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TMI Blog1986 (7) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... filed on 15-12-1982 was being treated as having been filed in response to the notice under section 148 and, therefore, the loss assessed at Rs. 66,100 was denied to be carried forward to the subsequent years by observing that the assessee had failed to file the return within the statutory limit. 4. The appeal of the assessee also failed before the AAC. Observing that there being no evidence on record with the assessee to show that return was originally filed under section 139(1), the AAC held that no return was filed under section 139 and that the return filed was only in response to the notice under section 148. In rejecting the claim of the assessee he observed that proceedings by issue of notice under section 148 are undertaken only in a case where income has escaped assessment and it is not a case where the assessee should derive advantage of getting itself the benefit of carry forward loss assessed which it did not claim by filing a return under section 139. 5. The assessee is in appeal before us. The learned counsel of the assessee Shri Pandit stated before us that he is not able to substantiate the contention of the assessee that the return was originally filed under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l such further extended time as allowed by the ITO, if he claims the loss to be carried forward. Sub-section (4) gives another right to an assessee, who has not filed the return under sub-section (1) or (2), to file the return before the assessment is made at any time within two years from the end of the assessment year to which the return relates. In the present case, the return was filed on 15-12-1982. It was before the assessment was made and also within two years from the end of the assessment year 1980-81. Therefore, it could be held that it was a return filed under section 139 and the loss determined was in pursuance of such return had to be carried forward and set off as per the provisions of the Act. The non obstante provision of section 80 of the Act does not come in the way of the assessee. The provisions of section 139(3) would also not affect the right of the assessee by virtue of the Bombay High Court decision in the case of Telster Advertising (P.) Ltd. v. CIT [1979] 116 ITR 610. It was held in that decision that a return filed under section 139(4) has to be treated a return as if it was a return under sub-section (1) and, therefore, the assessee would be entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall serve a notice under this section containing all or any of the requirements which may be included in a notice under section 139(2) and that the provisions of the Act, shall so far as may be, apply accordingly as if the notice under section 148 were a notice issued under section 139(2). This clearly shows what follows in pursuance of a notice under section 139(2) should also follow in pursuance of a notice under section 148. Even if the return is treated in pursuance of the notice under section 148, it is to be deemed a return in pursuance of notice under section 139(2) and consequently the loss computed under these proceedings shall be deemed to loss determined in pursuance of a return filed under section 139(2). We are supported on this view of the matter by a Special Bench decision of the Tribunal in the case of Bela Singh Pabla v. ITO [1982] 1 ITD 370 (Delhi). Paras 18 and 19 of the order which are material for the purposes of this decision are extracted below : "But even the provisions of section 148 are not self-contained. That section postulates that a notice containing all or any of the requirements, which may be included in a notice under sub-section (2) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly proper but also necessary to assume all those facts on which alone the fiction can operate. In this connection, reference may be made to the decision of the Supreme Court in CIT v. S. Teja Singh [1959] 35 ITR 408 and in particular to the following oft-quoted observations of Lord Asquith in East India Dwellings Co. Ltd. v. Finsbury Borough Council [1952] AC 109 quoted therein : 'If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it... The statute says that you must imagine a certain state of affairs : it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.' Thus, where section 148 introduces the fiction that the notice issued under that section is to be deemed to be a notice under section 139(2), the logical consequence, when the section does not say that the other provisions of the Act shall be deemed to apply, is that the other provisions apply in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 85,510 which was not allowed to him in the original assessment should be allowed in reassessment. In view of these facts, the High Court has held that provisions of section 34(1)(a) of the Indian Income-tax Act, 1922 were not intended for the benefit of the assessee but for the benefit of the revenue. In this view of the matter, the reduction of loss by Rs. 31,149 was held justified and the High Court refused to allow the set of Rs. 85,510 claimed by the assessee as it amounted to determine the entire assessment afresh. A contention in this case was raised by the assessee to the effect that in such like a case it should have been held that proceedings under section 34 could not be taken and should have been dropped. Since this question was not referred by the Tribunal, the High Court refused to answer the same. Thus, this was a case where already a return had been filed and the return filed in pursuance of section 34 was a return after the first assessment was made and further the question of validity of proceedings was left upon and not gone into. 13. The next case relied upon of the Mysore High Court is S. Natarajan's case. In this case, the facts were almost similar to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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