LexCOMMISSIONER OF INCOME-TAX, PUNJAB versus KULU VALLEY TRANSPORT CO. (P) LTD.
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452
COMMISSIONER OF INCOME-TAX, PUNJAB
v.
KULU VALLEY TRANSPORT CO. (P) LTD.
April 30, 1970
[J. C. Sf(AH, K. S. HEGDE AND A. N. GROVER, JJ.]
Income-tax Act. 1922, ss. 22(1), 22(3) tmd 22(2A )-Voluntary re-
urn •howing /os~ filed after sltltutory period laid down ins. 22(1)-Benefit
of s. 22(2A) whether can be given to assessee-Whether loss can be carri-
ed forward-J?eturn whether can be treated as one under s. 22(3).
The assessee was a private company incorporated under the Indian
Companies Act, 1913. In January 19$6 the company voluntarily filed
returns under s. 22(3) of the Income-tax Act. 1922 showing losses for
the assessment years 1953-54 and 1954-55.
No .1otice had been served
on the company under ·s. 22(2) of the Act. The Income-tax Officer held
that since the returns had been filed after the statutory period the com-
pany was not entitled to carry forward the losses 'for both the years in
the subsequent assessments. The Appellate Assistant Commissioner dis-
missed the company"s appeal ano its apJ?lication for condoning the delay
in filing the returns in question. The Tribunal held that the company was
not entitled to the benefit of carrying forward the losses as it had not filed
the returns in accordance with s. 22(2A) of the Act. The High Court,
in reference, held that a voluntary return showing loss could be validly
filed at any time. before assessment was made on the strength of the provi-
sion ins. 22(3) of the Act and the assessee was entitled to have such loss
carried 'forwud under s. 24(2). The Commissioner of Income-tax appeal-
ed to this Court,
HELP : Per Hegde and Grover, JJ .-The appeal must be dismissed.
(i) In view of this Court's decision in RtUrchhoddas Karsondas's case
A
B
c
D
E
the Income-tax Officer could not have ignored the returns and had to de-
termine the losses shown by the assessee. Section
24(2)
confers the
benefit of losses being set off and carried forward and there is no provi-
F
sion in s. 22 under which losses have to be determined for the purposes
of s. 24(2). Section 22(2A) does not place any limitation on that right.
It simply says that in order to get the benefit of s. 24(2) the assessee must.
submit his loss return within the time specified by s. 22(1). That provi'
sion must be read with s. 22(3) for the purpose of determining the time
within which a return ha.s to be submitted. It can well
be said that
s. 23(3) is merely a proviso to s. 22(1).
Thus a return submitted at
any time be'fore the assessment is made is a valid return.
In considering
G
whether a return made is within time sub-s. (I) of s. 22 must be read
along with sub-s. (3) of that section. A return whether it is a return of
. income, profits or gains or loss must be considered as having been made
withir• the time prescribed if it is made within the time specified in
s. 2:13). In other words if s. 22(3) is
complied with s. 22(1) also
must be held to· have been complied with. If compliance has been made
with the latter provision the requirements
of s. 22('.!A)
would stand
satisfied. f463 F-H; 464 A-BJ
ff
(ii) The argument that a great deal of inconvenience will result of a
voluntary return can be entertained at any time in accordance with
. C.I.T. V. K. V. TRANSPORT CO.
453
A
s. 22(3) when loss is involved and in order to give the assessee the benefit
of the c•rry forward of the loS> a number of assessments would have to .
be reopened, could not be accepted.
A voluntary return cannot in any
case be filed beyond the period specified in s. 34(3) of the Act. It cannot
be overlooked that even if two views are possible the view which is favour-
able to the assessce must be accepted while construing the provisions of a
taxing statute~464 C-D]
B
Commi"·'loner of lnmme-tax, Bombay City v. Rand1/Joddas Karson-
c
D
E
F
dM,,; 36 J.T.R. 569, applied.
R11dl1t1kri.,/11111 R11ngta & Ors. v. Seventh Income-tax Officer C-JJ Ward,
Bmnhay, 49 1.·1 .R. 846, approved.
Commi.1.1io11er uf ARric11/111ral Income-tax v. Sultan Ali Gharami,
20
l.T.R. 432, Commissiuntr uf Income-tax, West Bengal v. Govindlal,
33
J.T.R. 630 and Ranc/1hoddas Karsondas v. Commissioner of income-tax,
Bombay City, 26 l.T.R. 105, referred to.
Per Shah, J. (Di.uentinR) :-The clause "if he is to be entitled to the
benefit of the carry forward o·( loss" in sub-s. (2A) of s. 22 clearly means
that the right to carry forward loss suffered under the head of income
computable under s. JUExcerpt shown. Read the full judgment & AI analysis in Lexace.