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TMI Blog1984 (7) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the order of the ITO regarding this claim, the assessee filed an appeal before the Commissioner (Appeals). For the assessment year 1975-76, the assessee had filed a return in April 1975, showing a loss of Rs. 21,957. The ITO, by his order dated12-3-1976, computed the income at nil. Against this, the assessee filed an appeal and the AAC was of the view that the ITO had not considered the details of expenses and had not discussed as to which expenses were allowable and which were not. He also found that the question of allowing managing director's remuneration had to be considered in the context of the legitimate business needs of the company. Similarly, the extent of advertisement expenses was also to be determined. The AAC, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case, the Commissioner (Appeals) should have directed the set off of the loss as per return filed by the assessee. It was submitted that the assessee having filed the return in time, its claim cannot be disallowed due to inaction on the part of the department. It was also contended that the question of set off can arise, only when the profit accrues, and as there was profit in this year, the assessee has raised this question and this claim could not be denied in view of the return filed in time. It was also contended that the benefit contemplated under section 72(1) of the Act cannot be withheld by relying on the provisions of section 80. Reliance was placed on the observations made by the Bombay High Court in the case of All India Groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as more than two years have passed after the end of the financial year when the set aside order was passed. The Commissioner (Appeals) has realised the hardship caused to the assessee but has expressed his helplessness, as the law provides for the setting off of loss determined in the case of the assessee. 7. I am of the view that mere appreciation of the assessee's hardship cannot provide relief to the assessee, though it is legally due to him. The loss has to be determined as per directions of the AAC and whatever loss is finally determined has to be carried forward and set off against the income of this year. The plea for time bar should not be taken by the department as the provision for limitation is for the taxpayer and the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is deprived of his right which the law has given to him under sub-section (2) of section 24. In other words the department wants to benefit from and wants to take advantage of its own default. It is an elementary principle of law that no person, we take it that the income-tax department is included in that definition, can put forward his own default in defence to a right asserted by the other party. A person cannot say that the party claiming the right is deprived of that right because 'I have committed a default and the right is lost because of that default'." It is true that the above observations have been made in respect of a case under the Indian Income-tax Act, 1922, but the basic legal principle remains. It is also true that se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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