IMPORTANT POINTS
Section 72A of IT Act does not apply to co-operative societies.
Companies and societies are different and distinct. Cannot be given same treatment.
Taxing statutes should be construed strictly.

JUDGMENT

ANIL R. DAVE, J.

1. Being aggrieved by the judgment delivered on 19th September, 2002 in Income Tax Appeal No.19 of 2001 by the High Court of Judicature of Rajasthan, Jaipur Bench, this appeal has been filed by the assessee, which is a co-operative society. When the appeal was called out for hearing, none had appeared for the appellant co-operative society. Upon perusal of the record, we found that the learned advocate who had appeared earlier had become a senior counsel. In the circumstances, we had requested his colleague to appear in the matter but he had shown his reluctance to appear for the appellant society, especially in view of the fact that though more than two letters had been addressed to the appellant society for sending vakalatnama or for making appropriate arrangement for its appearance in this Court, the appellant society had not even cared to reply to the said letters. As the appellant society is a society wherein the State of Rajasthan has substantial interest, we had requested learned advocate Mr. Puneet Jain to assist the court by appearing for the appellant society and in pursuance of the request of this Court, he had rendered his valuable assistance by appearing for the appellant society.

2. The facts giving rise to the present appeal in a nut-shell are as under:

There were four co-operative societies in the State of Rajasthan wherein the Government of Rajasthan had substantial share holding, namely - (i) Rajasthan Co-operative Spinning Mills Ltd.; (ii) Gangapur Co-operative Spinning Mills Ltd.; (iii) Ganganagar Co-operative Spinning Mills Ltd.; and (iv) Gulabpura Cotton Ginning & Pressing Sahkari Samiti Ltd. An administrative decision was taken by the Government of Rajasthan to amalgamate all the aforestated co-operative societies into the appellant co- operative society, namely Rajasthan Rajya Sahkari Spinning & Ginning Mills Federation Ltd w.e.f. 01.01.1993.

Upon amalgamation of the said societies into the appellant society, the registration of the said four co-operative societies had been cancelled and all the assets and liabilities of the said four societies had been taken over by the appellant society by virtue of the aforestated amalgamation. The aforestated four societies were not sound financially and they had substantial accumulative losses. After the amalgamation of the four co-operative societies into the appellant society, when Income-Tax returns for the assessment years 1994-95 and 1995-96 were filed by the appellant society, the appellant society wanted to get the accumulated losses of the aforestated societies, of about Rs.2,68,39,504/-, carried forward, so that the same could be set off against the profits of the appellant society under the provisions of Section 72 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

The assessing officer negatived the appellant’s claim for the reason that the said societies were not in existence after their amalgamation into the appellant society. As the said four societies were not in existence, according to the assessing officer, their accumulated losses could not have been carried forward or adjusted against the profits of the appellant society. Assessment orders were passed accordingly.

3. Being aggrieved by the above stated assessment orders, appeals were filed before the CIT (Appeals) and the CIT (Appeals) dismissed the said appeals. Further appeals were filed before the Income Tax Appellate Tribunal but the Tribunal also dismissed the appeals.

4. Being aggrieved by the common order passed by the Tribunal, the appellant filed Income Tax Appeal No.19 of 2001 before the High Court of Rajasthan and the said Income Tax Appeal was also dismissed and therefore, the appellant has approached this Court by way of the present appeal.

5. The learned counsel appearing for the appellant society had submitted that the assessing officer and the authorities below, confirming the view taken by the assessing officer, are not correct for the reason tha