Commissioner of Income Tax vs Tulsi Govinda Baruah

Baruah, J.—The following question has been referred by the Tribunal at the instance of the revenue u/s 256(1) of the income tax Act, 1961 (''the Act"):

"Whether, on the facts and in the circumstances of the case, the Tribunal did not err on facts as well as in law in upholding the order of the Commissioner (Appeals) who allowed carry forward of loss even though he not file his return of income within the time allowed u/s 139(3)?"

For the assessment year 1984-85, the assessee filed return on 6-2-1986 showing a loss of Rs. 3,08,350. The Assessing Officer completed the assessment and mentioned that the assessee had come to claim the set off of loss of the earlier year amounting to Rs. 5,09,710. He found that for the earlier two years returns were not filed within the time allowed u/s 139(1) of the Act and there was no extension of time for filing of the returns for those years. He, therefore, concluded that there was no question of setting off of loss of earlier years in this year in view of the provisions of sections 139(1) and 80 of the Act. The income assessed during the year was of Rs. 2,24,030.

The assessee being aggrieved preferred an appeal before the Commissioner (Appeals) claiming for setting off of loss of earlier years against this year''s income. The Commissioner (Appeals) allowed the claim of the assessee.

Being aggrieved, the revenue preferred an appeal before the Tribunal. However, the Tribunal declined to interfere. Hence, the present reference.

It has been submitted by the learned counsel for the parties that this case is covered by the decision of this Court in the case of Gujarat Housing Board Vs. Navnirman Mazoor Bandhkam Sahakari Mandli Ltd., . In the said case this Court held that the loss could be carried forward in the subsequent year and answered the reference in the affirmative and against the revenue. Following the decision in the case of K.C. Bezbaruah (supra) we answer the reference in the affirmative and against the revenue.