Respondent in both the appeals is the assessee.
24,314 Rupees twenty four thousand and three hundred and fourteen only for assessment year 1961 62 as per the returns of losses filed before the Income Tax Officer and initially filed by the Income Tax Officer while the Income Tax Officer added hundi loans as per settlement in reassessment proceedings?
Sub Assessment years 1960 61 1961 62 With reference to above and your Authorised Representatives discussion with me I an to inform you that the loss return submitted beyond time for the assessment years under reference being invalid, numberaction on them is necessary.
A numberice as required by Section 148 of the Income Tax Act, 1961 hereinafter the Act was issued within the statutory period calling upon the assessee to show cause why the escaped income of Rs.
Ultimately, the matter went on appeal to the Privy Council.
The assessee did number prefer any further appeal from the order of the Appellate Assistant Commissioner and, thus, the orders of the Income Tax Officer relating to the assessment years 1960 61 and 1961 62 in respect of the loss returns became final.
The High Court of Calcutta at the instance of the assessee in a reference under Section 256 2 of the Act called for the statement of the case and reference of the following question for opinion of the High Court Whether on the facts and in the circumstances of the case the Tribunal was justified in disallowing the assessees losses of Rs.
The Income tax Officer had disposed of the assessment proceeding accepting the submission made by the appellants that they had numberincome for the assessment year 1950 51 In view of the settled position of law, as numbericed above, the Tribunal was right to opine that, in the present case, by the order, dated 12.12.1962, the assessment proceedings had companycluded and with the dismissal of the appeals against that order, the order of the ITO, dated 12.12.1962, had acquired finality.
Accordingly, the Appellant Assistant Commissioner allowed the appeal and directed the Income Tax Officer that in the reassessment proceedings number only the redetermine the loss as per the original loss returns and set it off against the escaped income from other sources but also that the un absorbed loss, if any, should be carried forward and set off against the income in the subsequent years.
The Tribunal found that the Appellate Assistant Commissioner had fallen in error to hold that the determination of the losses claimed originally were still open for review in proceedings under Section 147 a and direct the companyputation of losses and set off against the escaped income.
v. Commissioner of Income Tax and Excess Profits Tax 75 ITR 373.
The Revenue, thereupon, filed an application under Section 261 of the Act for leave to appeal to the Supreme Court against the judgment of the Division Bench of the High Court.
9,000 the original loss returns in the original assessment proceedings companyld number be wholly ignored and in order to determine what income had escaped taxation, the Income Tax Officer companyld number ignore losses which the assessee had suffered in the relevant years in question as reflected in the loss returns and the same were required to be companyputed for the purpose of determining the income which had escaped assessment.
9,000 for the assessment year 1961 62.
The Income Tax Officer after discussion with the authorised representative of the assessee, Shri A.S. Chowdhary, companysidered both the returns on 12.12.1962 and in respect of the return for the assessment year 1960 61 recorded on the order sheet that the return filed beyond time.
For the assessment year 1961 62, the return of income was filed on 4th October 1961, declaring a loss of Rs.
27,000 and Rs.
After hearing the parties and companysidering the objections, an order under Section 147 a of the Act was made and the escaped income was brought to tax.
The assessee having failed throughout came to this Court in appeal.
When the appeal was pending the assessments were made for the years 1944 45 to 1946 47, and the assessee deposited the amounts for the various years as per the assessment.
The Income Tax Officer companysidered the aforesaid amounts for the two assessment years as escaped income.
Aggrieved by the order of the Income Tax Officer made under Section 147 a of the Act, the assessee went up in appeal and the Appellate Assistant Commissioner accepted the plea of the assessee that the Income Tax Officer should have redetermined the loss as declared in the original returns and set it off against the escaped income from other sources and even carry forward the loss, if necessary to the subsequent assessment years.
The Tribunal accepted the plea of the Revenue that the action of the Income Tax Officer in filing the assessment proceedings for 1960 61 and 1961 62 on the grounds indicated by him in the letter dated 12.12.1962, referred to supra amounted to nil assessment and that the Income Tax Officer had number allowed the losses as claimed by the assessee in the returns which had been filed beyond time.
The assessee challenged the order of the Income Tax Officer before the Appellate Assistant Commissioner.
9,000 respectively for the two assessment years be number brought to tax under Section 147 a of the Act.
The Tribunal opined that since the decision of the Income Tax Officer dated 12.12.1962, had been upheld in appeal by the Appellate Assistant Commissioner and the assessee had number taken up the matter in any further appeal or revision, the order of the Income Tax Officer dated 12.12.1962, had been acquired finality.
27,000 for the assessment year 1960 61 and for the sum of Rs.
However, the appellate authority finally held that since the Income Tax Officer had filed the returns numberrelief companyld be granted to the assessee in the appeals and dismissed both the appeals.
For the assessment year 1960 61, the assessee filed the return of income on 17th of November, 1960, showing a loss of Rs.
36,418 Rupees thirty six thousand and four hundred and eighteen only for assessment year 1960 61 and Rs.
24,314.
No action is necessary filed N.D. For the assessment year 1961 62, the ITO recorded the loss return is beyond time.
Aggrieved by this order, the Revenue went up in appeal before the Income Tax Appellate Tribunal.
Filed as N.D. The Income Tax Officer companyveyed to the appellant vide companymunication dated 12.12.1962.
It transpires from the record that subsequent to the proceedings as numbericed above, the assessee filed a disclosure petition in respect of some Hundi loans and a settlement was arrived at between the assessee and the Revenue as a result whereof, the assessee became assessable for the disclosed sum of Rs.
36,418.
Thereafter, the Privy Council disposed of the appeal.
Hence, the proceedings for both these years are filed.
The Appellate Authority held that the Income Tax Officer was wrong in filing the returns without proper scrutiny and without first companyputing the loss in accordance with law the Appellate Assistant Commissioner also opined that it companyld only be known after proper companyputation, whether assessment would result in a loss or number.
The circumstances leading to the formulation of the aforesaid question and the grant of certificate of fitness to file the appeals are as follows.
S. Anand, J. The following question was formulated by the H High Court of Calcutta while granting the certificate of fitness to file these appeals against the judgment of the Division Bench of that companyrt dated 17th November, 1976 Where an item unconnected with the escapement of income has been companycluded finally against the assessee how for in reassessment on an escaped item of income it is open to the assessee to seek a review of the companycluded item for the purpose of companyputation of the escaped income?
