LexCOMMISSIONER OF INCOME-TAX versus SUN ENGINEERING WORKS (P) LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A COMMISSIONER OF INCOME-TAX v. SUN ENGINEERING WORKS (P) LTD. SEPTEMBER 17, 1992 B [YOGESHWAR DAYAL AND DR. A.S. ANAND, JJ.J Income Tax Act, 1961: Sections 147(a}, 148 and 152(2)-Escapement of income-Rcassess- C ment-Scope of-Whether assessee could seek review of concluded item unconnected with escapement of income and matters attaining finality in original assessment, in computation of escaped income-Assessce filing returns for two assessment years showing loss--fncome Tax Officer treating returns as being beyond time and terminating proceedings-Loss not deter- mined-Subsequently assessee filing disclosure petition showing Hundi D loans-Whether loss shown in original returns to be taken into acc.Junt in reassessment proceedings for computation of escaped income. Precedents-Supreme Court Judgment-Application of principles laid down therein-To be understood in the light of question before court-Words E and sentences of Judgment not to be divorced from context of the question under consideration. The respondent-assessee in the two appeals filed the returns of income for the assessment years 1960-61 and 1961-62 showing loss. The Income Tax Officer considered both the returns and recorded that the F returns were tiled beyond time, and conveyed to the appellant that the loss returns submitted beyond time for the assessment years under reference being invalid, no action on them was necessary, and hence the proceedings for both these years were filed. On appeal, the Appellate Assistant Commissioner held that though G the Income Tax Officer was wrong in filing the returns without proper scrutiny and without first computing the loss, ioasmnch as it could only be known aller proper computation whether assessment would result in a loss or not, no relief could be granted since the Income Tax Officer had filed the returns, and dismissed both the appeals. Since the assessee <lid H not prefer any further appeal the orders of the Income Tax Officer relating 732 C.l.T. v. SUN ENG. WORKS 733 to the assessment years in question in respect of the "loss returns" became A fiual. Subsequently, the assessee filed a disclosure petition in respect of some Hundi loans and a settlement was arrived at between the assessee and the Revenue, as a result whereof the assessee became assessable for B the disclosed sums for the assessment years 1960-61 and 1961-62. The Income Tax Officer considered the said amounts for the two assessment years as escaped income, and after issuing a notice, as required by section 148 of the Income Tax Act, 1961, within the statutory period, calling npon the assessee to show cause why the "escaped income" for the two assess- ment years be not brought to tax under section 147(a) of the Act, and C hearing the parties and considering the objections, made an order under section 147(a) of the Act, bringing the escaped income to tax. Aggrieved, the assessee filed an appeal before the Appellate Assistant Commissioner contending that the Income Tax Officer should have !l'determined the loss as declared in the original returns and set it off against the escaped income D from other sources and even carry forward the loss, if necessary to the subsequent assessment years. The Appellate Assistant Commissioner al- lowed the appeal, and directed the Income Tax Officer to not only redeter- mine the loss, as per the original loss returns and set it off against the escaped income from other sources, but also to carry forward the unab- E sorbed loss, if any, and set it off against the income in the subsequent years. In appeal by Revenue, the Income Tax Appellate Tribunal, accepted its plea that the action of the Income Tax Officer in filing the assessment F proceedings for 1960-61 and 1961-62 on the grounds indicated by him amounted to nil assessment and that the Income Tax Officer had not allowed the losses as claimed by the assessee in the returns which had been filed beyond time, and that since the decision of the Income Tax Officer had been upheld in appeal by the Appellate Assistant Commissioner and G the assessee had not taken up th~ matter in any further appeal or revision, the order of the Income Tax Officer had acquired finality. The Tribunal held that the Appellate Assistant Commissioner was in error in holding that the determination of the losses claim~d originally were still open for review in proceedings under Section.147(a) and directing the computation of
Excerpt shown. Read the full judgment & AI analysis in Lexace.