Kerala H.C : Whether, on the facts and in the circumstances of the case, the assessee is entitled to carry forward the loss determined by the ITO ?

Counsel Appeared

P.K. Ravindranatha Menon & N.R.K. Nair, for the Revenue

K.S. PARIPOORNAN, J.:

The Revenue is the petitioner. The respondent is an assessee to income-tax. For the year 1976-77, he filed a return showing a loss of Rs. 18,550. Though the fact of loss was accepted with slight variations, the ITO refused to carry forward the loss on the ground that the return was not filed under s. 139(1) of the IT Act. This was upheld in appeal. In second appeal, the Tribunal held that the return had to be considered as one filed under s. 139(4) of the Act. The Tribunal relied on the decision of the Bombay High Court in Telster Advertising (P) Ltd.’s case (1979) 8 CTR (Bom) 114: (1979) 116 ITR 610 (Bom). The Bombay High Court has followed the decision of the Supreme Court in CIT vs. Kulu Valley Transport Co. (P) Ltd. (1970) 77 ITR 518 (SC). It was one rendered under the Indian IT Act, 1922. The Revenue filed an application under s. 256(1) of the IT Act to refer two questions of law which arose out of the decision of the Tribunal. It was declined. Thereupon this original petition was filed by the Revenue, praying that this Court may be pleased to direct the Tribunal to refer the two questions of law formulated in paragraph 7 of the original petition for the decision of this Court. They are as follows :

” 1. Whether, on the facts and in the circumstances of the case, the assessee is entitled to carry forward the loss determined by the ITO ?

2. Whether, on the facts and in the circumstances of the case and on an interpretation of the relevant provisions of the statute, the Tribunal is right in holding that ‘the return must be taken to have been filed under s. 139(4)’ ?”

2. We heard counsel for the Revenue, Mr. Menon. The decision in CIT vs. Kulu Valley Transport Co. (P) Ltd.’s case (supra) rendered by the Supreme Court, as also the other decisions, which have followed the said case, requires a fresh appraisal, in view of the provisions contained in s. 139(1) r/w s. 139(4) of the IT Act. We should state that the provisions of the Indian IT Act, 1922, ss. 22 and 23, were far different from the provisions contained in the 1961 Act. In the circumstances, we are satisfied that the questions of law formulated by the Revenue in paragraph 7 of the original petition (quoted above) do arise out of the order of the Tribunal. Accordingly, we direct the Tribunal to refer the above-mentioned two questions of law for the decision of this Court.

3. The original petition is allowed.

[Citation : 174 ITR 256]