Per Shri B.R. Adwalpalkar, Accountant Member - The only point for consi-deration in these two appeals filed by the assessee is whether the assessee-company was entitled to get its loss determined and carried forward notwithstanding the fact that such loss was declared for the first time in the returns filed in response to notice under section 148 read with section 147(a) of the Income-tax Act, 1961 (‘the Act’).

2. The assessee is a private limited company carrying on the business of production of cinematographic feature films. For the assessment years 1974-75 and 1975-76, the assessee-company did not file its returns volunta-rily but in response to notices issued to it by the ITO under section 148 read with section 147(a). In the returns so filed on 15-2-1979, the assessee-company declared a loss of Rs. 35,110 for the assessment year 1974-75 and Rs. 53,340 for the assessment year 1975-76. The ITO, however, found that the assessee-company who had filed balance sheets and profit and loss accounts for each of the assessment years had declared only royalty receipts against which it had claimed expenses; these the ITO considered excessive. He observed that besides, the assessee had not shown any receipt

on account of the picture ‘Neel Kamal’, which was released earlier. He, therefore, held that the assessee’s accounts were not verifiable. He also pointed out that since the assessee had not filed the returns as required within the time stipulated under the provisions of section 139(3) of the Act, the loss returned by the assessee cannot be treated as a loss. He, therefore, determined the total income of the assessee for the two assessment years at nil and finalised thetwo assessment proceedings accordingly.

3. On appeal by the assessee, the Commissioner (Appeals) rejected the assessee’s contention that the ITO ought to have computed the loss for each of the years. He pointed out that, since the assessee had not filed the returns suo moto in time but in response to the notices under section 148, the assessee cannot claim as of right any benefit which it could not have had if the assessments were not so reopened (sic). He added that it would be open to the ITO to drop such assessments and that, in law, it will be deemed that the ITO has dropped the relevant assessment proceedings in question in the assessee’s case. In this view, he dismissed the assessee’s appeals. Hence, the present appeals by the assessee to the Tribunal.

4. Before us, Shri D.D. Shah, the learned counsel for the assessee, sub- mitted at the outset that the assessee-company could not file its returns in time because its booksof account were seized by the income-tax depart- ment and were not released so as to enable the assessee to file the returns. He contended that, in any case, the return filed by the assessee in response to the notices, under section 148read with section 147(a),were returns under section 139(2) and as such entitled the assessee to determination of its business losses and ‘carry forward’ thereof in accordance with the law. In support of this proposition, Shri Shah cited the decision of the Madras High Court in the case of CIT v. Standard Motor Products of India Ltd. [1983] 142 ITR 877. He also referred to the decision of the Calcutta High Court in the case of Presidency MedicalCentre (P.) Ltd. v. CIT [1977] 108 ITR 838.

5. Shri R.N. Vaze, the departmental representative, on the other hand, submitted that the returns filed by the assessee for the assessment years 1974-75 and 1975-76 were neither under section 139(1) nor under section 139(2) nor under section 139(4), since each of the said sections has laid down a statutory period within which the return has to be filed. As regards the judicial decisions relied upon on behalf of the assessee, the depart- mental representative submitted that these were not the cases in point.

6. We have carefully considered the rival submissions vis-a-vis the facts of the case and the relevant case law. It is an und