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TMI Blog1993 (10) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 139(10) were not attracted. The revenue is in appeal against the impugned order. 3. For assessment year 1988-89, the due date for furnishing the return was 31-7-1988 whereas it was actually filed on 1-2-1989. The return declared loss of Rs. 66,62,817. The Assessing Officer, again, held that the return was non est and infructuous in view of the provisions contained in section 139(10) of the Act. The learned CIT(A) confirmed the action of the Assessing Officer because the assessee had not filed any application seeking extension of time. The loss return was held to be invalid and the assessee's appeal was dismissed. The assessee is in further appeal before us for this year. 4. Shri P.C. Jain, the learned Counsel for the assessee submitted that holding of a return as non est and not allowing the carry forward of losses were two different things. Referring to the language of section 139(10), it was submitted that only those returns which showed the total income below the maximum amount which was not chargeable to tax had to be deemed never to have been furnished. It was emphasised that these returns did not embrace in their ambit the loss returns but only those returns showing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the working given by the learned Counsel for the assessee, the depreciation allowable was of the order of Rs. 1,10,48,346 which was more than Rs. 66,62,817. It was, therefore, submitted that the Assessing Officer was required under the law to deal with the return and then dispose of the question of carry forward of loss as per the provisions of law. But he could not simply declare the return as invalid or non est. 7. The learned departmental representative submitted that so far as the assessment year 1987-88 was concerned, the power to grant extension of time in respect of loss returns had been withdrawn by the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986 w.e.f. 1-4-1987 and as such the Assessing Officer was not empowered to grant any extension of time in respect of such cases. He, therefore, found fault with the reasoning of the learned CIT(A) that the return filed was within time. As regards the assessment year 1988-89, it was submitted that the provisions of section 139(10) were clear and unambiguous, and that all returns showing income below the maximum amount of income not chargeable to tax including loss returns were covered by the said provision. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Member decision in the case of Weston Leasing Finance (P.) Ltd. We have very carefully gone through the said decisions. The legal position it appears was not properly brought before the Tribunal in the case of Ampee Industries (P.) Ltd. There is no discussion about the exception contained in proviso (d) to section 139(10) though a reference is available to the proviso (c) to section 139(10). In that case, the facts were that there was a loss return showing loss of Rs. 18,280 and the return had been filed on 10-1-1989 i.e., after 31-7-1988. The Assessing Officer completed the assessment under section 143(3) on positive income of Rs. 9,03,720. In that case, it was the assessee who took up the plea that since the loss return had been filed late it ought to be treated as non est by the Assessing Officer and hence the Assessing Officer could not have made an assessment under section 143(3) that he did. The Tribunal, however, negatived this plea of the assessee and came to the conclusion that the return was valid and had been properly dealt with by the Assessing Officer. The Tribunal, however, has not given any weight as to why the loss return should be excluded from the purview of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions) Act, 1986 w.e.f. 1-4-1987. 11. It is significant to note that section 139(10) starts with a non obstante expression. This section is "notwithstanding anything contained in any other provisions" of this Act. The loss returns filed even before 31st July would have been excluded from the purview of this section but the Legislature carved out an exception and in keeping with the provisions of section 139(3) enacted proviso (d) to section 139(10). There is, therefore, a close relation between section 139(3) and proviso (d) to section 139(10). This also makes the intention of the Legislature very clear. When the law says that a particular legal fiction will be created, that fiction has to be given effect to and the Courts cannot ignore that fiction. The Supreme Court in the case of Maharaj Kumar Kamal Singh also lays down the samething. There is no question of any interpretation of Board's circular or the rules. The law itself is contained in section 139(10) is very clear and if the main provisions contained in that section and the proviso are read harmoniously, it becomes absolutely clear that all returns below the taxable income limit whether positive or negative, have to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were filed beyond 31st day of July, these had to be treated as non est. We hold accordingly. 16. This would mean that for assessment year 1988-89 the return declaring loss of Rs. 66,62,817 was an invalid return which did not exist in the eyes of law and had, therefore, been correctly ignored by the Assessing Officer. We accordingly uphold the order of the first appellate authority for assessment year 1988-89. 17. As regards the assessment year 1987-88, we do not agree with the reasoning of the learned CIT(A) that the return had to be treated as valid and legal because it was filed within the time allowed. As mentioned earlier the power to grant extension of time in the cases of loss returns by the Assessing Officer was withdrawn by the Amendment of section 139(10) by the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986 w.e.f. 1-4-1987. In that view of the matter, the Assessing Officer had no authority or power to extend the time upto 30-9-1987 and the power exercised by him was beyond jurisdiction. We, therefore, do not accept the reasoning of the learned CIT(A) that the loss return for assessment year 1987-88 had been filed in time and hence the return could not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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