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TMI Blog1987 (7) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... r ending31-8-1979. The return of income was filed on5-6-1981reflecting a loss of Rs. 22,540 and taking into account the unabsorbed losses brought forward from the earlier years, the total loss is said to have been shown at nil according to the assessment order. The learned ITO accepted the loss declared of Rs. 22,540, however, refused to carry forward the same, keeping in view the provision of law as contained in sec. 139(3) of the Income- tax Act, 1961. 3. The learned ITO s action was challenged by the assessee and it was argued before the learned CIT (A) by Shri S.C. Mehra, the learned authorised representative, that the return was valid u/s 139(4) and since in the assessment order the loss had duly been accepted by the learned ITO there was no reason to reject the claim of carrying forward. The reliance by the learned authorised representative was also placed on the decision of the Hon ble Supreme Court in the case of CIT v. Kulu Valley Transport Co. (P.) Ltd. [1970] 77 ITR 518. The mention before the first appellate authority was also made of the decision in the case of the Presidency Medical Centre (P.) Ltd. v. CIT [1977] 108 ITR 838 (Cal.). The learned CIT (A) vacated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hyderabad Bench of the Tribunal were that the assessee an individual filed his return on3-12-1979declaring business loss. The acknowledgement receipt No. 001345 was obtained from the Department in token of the receipt thereto. The assessee thereafter filed a revised return on31-3-1980under acknowledgement No. 002263. The learned ITO disallowed the claim, on the ground that the loss was not returned. The first appellate authority found that the assessee had produced proof regarding filing of the return as well as the revised return within the time allowed u/s 139(4) of the Act. In those circumstances, the first appellate authority, in the case of Ratanlal Bhangadia held that the assessee was entitled to claim for set off and allowed the appeal for both the years. On further appeal to the Tribunal, the assessee was found entitled to have the loss determined and to have it set off if the other conditions of set off were satisfied. Before the Hyderabad Bench of the Tribunal there was a return and a revised return against the receipts which were said to be within time u/s 139(4) of the Act. The facts before us are not the same. In the present case, there is only one return filed on5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The returns were filed even after the said extension. In the said case the notice u/s 22(2) of the old Act was also not served. The Hon ble Supreme Court in those circumstances found that a return submitted at any time before assessment is made is a valid return . According to the Hon ble Supreme Court a return whether it was return of income, profits and gains or of loss must be considered as having been made within the time prescribed if it was made within the time specified u/s 22(3) of the old Act. In other words, if sec. 22(3) of that Act was complied with sec. 22(l) of the Old Act must also be held to have been complied with. It was also observed that where two views are possible, one favourable to the citizen should be accepted while considering the provision of a taxing statute. 10. The Hon ble Supreme Court in the said case determined and decided the issue under the old Act. Therefore, the Hon ble Supreme Court had no occasion to anticipate and opine about the implementation of sub-sec. (3) of sec. 139 of the present Income-tax Act. The observation of the Hon ble Supreme Court appears to be that a return could be submitted at any time before assessment was made. A val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on the ratio in the case of Brij Mohan decided by their Lordships of the Supreme Court. The Hon ble Supreme Court in the said case held a return filed within the extended period is a good return in the sense that the ITO is bound to take it into consideration but nowhere does section 139 declare that where return is filed within the extended period it will be deemed to have been within the period originally prescribed by the statute. On the contrary, the section contains a provision for payment of interest where the return is filed beyond the prescribed date i.e. within the extended period. The return filed during the extended period, is not recorded by the statute, as filed within the time originally prescribed. 13. The ratio in this case clearly gives the impression that a return filed after the due date cannot be considered to have been filed by the due date. Thus, in the case before us the return filed on5-6-81cannot be considered to have been filed on30-6-80to enable the assessee to get the benefit of sub-see. (3) of sec. 139. In the light of the above discussions we are satisfied that the CIT(A) was not justified to interfere with a correct finding recorded by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in Brij Mohan s case were made in the context of levying penalty u/s 271(1)(c) and Supreme Court did not refer to its earlier decision in Kulu Valley Transport Co. (P.) Ltd. s case when the Supreme Court observed that nowhere does section 139 declare that where a return is filed within the extended period, it will be deemed to have filed within the period originally prescribed by the statute. On the contrary, the section contains a provision for payment of interest where the return is filed beyond the prescribed date even though within the extended period. That is evidence of the fact that the return filed during the extended period is not required by the statue as filed within the time originally prescribed . The Supreme Court was Thus not considering in Brij Mohan s case the question of validity of a loss return and carry forward of loss which it had considered in Kulu valley Transport Co. (P.) Ltd. s case. 4. For the above reasons I hold that the assessee was entitled to carry forward of loss though it had filed the return beyond the time allowed u/s 139(1) read with section 139(3). In view of importance of this legal controversy, I suggest that the matter be refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 139(4), it would be deemed to be in accordance with law and the loss shown in the return had to be determined and carried forward as a matter of course under section 72(1)/80 of the Act even though the return was not filed within the time provided by section 139(1). The Revenue appealed. 5. The learned Judicial Member, who wrote the leading order accepted the Revenue s objection and allowed its appeal. According to him, Kulu Valley Transport Co. (P.) Ltd. s case was not applicable here because that was a decision under the old Act and the Supreme Court could not have anticipated or interpreted the provision contained in section 139(3) of the new Act. Section 139(3) was based on peculiar circumstances. It dealt with a particular situation. It confers a right on the assessee if he satisfies some conditions. The Supreme Court did not say anywhere that an assessee would be entitled to the benefit of section 139(3) even if these conditions were not satisfied. The Supreme Court never said that section 139(3) had to be given the go-by . When it decided Kulu Valley Transport Co. (P.) Ltd. s case the new Act was not in existence at all. On the contrary (the learned Judicial Member h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember upheld the order of the Commissioner (A). 7. I have heard both Shri A.P. Srivastava, Departmental Representative and Shri R.K. Mehra, Authorised Representative of the assessee. The Departmental Representative referred to the grounds of appeal filed by the Revenue in this case. According to him in the light of the observations of the Supreme Court in Brij Mohan s case a belated return filed u/s 139(4) was not to be equated with a return, under section 139(1). For the assessee reliance was placed on the order of the learned Accountant Member. My attention was also invited to the decision of the Hyderabad Bench A of the Tribunal in Ratanlal Bhangadia s case. 8. I have considered the position. In Ratanlal Bhangadia s case the Tribunal made the following points: (i) The provisions of the 1961 Act are in pari materia with the provisions under the 1922 Act. The mere fact that section 139(8) was introduced in the 1961 Act for automatic levy of interest would not make all the difference in the conclusion of the Supreme Court so long as the material provisions for submission of returns or revised returns continued to be the same. (ii) Giving effect to the Supreme Court decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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