Decided on October 23,1992



R.V. Easwar, Judicial Member - (1.) THIS appeal has been filed by the revenue. The following grounds have been raised: 1. That, on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) had erred in admitting the appeal when the appellant could not be said to be aggrieved in terms of Clause (c) of Sub-section (1) of Section 246.
(2.) That, without prejudice to ground No. 1 the learned Commissioner of Income-tax (Appeals) erred in directing the Income-tax Officer to carry forward the loss determined for the assessment year 1984-85. 2. The accounting year of the assessee ended on 30-6-1983. The due date for filing the return was 30-6-1984. However, the return of income was furnished only on 23-12-1985. In the meantime, there had been a search under Section 132 of the IT Act on 23-9-1985 and certain books of accounts and documents had been seized. The assessee had requested for extension of time to file the return. Notice under Section 139(2) had also been issued according to which the assessee should have filed the return on or before 27-1-1985. The return of income filed on 23-12-1985 disclosed a loss of Rs. 2,71, 190. The assessment was completed originally on 31-3-1986 on a total income of Rs. 9,260. This was a positive figure. There was an appeal to the first appellate authority who passed an order on 19-2-1987 granting certain reliefs. Consequently, the Assessing Officer passed an order on 27-10-1987 purporting to give effect to the appellate order. This order was passed under Section 143(3) read with Section 251 of the Act. The loss was computed at Rs. 2,31,185. At the end of the order, the following note was made by the Assessing Officer: Loss, not to be carried forward considering that the return was not filed under Section 139(1) or within the time allowed under Section 139(2). The assessee objected to the refusal to carry forward the loss by preferring an appeal to the CIT (Appeals). The CIT (Appeals) took the view that because of the search and the seizure of the books of accounts, the assessee was prevented by sufficient cause from filing the return within the time allowed under Section 139(1) or 139(2) and that the assessee's difficulties in filing the return had been brought to the notice of the Assessing Officer. He, therefore, found that the return filed on 23-12-1985 was a valid return which had to be taken into account for the purpose of carry forward of the loss. Following the decision of the Calcutta High Court in Presidency Medical Centre (P.) Ltd. v. CIT [1977] 108 ITR 838 he directed the ITO to carry forward the loss to the subsequent years.
(3.) THE revenue is in appeal to contend that the appeal to the CIT (Appeals) was incompetent. It was pointed out that the assessee cannot be stated to be "aggrieved" by the decision of the ITO that the loss will not be carried forward. It was further submitted that under Section 246(1)(c) of the Act the assessee can file an appeal only where he objects to the "amount of loss computed" and not against the refusal of the ITO to carry forward the loss to the subsequent years. It was further pointed out that it was not the assessee's grievance that the loss computed by the ITO was not correct. It was, therefore, submitted that the CIT (Appeals) should have dismissed the appeal as incompetent.;

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