The return of loss filed in response to a notice under Section 148 cannot be treated as a return filed under Section 139(2) and within the time specified in Section 80 of the Income-tax Act, 1961.

AJIT K. SENGUPTA, J.

( 1 ) IN this reference under Section 256 (1) of the Income-tax Act, 1961, at the instance of the assessee, the following question has been referred by the Tribunal for the opinion of this court :"whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that business loss of Rs. 5,41,220 claimed in the return filed in response to notice under Section 148 of the Income-tax Act, 1961, could not be allowed to be carried forward as the said return could not be treated as a return filed under Section 139 (2) and within the time specified in Section 80 of the Income-tax Act, 1961 ?"

( 2 ) THE facts briefly stated are that the assessee-company, in the period relevant to the assessment year 1978-79, carried on business as dealers in engineering goods and of consultancy. The previous year of the assessee ended on December 31, 1977. The assessee was to submit its return under Section 139 (1) of the Act by June 30, 1978. The assessee did not submit any voluntary return even within the time prescribed under Section 139 (4) of the Act. Subsequently, in response to notice under Section 148 of the Act which was served on the assessee on September 16, 1981, the assessee-company filed a return on September 25, 1981, claiming business loss of Rs. 5,99,310. The Income-tax Officer, as per his order dated December 26, 1984, computed the business loss including depreciation at Rs. 5,94,370. He allowed carry forward of depreciation of Rs. 53,150 to be set off against profit of subsequent years but refused to allow carry forward of business loss as the income-tax return for the said year was not filed within the time allowed under Section 139 (1) of the Act.

( 3 ) BEING aggrieved, the assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals ). It was claimed that the return filed in response to notice under Section 148 should be treated as a return filed under Section 139 (2) of the Act. Before the Commissioner of Income-tax (Appeals), the assessee relied upon certain decisions of the Calcutta, Madras, Andhra Pradesh and Madhya Pradesh High Courts. The Commissioner of Income-tax (Appeals), after considering relevant material, held that the provisions of Section 147/148 of the Act could not be extended to mean that the assessee was entitled to further time beyond what was allowed under Section 139 (4) for filing a return and to claim carry forward of loss. He, accordingly, rejected the plea of the assessee that it be allowed the benefit of carry forward of loss.

( 4 ) ON further appeal, the contentions advanced before the lower authorities were reiterated before the Tribunal. It was claimed that the return filed in response to the notice under Section 148 was required to be treated as a return filed under Section 139 (2) and, therefore, within the time specified under Section 80 of the Act, thus entitling the assessee to have the benefit of carry forward of business loss. It was further submitted that assessment in the case of the assessee was completed under sections 142 and 143 of the Act. Reliance was placed on the decision of the Supreme Court in CIT v. Kulu Valley Transport Co. P. Ltd. [1970] 77 ITR 518.

( 5 ) THE Tribunal, on a consideration of the rival submissions, held that the return filed by the assessee on September 25, 1981, in response to the notice under Section 148 was not a return under any of the various subsections of Section 139 of the Act. After referring to the provisions of subsection (1) of Section 148, which require the Income-tax Officer to serve a notice upon the assessee containing all or any of the requirements included in a notice issued under Sub-section (2) of Section 139 before making assessment, reassessment or recomputation, the Tribunal held that only the machinery or procedural provisions of Section 139 (2) were applicable in proceedings under Section 147/148 of the Act. The Tribunal held that the purpose of notice unde

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