Commissioner of Income Tax vs Sakthi Sivam Theatres (P.) Ltd.

R. Jayasimha Babu, J.—The question referred to us for consideration, at the instance of the Revenue is, ""whether, on the facts and in the

circumstances of the case, the Appellate Tribunal was correct in law in holding that the assessee is entitled to carry forward of business loss ?"" The

assessment year is 1984-85.

Section 80 of the Act, as it stood in that assessment year, reads as follows :

Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed u/s 139, shall be carried

forward and set off under Sub-section (1) of Section 72 or Sub-section (2) of Section 73 or Sub-section (1) of Section 74 or Sub-section (3) of

Section 74A.

It is undisputed that the assessee did file the return before the expiry of the period specified in Section 139(4) for this assessment year, although

that return was filed after the assessee had been called upon to file the return and after the assessee''s request for extending the period for filing the

return had been rejected. The return having been filed u/s 139, the Commissioner rightly reversed the order of the Assessing Officer, who had held

that the loss shown in the return that was filed could not be taken note of for the purpose of carry forward, as the return had not been filed within

the time prescribed u/s 139(1) and the time for filing that return had not been extended by the Income Tax Officer. The Commissioner again rightly

pointed out that the substitution of the words ""within the time allowed under Sub-section (1) of Section 139 or within such further time as may be

allowed by the Income Tax Officer"" for the words ""under Section 139"" effected by the Taxation Laws (Amendment) Act, 1984, with effect from

April 1, 1985, did not have the effect of altering the law for the period prior thereto.

The Tribunal thereafter having affirmed the order of the Commissioner, the reference has been made at the instance of the Revenue.

We are unable to appreciate the conduct of the Revenue in seeking reference in a matter where the answer is plain and unambiguous and

ascertain-able from a bare reading of the statutory provision. The return having been admittedly filed u/s 139(4) of the Act, as noticed by the

Commissioner, and when the return satisfies the requirements of Section 80 as it stood at the relevant time which only provides that a return should

have been filed u/s 139, the reference is required to be and is answered in favour of the assessee and against the Revenue. The Revenue shall pay

the costs in the sum of Rs. 2,000 to the assessee.