COMMISSIONER OF INCOME TAX vs. GANDHINAGAR BOTTLING PVT.LTD.

ITR/80/1996HC GujaratGJHC24021760199629 January 2008Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MR. JUSTICE Z.K.SAIYED4 pages
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What were the facts?

The assessee, Gandhinagar Bottling Pvt. Ltd., filed its return of income for assessment year 1985-86 (accounting period ending 31.12.1984) on 25th November, 1985, declaring a loss. The due date for filing the return under Section 139(1) was 30th June, 1985. The Assessing Officer (AO) disallowed the carry forward of the business loss, holding that the return was filed beyond the statutory date. The assessee had filed applications seeking extension of time on 27th June, 1985, and 25th September, 1985, but received no intimation regarding their fate. The assessee presumed the extensions were granted. The Commissioner (Appeals) allowed the carry forward of loss, and the Income Tax Appellate Tribunal upheld this decision. The Revenue sought a reference to the High Court.

What did the High Court hold?

The High Court held that the Tribunal was right in law in directing the Assessing Officer to grant the benefit of carry forward of loss. The Court applied the ratio of its own previous decisions in Mehsana Ice and Cold Storage P. Ltd. and Swastik Sanitary Works Ltd. It was observed that the assessee had filed applications for extension of time, and since these applications were neither granted nor rejected by the department, the assessee was justified in presuming that the extensions were acceded to. As the return was filed within this presumed extended period, the assessee was entitled to carry forward the computed business loss. The question referred to the Court was answered in the negative, in favour of the assessee and against the Revenue. The reference was disposed of accordingly.

What were the issues?

1. Whether, on the facts and in law, the Appellate Tribunal was right in directing the AO to grant the benefit of carry forward of loss when the return was filed late, based on the assessee's presumption that an extension of time sought might have been granted by the department? (Question of law and fact, turning on Section 139(1) and the principle of presumed grant of extension). Assessee's contentions: - The assessee relied on the principle established in Gordhanbhai Jethabhai (142 ITR 84) and subsequent judgments of the Gujarat High Court in Mehsana Ice and Cold Storage P. Ltd. vs. Commissioner of Income Tax (2005) 275 ITR 601 and Commissioner of Income Tax vs. Swastik Sanitary Works Ltd. (2006) 286 ITR 544. - The assessee had made timely applications for extension of time. - Since no intimation was received regarding the rejection of the extension applications, the assessee was entitled to presume that they were granted. - The return was filed within the presumed extended period. Revenue's contentions: - The Revenue contended that the return was filed beyond the statutory due date, and therefore, the benefit of carry forward of loss should not be allowed.

Which sections of the Income-tax Act were involved?

Section 139(1),Section 256(1)

AI-generated summary — verify with the full judgment below

ITR/80/1996 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 80 of 1996 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MR.JUSTICE Z.K.SAIYED ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= COMMISSIONER OF INCOME TAX - Applicant(s) Versus GANDHINAGAR BOTTLING PVT.LTD. - Respondent(s) ========================================================= Appearance : MR MANISH R BHATT for Applicant(s) : 1, MR SN SOPARKAR for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE Z.K.SAIYED Date : 29/01/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA)

ITR/80/1996 2/4 JUDGMENT

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