HMT BEARINGS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS writ petition is directed against the judgment and order of the CIT, Andhra Pradesh I, Hyderabad, on a revision petition filed by the petitioner under S. 264 of the IT Act. The facts leading upto the present stage, as found recorded in the orders of the authorities under the Act, are as follows :

(2.) AGAINST the assessment order dt. 16th June, 1984, in so far as it rejected the petitioner's plea to carry forward the loss, the petitioner filed a revision under S. 264 of the Act, before the CIT. Two contentions were urged by the petitioner before the Commissioner, viz., (1) that, having accepted the return in pursuance of the order dt. 9th July, 1981 (under S. 146) and having further treated the said return as having been filed under S. 139(4), the ITO was in error in not allowing the loss to be carried forward; his view is contrary to law; and (ii) that, in this case, a return was in fact filed in September, 1979 which is established by the material placed before the Commissioner, and, hence, the refusal to allow the petitioner to carry forward the loss is not sustainable in law.

(3.) HAVING entertained the revision, the Commissioner issued a notice to the petitioner under S. 263 of the Act to show cause why the order of the ITO in so far as it allowed the petitioner to carry forward the unabsorbed depreciation, should not be revised. The petitioner filed its objections, after considering which the proposed action under S. 263 was dropped. The Commissioner then took up the petitioner's revision and dismissed the same by his order dt. 22nd May, 1986, impugned herein. The Commissioner rejected the petitioner's contention that a return was in fact filed in September, 1979. He referred to various circumstances, and, in particular, to the petitioner's own applications and representations, militating against the said plea. So far as the question of law is concerned, the Commissioner was of the opinion that inasmuch as "the return filed by the assessee on 18th April, 1981 was no return at all, and as there was in fact not return filed by the assessee under S. 139, any loss determined by the ITO on the basis of such return cannot be carried forward and set off in the assessments for the following years". He observed : "where the two year period, as referred to above [reference is to Sub -S. (4) of S. 139] has expired but the assessment is open having been reopened under S. 146, the assessee will have no right to file the return. In the case of the assessee, the return was in fact filed on 18th April, 1981, i.e., after the expiry of two years from the end of the relevant assessment year. Therefore, the return actually filed could not be regarded as a valid return although the statements furnished alongwith the return of the income or loss disclosed in the return, could be taken into consideration by the ITO for determining the income or loss in the assessment made....". The above findings of the Commissioner on both the above questions are challenged in this writ petition.