section 153 of the Act, inter alia, an order of assessment could be made within two years from the end of the assessment year in which the income becomes assessable and the assessee filed its return for the assessment year 1978‑79 beyond the time limit prescribed under section 153(I) of the Act and the same cannot be regarded as a valid return. Since the return filed by the assessee was not a valid return. It is not incumbent on the part of the Income‑tax Officer to determine the loss of the assessee under section 143(3) of the Act. It follows that when there was no determination of loss as contemplated under the Act. It is nor open to the assessee to claim that the loss should be carried forward and adjusted against the income of the next year. We hold that the Income‑tax Officer has merely recorded that the return for the assessee for the assessment year 1978‑79 was lodged and he has not chosen to determine the loss as provided under section 143 of the Act. Therefore, it is neither permissible nor possible for the assessee to claim that the loss should be carried forward to be set off against the income of the subsequent assessment year. The apex Court in CIT v. Dalmia Cement (Bharat) Ltd. (1995) 216 ITR 79, has considered the question arising under the provisions of the Indian Income‑tax Act, 1922, and after noticing the relevant provisions of law that were prevalent, the Supreme Court held that the controversy, which arose under the 1922 Act, would not arise under the Income Tax Act, 1961, and that the Income‑tax Officer under section 143 of the Act has to determine not only the profits/income taxable, but also to determine the loss if there is one. Under the Income Tax Act, 1961, the assessee is entitled to, and ought to, question the amount of loss determined in an appeal preferred against the assessment order itself. The Supreme Court has further observed that the assessee need not wait till he receives' the intimation under section 157 of the Act and the assessee could have very well‑preferred an appeal against the assessment. It is pertinent to note that the decision of this Court in CIT v. Dalmia Cement (Bharat) Ltd. (1976) 104 ITR 337, was reversed by the Supreme Court in CIT v. Dalmia Cement (Bharat) Ltd. (1995) 216 ITR

79. In the instant case, admittedly, the assessee had not preferred an appeal against the order lodging the return for the assessment year 1978‑79 and that order has become final. The assessee, therefore, cannot claim that it is entitled to claim that loss should be carried and adjusted against the income of the assessment year 1979‑80 in the assessment proceedings for 1979‑

80. We, therefore, hold that the order of the Appellate Tribunal does not suffer from any infirmity, and we answer both the questions of law referred to us in the affirmative and against the assessee. However, there will be no order as to costs. M.B.A./313/FC Order accordingly