1971 (10) TMI 11 - HC - Income Tax

Appealable order - return showing loss - filed beyond the time-limits such return cannot be ignored by the ITO order of ITO simply filing the return is therefore an Appealable one under section 30 of Indian Income-tax Act 1922

Summary

Issues:
Interpretation of section 22(2A) of the Indian Income-tax Act, 1922 regarding late filing of return showing loss. Appealability of the Income-tax Officer's order filing the return as out of time under section 30 of the Act.

Analysis:
The judgment pertains to a reference under section 66(t) of the Indian Income-tax Act, 1922, questioning the appealability of the Income-tax Officer's order filing a return showing loss as out of time. The assessee filed a return beyond the deadline, indicating a loss of Rs. 19,427-11-3. The Income-tax Officer's order implied a refusal to allow the assessee to carry forward the loss to the next year. The Appellate Assistant Commissioner and the Tribunal initially held that no appeal lay against this order, as it did not fall under section 30 of the Act. However, the High Court delved into the interpretation of section 22(2A) and the obligations of the Income-tax Officer as per the Supreme Court's ruling in Commissioner of Income-tax v. Kulu Valley Transport Co. P. Ltd.

The High Court emphasized that a return filed under section 22(2A) must be considered by the Income-tax Officer before assessment, even if filed late. The order in question, which seemingly dismissed the possibility of carrying forward the loss due to late filing, was deemed appealable. The Court highlighted that the Income-tax Officer's duty is to assess the loss, either accepting the full claim or determining it otherwise, even if the return is filed beyond the deadline. Failure to do so would enable the officer to circumvent the assessee's right to carry forward losses based on technicalities. The judgment underscored that the right to appeal should be based on the practical effect of the order on the assessee's rights, not just the formal language used by the officer.

In conclusion, the High Court ruled that the Income-tax Officer's order filing the return showing loss as out of time was indeed an appealable order under section 30 of the Act. The judgment aligns with the obligation of the officer to consider late-filed returns and make appropriate determinations regarding losses, ensuring that the assessee's rights are upheld. Both judges, BISHAMBAR DAYAL and R. J. BHAVE, concurred on this decision, emphasizing the importance of adhering to statutory provisions and protecting the assessee's entitlements.