Pathak, J. - (1.) THE petitioner, a private limited company, filed a return of its income for the assessment year 1965-66. THE return was drawn up on the basis that the income of the previous year relevant to the assessment year 1965-66 was Rs. 3,79,889 and after setting off the aggregate of the losses carried over from the preceding years totalling Rs. 3,32,477 the net taxable income was Rs. 47,412. On the basis of the return, the petitioner paid a sum of Rs. 23,705 as self-assessed tax under Section 140A of the Income-tax Act, 1961.
(2.) ON August 21, 1965, the Income-tax Officer, A-Ward, Aligarh, served a notice upon the petitioner stating : "Kindly refer to your returned income at Rs. 47,412. The income at this figure has been returned by you after claiming loss of Rs. 3,32,477 for which no details have been filed. A perusal of this office records revealed that the position of determined loss and returned profits and losses was as under : JUDGEMENT_437_ITR72_1969Html1.htm For the assessment year 1964-65 you have disclosed a loss Rs. 31,912. Hence your total loss comes to Rs. 95,219 as against Rs. 3,32,4 claimed by you. It may further be seen that in the assessment year : the previous year relevant to the assessment year 1961-62 you ha claimed litigation expenses of Rs. 51,698 without any details about the admissibility. Further, Rs. 4,198 for property income deducted in Part IV of the return for the assessment year 1961-62 have not separately been shown the return as property income, Depreciation of Rs. 1,230 claimed in oil mill set has not been added in Part IV of the return for 1961-62, Hence, if this debit of Rs. 51,698, Rs. 4,198 and Rs. 1,230 are deducted from the loss, the allowable loss remains at Rs. 38,093. You are, therefore, requested to explain the computation Rs. 3,32,477." The petitioner submitted a reply explaining how the figure Rs. 3,32,477 was arrived at. The relevant extract from the reply is out hereunder: JUDGEMENT_437_ITR72_1969Html2.htm The Income-tax Officer did not accept the case of the petitioner and provisionally assessed the tax under Section 141 on the basis indicated in his notice.
(3.) THE petitioner challenges the notice of demand by the instant petition for certiorari. THE petition came on for hearing before one of us sitting as a single judge and, as important questions of law were involved, the case was referred to a larger Bench, It has now been placed before us. Section 141 of the Act provides for provisional assessment of tax payable by the assessee. The provisional assessment is to be made after the receipt of a return made under Section 139. The provisional assessment is to be in a summary manner and on the basis of the assessee's return and the accounts and documents, if any, accompanying it. In making such assessment, the statute enjoins that due effect shall be given to the depreciation allowance referred to in Section 32(2) and to any loss carried forward under Section 72(1), or Section 73(2) or Section 74(1). It is further provided that after a regular assessment has been made any amount paid or deemed to have been paid towards the provisional assessment shall be deemed to have been paid towards the regular assessment, any excess paid being refundable to the assessee. The section further declares that nothing done or suffered by reason or in consequence of any provisional assessment made under it shall prejudice the determination on the merits of any issue which may arise in the course of a regular assessment. A right of appeal has been expressly denied against a provisional assessment.;