9911796707
TMI Blog1995 (5) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the return of loss filed for the assessment years 1985-86 and 1986-87 are valid in law so as to be eligible for carrying forward of loss to subsequent years for the purpose of set off of such losses against profits of subsequent years or not. In other words, whether the returns of loss filed for these years have become non est in terms of section 139(10) of the IT Act, 1961 or not. 2. The assessee filed return of loss (date has not been specified anywhere in the assessment order or the appellate order) admitting loss of Rs. 3,26,499 for the assessment year 1985-86. The Assessing Officer computed the business loss under section 143(3) at Rs. 2,86,260 and declared the assessment as'N.A'. He has also specified that ' The loss will not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer intimated the petitioner that under the provisions of section 139(10) of the Act the returns are deemed never to have been filed and the same are lodged. " 5. On merits it has been contended by the assessee that the provisions of section 139(10) of the Act were inserted with effect from 1-4-1989 and are effective from the assessment year 1989-90 and does not apply to earlier assessment years. Therefore, the return should be deemed to have been filed within the time extended under section 139 of the Act and the assessment proceedings taken in the normal course and the loss carried over from the assessment year 1986-87 for purpose of set off. 6. The CIT (Appeals) held that the provisions of section 139(10) were inserted by the Taxation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said proof has been already furnished before the CIT (Appeals) at the time of appellate hearing and, therefore, he prayed that the appellate order be rectified permitting the carry forward of loss. A copy of such letter dated 19-4-1989 has been filed before us for record and he confirmed at the time of hearing that the CIT (Appeals) has not carried out the rectification sought for by the appellant. The learned counsel for the assessee referred to the decision of the Karnataka High Court in the case of Sirigeri Kanakappa Shetty & Sons v. Dy. CIT[1992] 198 ITR 711 for the limited purpose that attention was focussed on the Board's Circular No. 469 dated 23-9-1986. According to the head note the circular categorically says, ' further keepi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. At the threshold we would like to refer to the controversy raised regarding the statement contained in para 2 of the appellate order for the assessment year 1986-87. In our opinion, it is the statement of the CIT (Appeals) rather than recording of the arguments of the learned counsel for the assessee. In any case, nothing turns on statement and, therefore, we proceed to consider the merits of the case. 10. As regards the assessment year 1985-86 inasmuch as the assessee is categorically stating that proof has been already furnished before the CIT (Appeals) at the time of appellate hearing regarding filing of Form No. 6 on 24-6-1985 seeking extension of time up to 31-12-1985 and the matter is still pending with him it is open to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade in the prescribed manner, the Income-tax Officer may in his discretion allow " by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986 with effect from 1-4-1987. Therefore, Circular No. 469 dated 23-9-1986 categorically stated that keeping in view that the new sub-section (3) comes into force with effect from 1-4-1987, a return of loss filed for the assessment year 1986-87 or earlier years within the prescribed period as per existing provisions will not be denied the benefit of carry forward of loss. 12. In the instant case there is evidence to show that the assessee has been applying for extension of time from time to time as observed by the CIT (Appeals) in para 2 of his appellate order for the assessment year 1986-87 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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