income Tax Officer Vs. JinvIn Builders (P) Ltd. - Court Judgment

Excerpt:

.....same was rejected by the ao and the matter was further carried before the cit(a) who allowed the claim of the assessee appreciating the following facts.the assessee incurred loss for the asst. yrs. 1991-92 and 1992-93. the assessee filed the return in due time and, therefore, the losses were assessed and carried forward for future set off. assessee did not file the return for the asst. yr. 1993-94 because the assessee was having no taxable income. subsequently, when the assessee had income, the assessee filed the return of income for 1994-95 in due time and, therefore, the claim of the assessee was established during the asst.yrs. 1991-92 and 1992-93 and merely because the assessee did not file the return when the assessee was not duty-bound to file the return in the subsequent year due to the loss, the right of the assessee to set off, when the assessee had earned taxable income cannot be lost or forfeited.3. aggrieved by the above order of the cit(a) the revenue is in appeal before the tribunal. sec. 80 of the it act, 1961, states that "notwithstanding anything contained in this chapter, no loss which has not been determined in pursuance of a return filed in accordance with.....

Judgment:

1. This appeal by the Revenue is for the asst. yr. 1994-95 directed against the order of the learned CIT(A) directing the AO to allow carry forward of loss and set off.

2. The case of the Revenue is that the assessee failed to file the return for the asst. yr. 1993-94 and, therefore, the assessee forfeited the right to carry forward the loss and set off. Against the order of the AO for the asst. yr. 1994-95 the assessee approached by way of 154 and the same was rejected by the AO and the matter was further carried before the CIT(A) who allowed the claim of the assessee appreciating the following facts.

The assessee incurred loss for the asst. yrs. 1991-92 and 1992-93. The assessee filed the return in due time and, therefore, the losses were assessed and carried forward for future set off. Assessee did not file the return for the asst. yr. 1993-94 because the assessee was having no taxable income. Subsequently, when the assessee had income, the assessee filed the return of income for 1994-95 in due time and, therefore, the claim of the assessee was established during the asst.

yrs. 1991-92 and 1992-93 and merely because the assessee did not file the return when the assessee was not duty-bound to file the return in the subsequent year due to the loss, the right of the assessee to set off, when the assessee had earned taxable income cannot be lost or forfeited.

3. Aggrieved by the above order of the CIT(A) the Revenue is in appeal before the Tribunal. Sec. 80 of the IT Act, 1961, states that "Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub-S. (3) of s. 139, shall be carried forward and set off under sub-s. (1) of s. 72 or sub-s. (2) of s. 73 or sub-s. (1) or sub-s. (3) of s. 74 or sub-s. (3) of s. 74A". The section does not say that the assessee should file the return in due time during all the intervening years also. In the instant case the assessee filed the return in due time when the loss was incurred and the loss was determined in pursuance to the return filed in accordance with the provisions of sub-s. (3) of s. 139. In view of the clear provision, I am of the view that the right of carry forward and set off cannot be denied to the assessee. The assessee filed the return under s. 139(1) for the asst. yr. 1994-95 to claim the carry forward and set off. It was also determined as a consequence of the return during the asst. yr.

1991-92. Failure of the assessee, in the intervening years to file the return, as there was no taxable income, will not deprive the assessee the benefit extended under the section. The order of the CIT(A) stands confirmed.