Delhi High Court
Commissioner Of Income Tax vs Shiv Shanker Homeo (P) Ltd. on 3 February, 2004
Author: B Patel
Bench: B Patel, B D Ahmed
JUDGMENT
B.C. Patel, C.J.
1. In this appeal, the question referred to the Court reads as under:-
"Whether on the facts and in the circumstances of the case, the ITAT was correct in law in allowing the company's claim of carry forward of losses determined on belated return?"
2. The facts are as under:-
The assessed filed a return on 28.03.1986 declaring loss of Rs2,71,620/- which included brought forward losses of Rs1,57,442/- for the assessment years 1985-1986. The assessment was computed on a total income of Rs20,640/-, but was reduced to nil as a result of the brought forward losses of the earlier years, namely, assessment years 1984-85. The Assessing Officer held that the assessed is not allowed carry forward losses for adjustment in the succeeding assessment years as the return was not filed within time as required under Section 80 of the Income Tax Act, 1961 (hereinafter referred to as 'the said Act'). Thus, in his view, he has allowed the loss of Rs20,640/- and refused to carry forward the balance of Rs.54,179/- for the next year. The assessed, being aggrieved by the assessment order, approached the CIT (Appeals). In view of the CIT (Appeals), assessed was entitled to carry forward the losses. In the opinion of the CIT (Appeals), these losses pertained to assessment years 1982-83 to 1984-85. They had to be carried forward under Section 72 of the said Act. The amendment made to Section 80 became effective from the assessment year 1985-86 onwards. This will not apply in respect of the assessment year preceding the assessment year 1985-86. The CIT (Appeals), thus, allowed the appeal of the assessed against which revenue preferred the appeal before the ITAT, which, while accepting the views taken by the CIT (Appeals) pointed out as under:-
"We are, however, inclined to accept the view taken by the CIT (Appeals) whereby it has been held that loss in question pertains to the assessment year prior to assessment year 1985-86 and to which the amendment made to Section 80 was not applicable and further depreciation was otherwise required to be carried forward under Section 32(2) of the Act."
3. The provisions of Section 80, after amendment and before amendment, are required to be considered. Section 80, before amendment referred to Section 139. However, subsequently, there is a specific reference to sub-section (1) of Section 139 only w.e.f. 01.04.1985 and keeping in view these aspects in mind, we are of the opinion that the Tribunal has not committed any error. The opening part of Section 80 makes it clear that after the loss is determined in pursuance of a return filed, then it will not apply. We may refer to the decision of the Supreme Court in the case of Commissioner of Income Tax, Punjab v. Kulu Valley Transport Co. P. Ltd: 77 ITR 518, wherein at page 527 it is pointed out as under:-
"In other words, when there is an express provision in that sub-section which must be availed of if the assessed is to be entitled to the benefit of carry forward of loss in any subsequent assessment can he take advantage of the provisions of Section 22(3) and claim that since he has filed a voluntary return before any assessment had been made and, if it be determined that he has suffered a loss, he is entitled to carry forward that loss."
In view of the statutory provision as existing at the relevant time, as the loss already stood determined, the amendment will have no effect.
4. In our view, therefore, in the facts and circumstances indicated above, our answer is that the ITAT was correct in law in allowing the assessed's claim of carrying forward of loss which already stood determined. The Reference is disposed of accordingly in favor of the assessed and against the revenue.
