COMMISSIONER OF INCOME TAX COCHIN Vs. INDO MARINE AGENCIES KERALA PVT LTD
LAWS(KER)-2003-2-49
HIGH COURT OF KERALA
Decided on February 19,2003

Commissioner Of Income Tax Cochin Appellant
VERSUS
Indo Marine Agencies Kerala Pvt Ltd Respondents

JUDGEMENT

S.SANKARASUBBAN, J. - (1.) THESE references are at the instance of the Revenue and the assessee questions of law referred to are as follows : '1. Was the Tribunal justified in law in holding that the assessment was validly reopened under Clause (c) of Expln. 2 to Section 147 of the IT Act in the circumstances of the case ? (By the assessee)
(2.) WAS the Tribunal justified in the circumstances of the case that the profit on sale of capital asset is to be reckoned in computing the book profit under Section 115J of the IT Act, 1961 ? (By the assessee) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee is entitled to set off of the amount of loss or the amount of depreciation whichever is less in respect of past years against the profits of the year ending on 30th Sept., 1987 relevant to the asst. yr. 1988 -89 ? (By the Revenue)
(3.) WHETHER , on the facts and in the circumstances of the case and the Circular of the Board being in accordance with the relevant principles of laws having bearing on the issue, should not the Tribunal have confirmed the assessment without restoring the case ? (By the Revenue)' 2. The facts of the case are as follows : The assessee is a private limited company with previous year ending on 30th Sept., 1987 in relation to the asst. yr. 1988 -89. The assessee did not file the return of income under Section 139(1) nor did it file the return of income within the time allowed pursuant to a notice issued under Section 139(2) dt. 16th Sept., 1988. The assessee also did not comply with the notice issued under Section 142(1). However, the AO closed the proceedings as follows : 'Return of income not yet filed. There is no taxable income from 1984 -85 onwards. Assessment may be closed as NA for statistical purposes'. 3. On 15th March, 1990, the assessee filed a return disclosing a loss of Rs. 59,02,550 whereupon the AO issued notice under Section 148 and completed the assessment under Section 143(3) on 16th July, 1992 applying the provisions of Section 115J of the IT Act and determined the income at Rs. 6,10,000. In arriving at the assessable profit under Section 115J, the AO deducted the loss or depreciation to be set off under Section 205(1)(b) of the Companies Act in a sum of Rs. 5,18,387. On appeal, the CIT(A) upheld the reassessment proceedings and also the computation of profit under Section 115J as made by the AO. The assessee filed second appeal before the Tribunal. The Tribunal found that the order -sheet entry 'NA' passed by the AO would amount to an assessment order and non -communication of it to the assessee cannot invalidate such an order. 4. So far as the first question is concerned, we agree with the Tribunal. Inspite of the issue of the notice under Section 139(2) dt. 16th Sept., 1988 and the notice issued under Section 142(1) dt. 8th March, 1989, the assessee did not furnish the return and did not comply with the terms of the notices. Such default on the part of the assessee should lead to an assessment under Section 144. The relevant entry is as follows : 'Return of income not yet filed. There is no taxable income from 1984 -85 onwards. Assessment may be closed as NA for statistical purposes'.;


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