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TMI Blog2006 (6) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... 30, 1983. The Assessing Officer passed an order on file refusing to extend time for filing the return. However, the refusal of extension of time sought by the assessee by way of its application was not conveyed to the assessee. The assessee had claimed to allow it to carry forward the assessed loss. Proceeding on the footing that the time to file the return was extended up to August 31, 1983, the assessee filed its return of income for the year ending on June 30, 1983, on July 30, 1984, disclosing the loss of Rs. 2,50,310. The return of income was supported with audited statements of profit and loss accounts and the balance-sheet. The assessee had claimed to allow it to carry forward the assessed loss. Since the Assessing Officer did not allow to carry forward the loss on the ground that the return was filed late, the assessee, being aggrieved by the same, preferred an appeal before the Commissioner of Income-tax (Appeals), who directed the Assessing Officer to allow the carry forward of the assessed loss since the refusal for extension of time was not conveyed to the assessee. The Commissioner of Income-tax (Appeals) relied upon the case of CIT v. Gordhanbhai Jethabhai [1983] 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an application made in the prescribed manner. In CIT v. Gordhanbhai Jethabhai [1983] 142 ITR 84 (Guj), referred to above, it has been observed that it is incumbent upon the Income-tax Officer, as empowered by section 139(1) proviso, to take a decision on the application for extension of time for filing the return and to communicate the decision to the assessee concerned. In the instant case, the Income-tax Officer had taken a conscious decision and rejected the application for extension of time. However, he had failed to communicate the rejection to the assessee concerned. In other words, he, having exercised the jurisdiction vested in him under the proviso to section 139(1) of the Income-tax Act, 1961, had failed to communicate to the assessee that the said discretion had been exercised against it. What is the effect of such non-communication is to be seen and determined herein. The principles of natural justice are, by now, fully evolved and expounded by a catena of decisions. The importance of the rule of natural justice is not only to secure justice, but to prevent the miscarriage of justice. Admittedly, they do not supplant the law of the land, but supplement it. These pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a suit against the State of Punjab alleging that the impugned order whereby he was dismissed was invalid, inoperative and illegal since it had been passed without holding any inquiry or following proper procedure. He further claimed a declaration that despite the said order of dismissal, he continued to be an employee of the State of Punjab and to hold his post as Assistant Director, Civil Supplies. The trial court dismissed the suit of the respondent and, thereafter, the matter went up to the Supreme Court. The relevant discussion is in paragraph 11 of the judgment, which is reproduced hereinbelow: "The first question which has been raised before us by Mr. Bishan Narain is that though the respondent came to know about the order of his dismissal for the first time on the May 28, 1951, the said order must be deemed to have taken effect as from the June 3, 1949, when it was actually passed. The High Court has rejected this contention; but Mr. Bishan Narain contends that the view taken by the High Court is erroneous in law. We are not impressed by Mr. Bishan Narain's argument. It is plain that the mere passing of an order of dismissal would not be effective unless it is published a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficulties would arise if it is held that an officer who is actually working and holding charge of his office, can be said to be effectively removed from his office by the mere passing of an order by the appropriate authority. In our opinion, therefore, the High Court was plainly right in holding that the order of dismissal passed against the respondent on the June 3, 1949, could not be said to have taken effect until the respondent came to know about it on May 28, 1951." Although this case pertains to dismissal from service, the principles of law laid down therein will be applicable to the present case as well. A Constitution Bench of the Supreme Court has held in the case of Bachhittar Singh v. State of Punjab, AIR 1963 SC 395, which was also a case of departmental inquiry, that the two essential ingredients of an order of the State Government are that: (1) the order has to be expressed in the name of the Governor and (2) then it has to be communicated. The relevant portion of the said reported decision is reproduced hereinbelow (headnote): "Before something amounts to an order of the State Government two things are necessary. The order has to be expressed in the name of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as nothing to the contrary had been communicated to it. The failure to communicate the order of rejection of the application for extension of time made by the assessee had precluded it from taking any effective steps or remedial measures in the direction of filing the return of income within time, which, may have been done, had such order been communicated. Therefore, it can safely be said that such non-communication of the factum of rejection of the assessee's application was prejudicial to the assessee and neither just nor reasonable. On the basis of an ineffective order refusing to extend time to file the return, the claim of the assessee to allow it to carry forward the assessed loss could not have been denied on the ground that the return of income was filed late. In view of the above discussion and the principles laid down by the Supreme Court in the abovequoted decisions, this court is of the opinion that the Appellate Tribunal was right in law and on facts in directing the Assessing Officer to allow carry forward of the assessed loss even though the return was filed late, in view of the specific provisions of section 80 of the Income-tax Act, 1961. The reference, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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