Ajit Kumar Sengupta, J. - (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1972-73, the following question of law has been referred to this court: "Whether, on the facts and in the circumstances of the case, and on a correct interpretation of Section 2(45), Section 80B(5) and Section 80A(2) of the Income-tax Act, 1961, the Tribunal was correct in holding that for the purpose of rebate under Section 80G and relief under Section 80M of the said Act, the total income and gross total income should be computed without setting off brought forward losses and unabsorbed depreciation of the earlier years ?"
(2.) The facts leading to this reference are stated hereafter:
(3.) The assessee claimed deductions under Section 80G and Section 80M of the Income-tax Act, 1961, but these claims of the assessee were negatived by the Income-tax Officer since he found the assessable income for the year under consideration after setting off of losses and unabsorbed depreciation of the earlier year came to a nil figure. The assessee appealed to the Appellate Assistant Commissioner who allowed those claims of the assessee following the orders of the Tribunal on this point in various cases. Against that order of the Appellate Assistant Commissioner, the Department preferred an appeal before the Tribunal and it was contended on behalf of the Department that in accordance with the provisions of Sections 80B(5) and 80A(2) of the Act which came into force with effect from April 1, 1968, the assessee was not entitled to the deductions claimed under Sections 80G and 80M of the Act because the assessee's income for the purpose of income-tax assessment came to a nil figure, and that the term "gross total income" meant the total income as computed after considering the provisions of Sections 71 and 72 of the Act, but before making any deductions under Chapter VI-A and under Section 280C of the Act. It was submitted that on the aforesaid basis, the income of the assessee came to a nil figure and, consequently, the deductions claimed by the assessee should not have been allowed by the Appellate Assistant Commissioner. It was, however, claimed on behalf of the assessee that the Appellate Assistant Commissioner was justified in allowing the claims of the assessee in view of the decision of the Income-tax Appellate Tribunal, Bombay Bench. Reference was also made to the language employed in Section 2(45) of the Act.;