M/S Hemyog Hotel (P) Limited, Chandigarh v. The Commissioner Of Income Tax, Patiala

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. ITR No.341 of 1995 (O&M)Date of decision: 10.11.2009 M/s Hemyog Hotel (P) Limited, Chandigarh Vs. The Commissioner of Income Tax, Patiala -----Applicant ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE GURDEV SINGH Present:-Mr. Animesh Sharma, Advocate for the applicant.Ms. Urvashi Dhugga, Advocate for the revenue. Adarsh Kumar Goel,J. 1.At the instance of the assessee, following question oflaw has been referred for opinion of this Court by the Income TaxAppellate Tribunal, Chandigarh Bench, Chandigarh, arising out ofits order dated 7.10.1994 in ITA No.1474/Chandi/1989, for theassessment year 1985-86:- “Whether in the facts and circumstances of thecase, the Income Tax Appellate Tribunal wasjustified in holding that the application forextension of time having been filed on 30.9.1985 onthe date of filing of the return itself, the return was abelated return and the loss of Rs.8,26,150/-determined could not be carried forward?” 2.The assessee filed return on 30.9.1985 declaring lossincluding carried forward loss. The time for filing return hadearlier expired and extension had been allowed upto 31.8.1985vide order dated 27.7.1985. The return was not filed within thestipulated time nor any application was made upto the stipulateddate. Application made on 30.9.1985 was not considered andassessment was made ignoring the return which has been upheldby the CIT(A) as well as the Tribunal. 3.We have heard learned counsel for the parties. 4.Learned counsel for the assessee submits that even afterexpiry of stipulated date, application for extension of time could befiled which had to be dealt with on merits or time should be takento have been extended. He relies upon judgment of this Court inKaram Singh v. CIT, Patiala II,(1977) 110 ITR 726 andHarmanjit Trust v. CIT, Patiala I, (1984) 148 ITR 214 andjudgment of Patna High Court in CIT, Bihar v. Ramdas andSons,(1980) 123 ITR 889 in support of his submission.. 5. On the other hand, learned counsel for the revenuesubmits that mere making of application does not entitle theassessee to extension of time unless there are valid reasons forextension. It is submitted that even if application filed afterstipulated date could be entertained, valid reasons were required tobe disclosed. In the present case, the assessee has not put forward any valid reasons nor any question of law has been sought onvalidity or otherwise of the reasons. There could not be anyautomatic extension of time when order had been once passedgiving extension upto a particular date. There could not be endlessapplications. In absence of return having been filed within time,the assessee could not carry forward the loss. Reliance has beenplaced on CIT v. Smt.Gunavathy Dharmasy,(2000) 241 ITR168 (Kerala) and CIT v. KC Bezbarua, (1992) 195 ITR 321(Guwahati). 6.We are of the opinion that since power to extend timewas available under Proviso to Section 139(1) read with Rule 13 ofthe Rules, the Assessing Officer was bound to consider the sameand convey his decision thereon to the assessee. There may notalways be automatic extension of time for failure to conveydecision on the prayer for extension of time and it may depend on afact situation whether deemed extension is to be presumed. In thepresent case, reasons put forward for seeking extension shouldhave been considered before disregarding the return filed beyondtime, alongwith application for extension of time. Ignoring theapplication for extension of time and the belated return, withoutpassing any order on the said application and without consideringthe reasons for seeking extension of time, could not be a part offair procedure. 7. Accordingly, the question is answered in favour of theassessee to the effect that the Tribunal was not justified in ignoringthe return without looking into the reasons and justification forseeking extension of time. If application was not traceable, theassessee could have been required to give another copy. TheTribunal may consider the matter, afresh, accordingly.8.Reference is disposed of. (Adarsh Kumar Goel)Judge November 10, 2009‘gs’ (Gurdev Singh)Judge