RANJITSING VIRK Vs. PRAMILA SRIVASTAV ITO

JUDGEMENT

(1.) THE petitioner was engaged in production of cinema feature films. The petitioner filed returns of losses in respect of the assessment years 1977 -78 up to 1982 -83. Pursuant to the said returns filed by the petitioner, in respect of the previous year ending on June 30, 1981, for the assessment year 1982 -83, the Income -tax Officer, after considering the said return, passed an order on March 29, 1985, assessing the income of the petitioner at Rs. 2,91,645. It is the case of the petitioner that in respect of the assessment year 1980 -81, the previous year which ended on June 30, 1979, notice under section 148 was issued on September, 30, 1981, and the same was received by the petitioner on October 15, 1981. Another notice under section 148 was issued on November 22, 1982, and the same was received by the petitioner on February 26, 1983. However, the petitioner filed his loss return declaring losses in respect of the assessment year 1980 -81 on March 30, 1983, i.e., within the time -limit allowed by section 139 of the Income -tax Act, 1961. Similarly, in respect of the assessment year 1981 -82, notice under section 148 was issued on November 22, 1982, and the said notice was received on February 26, 1983. The petitioner filed his loss return for the assessment year 1981 -82 on February 15, 1984, i.e., within the time prescribed under section 139(4). Against the income of Rs. 2,91,645 in respect of the assessment year 1982 -83, the petitioner claims, inter alia, determination of the petitioner's losses for the assessment years 1980 -81 and 1981 -82 after hearing the petitioner and on such determination to carry forward such losses and set off the same against the income assessed for the assessment year 1982 -83. The Department has rejected the petitioner's claim on the ground that once notice under section 148 is issued, the petitioner is not entitled to claim the benefit of carry forward of the above losses. The issue involved in this petition is covered by a large number of various decisions of the various courts. In the case of Kareemsons Pvt. Ltd. v. CIT : [1992]198ITR543(KAR) , the Full Bench of the Karnataka High Court, after considering section 139(4) in the context of sections 80 (as it then stood), 139(4) and 148 of the Income -tax Act, 1961, has held that the right given to the assessee under section 139(4) cannot be lost merely because the Revenue instituted proceedings under section 147 in the meanwhile. In the present case, we have seen from the record that the petitioner filed returns indicating losses well within the time prescribed under section 139(4). It is contended on behalf of the respondents that the petitioner filed his returns under section 139(4) after issuance of notice under section 148 and in the circumstances, the petitioner was not entitled to apply for carry forward of the losses. We do not find any merit in the said contention. The right given to the assessee under section 139(4) cannot be lost merely because the Revenue instituted proceedings under section 147 of the Income -tax Act. In the above circumstances, the petitioner was entitled in respect of the assessment years 1980 -81 and 1981 -82 to apply to the Income -tax Department for determination of the losses and on such determination to carry forward such losses and set off.

(2.) IN respect of the petitioner's claim for determination of the losses for the assessment year 1979 -80, the Income -tax Officer by his order dated March 29, 1985, determined the loss at Rs. 23,691 but there was no order to carry forward the loss. The petitioner preferred an appeal to the Assistant Commissioner which was dismissed. The petitioner did not pursue the matter further. The petitioner did not prefer further appeal which was available to him in law and, therefore, the order of the Income -tax Officer has attained finality in respect of the assessment year 1979 -80. In the circumstances, it is not possible to disturb the order passed by the Income -tax Officer in respect of the assessment year 1979 -80.