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TMI Blog1984 (2) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... bed. The fact was not disputed before us by the learned departmental representative. But the return seems to have been misplaced. The ITO did not frame the assessment for the assessment year 1976-77 and the assessment has become barred by limitation. Although the assessee was not at fault for the situation and although the AAC had all the sympathy for the assessee, he found that the claim of the assessee to carry forward the loss and to set off the same cannot be allowed in view of section 80 of the Income-tax Act, 1961 ('the Act'). Aggrieved by the same, the assessee has now come up in appeal. 4. The grounds taken by the assessee are to the following effect. The assessee cannot be penalised and denied the benefits due to him under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply to the carry forward of depreciation under section 32(2). Section 80 cannot, therefore, stand in the way of the claim of the assessee for carry forward and set off of the unabsorbed depreciation. 6. Even if the claim of the assessee is to carry forward and set off the loss, the same cannot, in our view, be defeated by the failure on the part of the ITO to frame the assessment for the earlier assessment year. It will be highly inequitable to defeat the rights conferred on the assessee to have the loss carried forward for no fault of his. It is, therefore, necessary to give a reasonable interpretation to the provisions of section 80. The purpose of section 80, in our view, is not to debar the carrying forward of a loss which has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been computed in the earlier assessment year and if the same is not likely to be computed in the earlier assessment year as the assessment is barred by limitation, it should be open to the ITO doing the assessment for the subsequent year to determine the loss for the earlier assessment year and to allow the set off. This of course will be subject to the condition that the loss for the earlier assessment year can be determined only if the assessee had filed the return under section 139. As, in the present case, it is admitted that the assessee had filed a return under section 139, we would direct the ITO to determine the loss on the basis of the return and to allow set off of the same in the assessment year under appeal according to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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