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TMI Blog1982 (10) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us relates to the decision of the Commissioner (Appeals) to direct the ITO to carry forward of losses for the assessment years 1970-71 to 1973-74 and to give effect to the same for the assessment years under appeal. For the sake of convenience, we set out below the particulars as are relevant to the controversy before us. --------------------------------------------------------------------------------------------------------------------------------------------------- Asst. Date of Income/loss Income of Earlier years' year return returned the year losses c/fd. as shown in return -------------------------------------------------------------------------------------------------------------------------------------------------- 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l before the Commissioner (Appeals) and strenuously contended that the assessee was a consumer co-operative society which came into existence in January 1963 in accordance with the policy decision taken by the Government to promote and develop co-operative consumer stores. By its very nature, the assessee-society supplied goods to the community at large at competitive prices on a reasonable profit basis resulting in substantial losses for the earlier years. The assessee, however, was required to file return for the year 1977-78 for the first time by a notice under section 139(2) on 22-7-1977. Thereafter, notices under section 148 for the assessment years under appeal followed requiring the assessee to file returns for these years. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra, the Commissioner (Appeals) held that the assessee was entitled to the benefit of carry forward of past losses against its income determined for the years under appeal. 3. The revenue being aggrieved is in appeal before us. Shri Sathe, the learned departmental representative, submitted at the outset that the returns for the years 1970-71 to 1973-74 which were filed beyond time were non est in law. Therefore, the claim for carry forward of losses was not tenable. Secondly, section 80 of the Act provides that an assessee would be entitled to set off and carry forward such losses as are determined by the ITO in pursuance to the returns filed by it. Returns have to be filed in accordance with the provisions contained in section 139(3) or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be set out. Secondly, the assessee was not aware of its claim for recognition of losses. It was only when a notice under section 148 was issued by the ITO that the assessee put forward its claim. Shri Patil, therefore, tried to draw a distinction between the losses which are claimed in pursuant to the returns filed voluntarily and setting off of those losses in course of regular assessment under section 143(3) of the Act, and the claim of setting off of losses when action under section 148 was taken. In other words, Shri Patil's submission was that but for the action taken under section 148 by the ITO, there was no obligation on the part of the assessee to file the returns for the years under appeal. It was only when that obligation to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect to. These provisions which came into being under the 1961 Act were not incorporated in the 1922 Act. Therefore, there was no obligation on the part of the ITO to quantify the loss on the basis of the return filed by the assessee and direct the same to be carried forward. It was in this context that the decision of the Madras High Court was rendered and the facts in that case also show that the returns of losses were filed in time. They were, therefore, valid returns and not returns not non est in law as is in the present case. The artificial distinction sought to be placed between the proceedings under section 148 and the regular proceedings pursuant to return filed under section 139(1) or notice under section 139(2) is clearly misplac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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