1. The only point for consideration in these two appeals filed by the assessee is whether the assesseecompany 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 voluntarily 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 assesseecompany 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 asssssee's accounts were not verifiable. He also pointed out that since the assesses 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 the two 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, submitted at the outset that the assessee-company could not file its returns in time because its books of account were seized by the income-tax department 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 148 read 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.  142 ITR 877. He also referred to the decision of the Calcutta High Court in the case of Presidency Medical Centre (P.) Ltd. v. CIT  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 departmental 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 undisputed fact, in the present case that the assessee did not file any return for the assessment years 1974-75 and 1975-76 suo moto within the time limit prescribed under Sections 139(1) and 139(4), There was apparently no notice issued to the assessee under Section 139 (2) within the relevant financial years. The clear provisions of Section 139(3) lay down that if any person who has not been served with a notice under Sub-section (2) of Section 139, has sustained a loss in any previous year under the head 'Profits and gains of business or profession', etc. and claims that the loss or any part thereof should be carried forward under Sub-section (1) of Section 72 or Sub-section (2) of Section 73 or Sub-section (1) of Section 74 of the Act, etc., has to furnish within the time allowed under Section 139(1) or within such further time as the ITO may, in his discretion allow, on an application made by the assessee. Even a person who has not furnished a return within the time allowed to him under Section 139(1) or 139(2) can furnish a return before the assessment is made, but then the returns had to be filed before the expiry of two years from the end of the assessment years in question. The assessee, who had obviously not filed the returns within any of the aforesaid time limits, was not entitled to the determination and carry forward of losses which were admittedly claimed for the first time in returns filed in response to notices under Section 148 read with Section 147(a). In this respect, the decision of the Madras High Court in the case of standard Motor Products of India Ltd. (supra) does not assist the assesseecompany's contention ; for, in that case, the questions were whether in the reassessment proceedings the ITO can assess the entire income including the items falling under Section 147(6) and also whether withdrawal of excess depreciation in respect of machinery is permissible in the reassessment proceedings. Similarly, reliance by the assessee's counsel on the decision of the Calcutta High Court in the case of Presidency Medical Centre (P.) Ltd. (supra) is evidently misplaced ; for, in that case, the return was filed by the assessee within the time specified under Section 139(4). As already explained above, this is obviously not the case of the present assessee. We also agree with the Commissioner (Appeals) that in reassessment proceedings under Section 147(a), the assessee cannot get a benefit which he has missed by not complying with the statutory provisions in that behalf. We may add that the reassessment proceedings under Section 147 are evidently intended for charging to tax income chargeable to tax which has escaped assessment in the sense that it has been under-assessed, assessed at too low a rate or has been made the subject of excessive relief under the Act or excessive loss or depreciation allowance has been computed. The said provisions are certainly not intended to grant relief to the assessee by way of determination of loss and carry forward thereof. In this view of the matter, we uphold the decision of the Commissioner (Appeals) for both the assessment years.