M/S NARANJAN SINGH (TAKHAR) vs. INCOME TAX OFFICER

ITA/154/2004HC Punjab & HaryanaPHHC01051278200418 October 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL4 pages
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What did the High Court hold?

The High Court found substance in the assessee's submission. For assessment year 1992-93, it was held that when the assessee's claim for the previous year was not finally determined before filing the return for 1992-93, there was no occasion to claim the benefit at that juncture. Section 155 of the Act allows an assessee to move an application for rectification under Section 154 if there is a change in the firm's income. Therefore, the assessee's application was maintainable, and they were entitled to the benefit of carry forward of losses as determined by the order dated 9.11.1993 and its apportionment among partners. The question of law for assessment year 1992-93 was answered in favour of the assessee. For assessment years 1993-94 to 1995-96, it was held that the assessee was not entitled to any benefit because the firm had ceased to exist. If the firm was not in existence and unabsorbed depreciation was not carried forward in its hands, there was no question of its apportionment in the hands of the partners. Accordingly, the appeals for these years were dismissed.

What were the facts?

The assessee, Naranjan Singh, filed appeals against a composite order of the Income Tax Appellate Tribunal (Tribunal) for assessment years 1992-93 to 1995-96. For assessment year 1992-93, the assessee's return was processed on 31.5.1993. However, the carry forward of losses from assessment year 1991-92, including unabsorbed depreciation of Rs. 4,57,629, was only settled by an order dated 9.11.1993. The assessee sought rectification under Section 154 of the Income-tax Act, 1961, to give effect to this carry forward. The Assessing Officer rejected this, citing processing under Section 143(1)(a). The CIT(A) allowed the assessee's claim, but the Tribunal reversed this. For assessment years 1993-94 to 1995-96, the firm had ceased to exist.

What were the issues?

1. Whether, in the facts and circumstances, the Tribunal was correct in law in holding that the assessee was not entitled to set off depreciation allowed in the case of the firm by taking recourse to the provisions of Section 155 of the Income-tax Act, 1961, for assessment year 1992-93? Assessee's contention: The assessee argued that at the time of filing the return for assessment year 1992-93, the carry forward of losses for the previous year (1991-92) was undetermined. The appeal effect for 1991-92 was given only after the return for 1992-93 was processed. Since the benefit was admissible and an error apparent on record, it deserved rectification under Section 154. The rejection on the ground of processing under Section 143(1)(a) and the assessee not claiming the benefit initially was incorrect. Revenue's contention: The revenue contended that since the return for assessment year 1992-93 was processed under Section 143(1)(a) and the assessee did not claim the benefit at that stage, rectification under Section 154 was not permissible. The Tribunal upheld this view, reversing the CIT(A)'s order.

Which sections of the Income-tax Act were involved?

Section 155,Section 154,Section 143(1)(a)

AI-generated summary — verify with the full judgment below

I.T.A.No.154 of 2004 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

Date of decision: 18.10.2006 (1) I.T.A. No.154 of 2004 Naranjan Singh v. The Income Tax Officer, Phagwara, Jalandhar (2)I.T.A. No.337 of 2004 Naranjan Singh v. The Income Tax Officer, Phagwara, Jalandhar (3)I.T.A.No.338 of 2004 Naranjan Singh v. The Income Tax Officer, Phagwara, Jalandhar (4)I.T.A. No.339 of 2004 Naranjan Singh v. The Income Tax Officer, Phagwara, Jalandhar Present: Mr. K. L. Goyal, Advocate for the appellant. Dr. N. L. Sharda, Advocate for the respondent.

CORAM: Hon’ble Mr.Justice Adarsh Kumar Goel Hon’ble Mr. Justice Rajesh Bindal 1.Whether Reporters of local papers may be allowed to see the judgment ?

2.

To be referred to the Reporters or not ?

3.

Whether the judgment should be reported in the Digest? Rajesh Bindal, J. These appeals arise from a composite order dated 19.1.2004, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for short, `the Tribunal'), in I.T.A. Nos.531 to 534 (ASR) 1998, for the assessment years 1992-93 to 1995-96. At the time of admission of appeals, the following substantial que

The order continues below.

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