2019 (8) TMI 241 - HC - Income Tax

Non-filing of a return under sections 139(1) or 139(2) - weather unabsorbed depreciation cannot be claimed in a proceeding u/s 148 - HELD THAT - Non-filing of a return under sections 139(1) or 139(2) of the said Act was not involved. Neither is there any ratio in favour of the assessee in HARYANA HOTELS LTD. 2005 (2) TMI 63 - PUNJAB AND HARYANA HIGH COURT . This passage from the judgment can in no way be taken to be a statement of a legal proposition that on failure to file a return under section 139(1) and 139(2) of the said Act, the claim of unabsorbed depreciation can be entertained in a section 148 proceeding. More importantly, we are bound by the said Division Bench judgment of our Court. We strongly resent the wastage of precious time of this Court by Mr. Bhaumik by trying to whip up a dead horse. All the questions referred to in this reference application are answered in favour of the revenue and against the assessee.

Summary

Issues: Interpretation of the legal point regarding claiming unabsorbed depreciation in a proceeding under section 148 of the Income Tax Act, 1961.

Analysis:
The High Court of Calcutta, comprising Judges I. P. Mukerji and Md. Nizamuddin, addressed the legal issue of claiming unabsorbed depreciation in a section 148 proceeding. The Court referred to a Division Bench judgment in Koppind Pvt. Ltd. v. Commissioner of Income Tax, which established that unabsorbed depreciation cannot be claimed when no return has been filed under section 139(1) or 139(2) of the Income Tax Act. Despite this clear precedent, the applicant's counsel, Mr. Bhaumik, attempted to prolong the argument by citing irrelevant judgments from the Supreme Court and the Punjab and Haryana High Court. The Court emphasized that the Supreme Court case did not address the effect of non-filing of returns under sections 139(1) or 139(2), and the Punjab and Haryana case did not favor the assessee. The Court highlighted that a specific sentence from the Punjab and Haryana judgment did not support the claim for unabsorbed depreciation without filing returns under the specified sections. Ultimately, the Court reiterated its adherence to the Division Bench judgment of the Court.

The Court expressed strong disapproval of the applicant's counsel for wasting the Court's time by pursuing a futile argument. The Court unequivocally stated that all questions raised in the reference application were resolved in favor of the revenue and against the assessee. Consequently, the reference application was disposed of without any interference with the tribunal's order. The judgment emphasized the importance of respecting established legal precedents and avoiding unnecessary litigation that does not contribute to the resolution of the legal issue at hand.