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TMI Blog1974 (8) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Indian Income-tax Act, 1922, or under section 72 of the Income-tax Act, 1961 ? " The short facts relevant for the disposal of the points at issue may, be stated thus. On the 8th of October, 1965, the assessee filed returns of income for all the four years in question. These returns were followed by revised returns which were filed by the assessee on the 6th of March, 1967, before the Income-tax Officer. In both these sets of returns for all these years the assessee had declared heavy losses said, to have been suffered by it. The Income-tax Officer did not issue any notice under section 22(2) of the Indian Income-tax Act, 1922 (hereinafter referred to as "the Act"), in respect of the first three years nor any such notice under section 139(2) of the 1961 Act in respect of the year 1962-63. On the 10th of January, 1967, the Income-tax Officer asked for an explanation from the assessee for the late filing of the return. The explanation was duly furnished and reasons given by the assessee on the 20th of January, 1967. The assessee, at no point of time, applied for extension of time for filing the returns nor did the Income-tax Officer permit the assessee to file the returns be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rward had been made by the Income-tax Officer apparently in view of the provisions contained in section 139(3) of the 1961 Act. The communication could not, therefore, be construed as one in respect of which an appeal was provided for in section 246 of the 1961 Act. The Tribunal, for a further reason that the Income-tax Officer had not applied his mind judicially to the returns and had merely not entertained the returns filed by the assessee, held that such an order could not be held to be appealable either under the Act or under the 1961 Act. At the instance of the assessee these references have been made by the Tribunal. Mr. V. D. Narayan, learned counsel for the assessee, urged that the Income-tax Officer's communication of his decision that " the losses for these years would not be carried forward for being set off against the income of subsequent years " must in law be held to be computation of loss at nil under section 24(2) of the Act. In other words, it was contended, the Income-tax Officer had held that there was no loss in the years in question which could entitle the assessee to have such a loss set off or carried forward to the subsequent year. Such an order or commun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in the case of Commissioner of Income-tax v. Kulu Valley Transport Co. P. Ltd., at page 529 : " The Income-tax Officer could not have ignored the return and had to determine those losses. Section 24(2) confers the benefit of losses being set off and carried forward and there is no provision in section 22 under which losses have to be determined for the purpose of section 24(2)." The rejection of the return thus disentitling an assessee to carrying forward of the loss to a subsequent year and the computation of such a loss at all under section 24(2) of the Act cannot, in my view, be distinguishable on any principle of law, for all that the assessing officer in both the cases does is to deprive the assessee of the benefit of set-off or carrying forward of the loss, which has been conferred under section 24(2) of the Act. In my opinion, therefore, when the Income-tax Officer has given out his mind and communicated the same to the assessee in the terms that the losses for these years would not be carried forward for being set off he must be deemed to have computed the loss at " nil ", thus depriving the assessee of the benefit of section 24(2) of the Act or section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered an item of income for assessment as his, the Income-tax Officer came to the conclusion that it was the Hindu undivided family that was liable to be assessed on that income and not the assessee. It was a conclusion, whether it was right or wrong, that he had jurisdiction to reach ; and once he reached that conclusion, he could not tax the assessee ". Adopting, with respect the same line of reasoning I reiterate that, after setting out the reason as to why the Income-tax Officer in the instant cases was not taking any action on the returns, he has further communicated an order that the losses for these years would not be carried forward which, in the circumstances of the case, must amount to saying that the assessee had no losses during these years, which could entitle him to a set-off or carrying forward of the same in the subsequent years. To the same effect is another Bench decision of the Madras High Court in V. S. Sivalingam Chettiar v. Commissioner of Income-tax ; so also in the case of Commissioner of Income-tax v. Onkarmal Meghraj, the Supreme Court construed the words " no assessment " as having determined the assessable income of the assessee in question at nil. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that it was merely a disinclination to entertain the return. Be that as it may, the decision of the Delhi High Court in Jodha Mal's case on principle, I say so with great respect to the learned judges, does not seem to be correct. As the ratio of that case is, on principle, against the decision of the Supreme Court in the three cases of Esthuri, Onkarmal Meghraj and Kulu Valley Transport Company mentioned above, I would very respectfully take a view different from that taken by the Delhi High Court. The first question referred to us, therefore, must be answered in the negative and I would hold that, on the facts and in the circumstances of the petitioner's case, the Tribunal was not legally correct in dismissing the petitioner's appeal and in holding that the order of the Income-tax Officer was not appealable to the Appellate Assistant Commissioner under section 30 of the Indian Income-tax Act, 1922, or section 246 of the Income-tax Act, 1961. So far as the second question referred to us is concerned, it cannot be said to be a question of law arising out of the Tribunal's order. This point was never raised before the Tribunal nor was it the subject-matter of consideration by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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