INCOME TAX OFFICER Vs. A V APTE
INCOME TAX APPELLATE TRIBUNAL
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V. Balasubramanian, Vice President -
(1.) THE assessee is a builder, promoter and a film distributor. For the assessment year under appeal, no return was filed by him till end of the assessment year. No notice under Section 139(2) of the Income-tax Act, 1961 ('the Act'), was also served on him. Subsequent to the end of the financial year on 28-7-1979, believing that the income of the assessee has escaped assessment, the ITO served a notice under Section 148 of the Act, on the assessee. A return was filed by the assessee on 8-8-1979 returning a loss of Rs. 4,94,379. THE ITO went into the details of the case and issued a draft order computing a loss of Rs. 1,13,610 and since the addition involved exceeded more than a lakh of rupees, the IAC's order under Section 144B of the Act was obtained. THE IAC directed the ITO to drop the proceedings started under Section 148 in the absence of any finding of escapement of income. THE ITO passed an order on 8-7-1980 which read as under :
THE proceeding initiated by issue of the notice under Section 148 of the IT Act, 1961 on 23-7-1979, are hereby dropped as the income chargeable to tax has not escaped the assessment.
Issue notice of demand accordingly.
(2.) Pursuant to the direction of the IAC, thus the ITO passed the alleged assessment order dropping the proceedings since no income chargeable to tax had escaped assessment. He issued a demand notice also to the assessee in consonance with the assessment order.
The assessee appealed to the Commissioner (Appeals), inter alia, raising the following grounds :
Grounds of appeal
1. That the appellant is not liable to submit return under Section 139(1) as he has suffered heavy losses during the year under consideration and hence, the action under Section 147 is not called for and is without jurisdiction.
2. That even in the earlier years, the appellant has suffered heavy losses and the losses available with him for carry forward and set off against current income were more than Rs. 4,00,000.
3. That the ITO has no specific information to believe that the appellant has earned any taxable income and hence, the action of the ITO is without jurisdiction and bad in law.
(3.) THE appellant has submitted the return not in response to notice under Section 148 but, has submitted the return under Section 139(4).
1. That the learned ITO is not justified in initiating the proceedings under Section 147 and issuing the notice under Section 148 of IT Act, 1961. Under the facts and circumstances of the case, the action of the learned ITO is not justified and is bad in law and therefore, the proceedings initiated under Section 147 read with Section 148 may please be dropped.
2. That the learned ITO is not justified in taking away the rights given to appellant under Section 139(4).
3. That the learned ITO is not justified in dropping the action on the return submitted by the appellant under Section 139(4).
Under the facts and circumstances of the case, appellant pays, that the return submitted by him may please be treated as return submitted by him under Section 139(4) and prays that, the loss as declared in the return may please be determined and be allowed to be carried forward to set-off against future income.
4. THE appellant prays to leave, add, alter or amend the grounds of appeal as and when occasion demands.;
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