KAN SINGH, J. - (1.) WE have before us three writ petitions under Art. 226 of the Constitution questioning the validity of certain provisional assessments made under S. 141 of the INCOME TAX ACT, 1961, hereinafter to be referred as the "Act" , and as common questions of law are involved in them they can conveniently be disposed of together. As there is no dispute on facts, it will be sufficient to narrate the facts from Writ Petition No. 51 of 1964 (Jaipur Udhyog Ltd. vs. CIT).
(2.) THE petitioner No. 1 is a joint stock company registered under the Companies Act and runs a cement factory at Sawai Madhopur and is engaged in the business of manufacturing and distributing cement. The petitioner No. 2 is a shareholder of the company. They claim that the factory was established by the company in pursuance of an agreement between the company and the erstwhile Jaipur State whereby the company was exempted from the payment of all taxes including taxes on income for a period of 15 years from the date the company started the manufacture of cement from April, 1953. The petitioners proceed to say that in spite of this agreement the ITO assessed the company to income -tax. Aggrieved of this the petitioner -company filed a writ petition before this Court whereby it challenged the assessment order on the ground that on account of immunity of taxes conferred by the Ruler of the former Jaipur State the IT Department had no jurisdiction to assess the company. This writ petition was, however, dismissed by this Court on November 21, 1963. Against that decision, of course, the petitioner -company has obtained a certificate from this Court for appealing to the Supreme Court. The company continued to file its income -tax returns and the position about the assessment of these years will be clear from the subjoined statement : Assessment year . Returned figure . Assessed figure . . Rs. . Rs. As regards the assessments made up to the asst. year 1958 -59, the petitioner -company had filed appeals before the AAC which are all said to be pending. For the asst. year 1963 -64, to which the impugned provisional assessment relates, the company claimed a carried -forward loss of Rs. 1,03,03,935 in its return filed on September 30, 1963. As the company still maintained that there was absolute immunity in its favour from all taxes by virtue of the agreement with the Ruler of ex - Jaipur State, it appended a note in the return that it could not be assessed to income -tax within the period of exemption, in terms of the agreement. The petitioners assert that ignoring the claim of immunity from taxes and also by wrongly denying the claim for carry -forward loss to the tune of Rs. 1,03,03,935 to the company, the ITO made the provisional assessment. The ITO had allowed losses for the asst. yrs. 1956 -57, 1957 -58 and 1958 -59 as per the assessment orders for regular assessments and for the years 1959 - 60, 1960 -61 and 1961 -62, the ITO allowed losses as per returns of those years. After allowing these losses the ITO found that the net income for the asst. yr. 1963 -64 was Rs. 34,62,671 which led to the demand of income -tax at Rs. 8,73,873. In attacking the provisional assessments it is contended that the ITO had acted wholly without jurisdiction in ignoring the carry -forward loss of Rs. 1,03,03,935 claimed by the company in its return and the ITO had no warrant for substituting this figure by his own figure of a carry -forward loss of Rs. 39,89,731. Relying on the plain language of S. 141 of the Act, it is submitted that the ITO was duty bound to compute the tax on the basis of the figures given in the return and he had no jurisdiction to travel beyond the return or the documents accompanying it. Thus it is asserted that at the stage of provisional assessment the company was entitled to full allowances for the carry -forward loss claimed by it in computing its total income.
(3.) THE petitioners submit that the company filed representations to higher authorities against the provisional assessment made by the ITO and it also filed a revision application before the CIT under S. 264 of the Act, but without any success. The order of the CIT has also been placed on record. The CIT in his order observed that as the claim for carry -forward loss and not been determined in pursuance of the return filed under section 139 of the Act, S. 80 of the Act forbade the set -off in respect of such a carry -forward loss under sub -s. (1) of S. 71 or sub -s. (2) of S. 73 or sub -s. (1) of S. 74 of the Act.;