GUJARAT PETROSYNTHESE LTD. Vs. P.L. RUNGTA

JUDGEMENT

(1.) PETITIONER No. 1 herein, a limited company, has challenged the action of the respondent authorities, more particularly order dt. 31st Dec, 1992 made by respondent No. 1 under Section 264 of the IT Act, 1961 (the Act), and intimations dt. 8th July, 1992 under Section 143(1)(a) of the Act issued by respondent No. 2, and orders dt. 22nd Sept., 1992 under Section 154 of the Act made by respondent No. 2.

(2.) THE assessment years in question are 1990 -91 and 1991 -92. It is the case of the petitioner that respondent No. 2, by making disallowance of carried forward unabsorbed depreciation and unabsorbed investment allowance relatable to asst. yrs. 1988 -89 and 1989 -90 by way of prima facie adjustment under Section 143(1)(a) of the Act for the two years under consideration, has acted without jurisdiction and contrary to the provisions of the Act. That the returns which were filed on 20th Dec, 1990 and 30th Dec, 1991 respectively for the two assessment years claiming set off of unabsorbed depreciation and unabsorbed investment allowance have been disallowed in purported exercise of powers under Section 143(1)(a) of the Act vide two intimations dt. 8th July, 1992.

(3.) THE case of the petitioner in brief is that by virtue of operation of Section 115J of the Act carried forward unabsorbed depreciation and unabsorbed investment allowance for earlier assessment years cannot be treated to be available only to the extent such amounts remain to be set off in the regular assessment made under Section 143(3) of the said two assessment years, namely, 1988 -89 and 1989 -90. That in fact the petitioner is entitled to have entire unabsorbed depreciation and unabsorbed investment allowance treated as not having been set off of in the earlier two assessment years and was entitled to carry forward and set off the entire amount of such unabsorbed depreciation and unabsorbed investment allowance. It was further submitted that, in any event, under Section 143(1)(a) of the Act what was permissible was accept the return and either raise a demand as per the said return or grant refund on the basis of such return. That the only exception was available in the proviso to Section 143(1)(a) of the Act which permits adjustment of arithmetical errors in the return, accounts or documents accompanying the return; allowance of any loss carried forward, deduction, allowance or relief which is not claimed in the return but which, on the basis of information available in such return, accounts or documents, is prima facie admissible; and disallowance of any loss carried forward, etc. which is similarly prima facie inadmissible. That in the present case the respondent authorities had committed error in law in placing reliance on the circular of CBDT for the purposes of coming to the conclusion that carried forward unabsorbed depreciation and unabsorbed investment allowance had to be restricted to the extent the said amount was not considered while computing minimum alternate tax (MAT) under Section 115J of the Act. That in any event the issue was highly debatable and could not have been considered to be prima facie inadmissible. In support of the submissions made the learned advocate for the petitioner has placed reliance on the following decisions: