Sh. Tarninder Singh, Chandigarh V. DCIT, Chandigarh

ITA 732/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6559 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 14-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: N K SAINI
• Keywords: Revision of order; Opportunity of being heard; Revised return; Reassessment proceedings
• Section: 153A; 139(5); 147; 132; 15; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 732/CHD/2016 ASSESSMENT YEARS: 2009-10 SH. TARMINDER SINGH VS. DCIT SCO 139-141 SECTOR 17C CENTRAL CIRCLE-1 CHANDIGARH (APPELLANT) CHANDIGARH PAN NO. ABZPS6105N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. N.K. SAINI DEPARTMENT BY : SHRI. MANJIT SINGH DATE OF HEARING : 28/09/2017 DATE OF PRONOUNCEMENT : 15/12/2017 ORDER PER DR. B.R.R. KUMAR, AM THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A)-3, GURGAON DT. 14/03/2016. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER PASSED BY THE LD. CIT(A) IS CONTRARY TO L AW & FACTS OF THE CASE. 2. THE LD. CIT(A) HAS ERRED IN LAW IN CONFIRMING THE O RDER OF THE AO BY FOLLOWING THE JUDGMENT IN THE CASE OF SUN ENGINEERING WORKS 198 I TR 297 (SC) IN NOT ALLOWING THE CARRY FORWARD OF LOSS FROM BUSINESS AND PROFESSION OF RS. 95,21,101/- ON THE GROUND THAT ORIGINAL ASSESSMENT IS NOT WIPED OFF AND LOSS AND ALLOWED TO BE SET OFF DUE TO LATE FILING OF RETURN OF INCOME CANNOT BE ALLOWED TO BE CARRIED FORWARD AND SET OFF HOLDING THAT SAME RATIO WILL BE APPLICABLE IN THE CASE OF REASSESSMENT PROCEEDINGS U/S 153A AS IT WAS A CASE OF ASSESSMENT U/S 153A AND NOT A CASE OF REASSESSMENT U/S 153A. 3. THE GROUND NO. 2 RELATES TO THE DENIAL OF BENEFI T AND DEDUCTION OF CARRY FORWARD OF LOSSES OF RS. 95,21,101/- TO THE ASSESSE E AS CLAIMED IN HIS INCOME TAX RETURN. 4. THE ASSESSING OFFICER HAS NOT GIVEN THE BENEFIT OF B/F LOSSES AS THE ASSESSEE HAD NOT FILED THE RETURN U/S 139(1) WITHIN THE STIP ULATED TIME. 5. THE LD. CIT(A) HELD THAT WITH REGARD TO CARRY FO RWARD OF BUSINESS LOSSES IT HAS BEEN SUBMITTED BY THE ASSESSEE THAT RETURN FOR AY 2009-10 WAS FILED IN RESPONSE TO NOTICE U/S 153A ON 25.04.2013 CLAIMING CARRY FORWARD LOSS OF RS. 92,03,475/-. THE APPELLANT HAS STATED THAT THE RETU RN FILED UNDER SECTION 153A IN RESPECT OF AY 2009-10 IS REQUIRED TO BE TAKEN AS IF THE SAME IS FILED U/S 139 (1) 2 WITHIN TIME AND KEEPING IN VIEW THE SAME, LOSS AS C LAIMED AT THE TIME OF FILLING OF RETURN WAS REQUIRED TO BE CARRY FORWARD IN VIEW OF THE DECISION OF HON'BLE ITAT CHENNAI BENCH IN THE CASE OF ACIT VS V.N. DEVADASS (2013) 93 DTR 0073 (CHENNAI) (TRIB). 6. THE LD. CIT(A) AFTER HAVING PERUSED THE JUDGMEN T, WHEREIN THE HON'BLE ITAT HAS HELD AS HEREUNDER: '38. WHERE AN ASSESSEE HAS FILED HIS RETURN OF INCO ME AS PRESCRIBED BY LAW, EVEN IF AS A CONSEQUENCE OF SEARCH CARRIED OUT UNDER SECTION 132 AND IN THE CONSEQUENCE OF NOTICE ISSUED UNDER SECTION 153A, THE ASSESSEE IS OBVIOUSLY ENTIT LED FOR CLAIMING CORRESPONDING DEDUCTIONS PROVIDED IN LAW. THE DEDUCTION CLAIMED IN A RETURN FILED UNDER SECTION 153A CANNOT HE DENIED ON THE GROUND THAT THE CLAIM WAS NOT MADE EARLIER I N A RETURN FIELD UNDER SECTION 139(1). 39. IN THE PRESENT CASE, THE RETURNS WERE FILED BEC AUSE OF SECTION 132, SECTION 153A AND CONSEQUENTLY BECAUSE OF SECTION 139. INCOME OF THE ASSESSEE HAD TO BE DECLARED BECAUSE OF THE EVENT OF SEARCH, AT THAT TIME THE ASSESSEE WERE EQU ALLY ENTITLED TO CLAIM LAWFUL DEDUCTIONS AVAILABLE TO THEM, A CLAIM MADE BY AN ASSESSEE CANN OT BE DENIED ONLY ON THE GROUND THAT THE RETURN WAS FILED IN CONSEQUENCE OF SEARCH. 7. THE LD. CIT(A) HELD THAT THE ABOVE REFERRED JUDG MENT ONLY REFERS TO THE CLAIM OF DEDUCTIONS PROVIDED IN LAW AND NOT CARRY F ORWARD OF LOSSES. IT WAS HELD BY THE LD. CIT(A) THAT IN THE CASE OF CIT VS SUN EN GINEERING WORKS (P) LTD [ 1992] 198 ITR 297, HON'BLE SUPREME COURT HAS HELD THAT BY REASSESSMENT, ORIGINAL ASSESSMENT IS NOT WIPED OFF. A LOSS NOT ALLOWED TO BE SET OFF DUE TO LATE FILING OF RETURN OF INCOME, CANNOT BE CLAIMED TO BE ALLOWED T O BE CARRIED FORWARD AND SET OFF. IN VIEW OF THE ABOVE JUDGEMENT, AS THE SAM E RATIO WILL BE APPLICABLE IN THE CASE OF REASSESSMENT PROCEEDINGS U/S 153A, THE APPELLANT IS NOT ALLOWED TO CARRY FORWARD THE BUSINESS LOSSES OF THE YEAR. 8. BEFORE US THE LD. AR ARGUED THAT IN THE CASE OF PCIT VS. NEERAJ JINDAL 393 ITR 001(DEL) IT WAS HELD THAT SECTION 153A WAS IN T HE NATURE OF SECOND CHANCE GIVEN TO THE ASSESSEE WHICH INCIDENTALLY GAVE HIM O PPORTUNITY TO MAKE GOOD OMISSION, IF ANY IN ORIGINAL RETURN. ONCE ASSESSING OFFICER ACCEPTS REVISED RETURN FILED UNDER SECTION 153A ORIGINAL RETURN UNDER SECT ION 139 ABATES AND BECOMES NON-EST . THE LD. AR FURTHER ARGUED THAT IN THE CASE OF MAI THAN ISPAT LTD. VS. DCIT 34 ITR (TRIB) 549 KOLKATA WHEREIN IT WAS HELD THAT WHERE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME UNDER SECTION 139(1) FOR THE R EASON THAT ASSESSMENT PROCEEDINGS HAD ABATED FOR CONCERNED YEAR IN VIEW O F S. 153A(1)- ASSESSING OFFICER MERELY DISALLOWED LOSS BY OBSERVING THAT B USINESS LOSS INCLUDED IN TOTAL LOSS ASSESSED WAS NOT ALLOWED TO BE CARRIED FORWARD SINCE RETURN WAS FILED AFTER DUE DATE- CIT(A), CONFIRMED ACTION OF ASSESSING OFF ICER IN DISALLOWING CARRY FORWARD OF BUSINESS LOSS ON GROUND THAT ASSESSEE FI LED BELATED RETURN OF INCOME 3 UNDER SECTION 139(1), IGNORING SECOND PROVISO TO S ECTION 153A(1)- HELD, SECOND PROVISO TO S. 153A(1)(B) PROVIDE THAT IF ON DATE OF SEARCH OR REQUISITION UNDER SECTION. 132 OR 132A, ANY ASSESSMENT OR REASSESSMEN T PROCEEDINGS RELATING TO THAT PARTICULAR ASSESSMENT WAS PENDING, THEN PENDIN G PROCEEDINGS FOR REGULAR ASSESSMENT WOULD STAND ABATED FRESH ASSESSMENT CO ULD BE DONE ONLY UNDER SECTION 153A- ASSESSEE WAS NOT SUPPOSED TO FILE ITS RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT- ASSESSEE WAS STATUTORILY REQUIRED TO FILE RETURN OF ITS INCOME IN RESPONSE TO NOTICE UNDER SECTION 153A AND HAD DONE ACCORDINGLY MAKING CLAIM OF LOSS. IN THE CASE OF ACIT VS. DEVA DOSS 35 CCH 0397 THE TRIBUNAL HELD AS UNDER: 38. WHERE AN ASSESSSEE HAS FILED HIS RETURN OF INCO ME AS PRESCRIBED BY LAW, WVE IN AS A CONSEQUENCE OF SEARCH CARRIED OUT UNDER SECTIO N 132 AND IN CONSEQUENCE OF NOTICE ISSUED UNDER SECTION 153A, THE ASSESSEE I S OBVIOUSLY ENTITLED FOR CLAIMING CORRESPONDING DEDUCTIONS PROVIDED IN LAW. THE DEDUC TION CLAIMED IN A RETURN FILED UNDER SECTION 153A CANNOT BE DENIED ON THE GR OUND THAT THE CLAIM WAS NOT MADE EARLIER IN A RETURN FILED UNDER SECTION 139(1) . 39. IN THE PRESENT CASE, THE RETURNS WERE FILED BEC AUSE OF SECTION 132, SECTION 153A AND CONSEQUENTLY BECAUSE OF SECTION 139. INCOM E OF THE ASSESSEE HAD TO BE DECLARED BECAUSE OF THE EVENT OF SEARCH. AT THAT TIME THE ASSESSEES WERE EQUALLY ENTITLED TO CLAIM LAWFUL DEDUCTIONS AVAILAB LE TO THEM. A CLAIM MADE BY AN ASSESSEE CANNOT BE DENIED ONLY ON THE GROUND THA T THE RETURN WAS FILED IN CONSEQUENCE OF SEARCH. 40. THE LITMUS TEST IN THE PRESENT CASE IS WHETHER THE ASSESSEES HAVE FILED THE RETURNS IN TIME, IN RESPONSE TO THE NOTICES ISSUED UNDER SECTION 153A. IF THE RETURNS WERE FILED WITHIN THE TIME ALLOWED UNDER SECTION 15 3A, IT IS AS GOOD AS HAVING THE RETURNS FILED UNDER SECTION 139(1) WITHIN THE DUE D ATE. SIMILARLY IN THE CASE OF FAISAL ABBAS VS. DCIT IN I TA NO. 3485 & 3487/MUM/2010 THE TRIBUNAL HELD AS UNDER: 6. IT IS FURTHER IMPORTANT TO NOTE THAT SECTION 1 53A DEALING WITH ASSESSMENT IN CASE OF SEARCH PROVIDES FOR THE ISSUANCE OF NOTICE TO THE ASSESSEE IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH SEARCH IS CONDUCTED SECTION 153A(1)(A) CLEARLY PROVIDES THAT THE PROVI SIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139. FROM THE PRESCRIPTION OF SECTION 153A, IT IS APPARENT THAT THE RETURN FILED IN RESPONSE TO NOTICE UNDER S ECTION 153A IS TREATED AS THE RETURN FILED UNDER SECTION 139. IF THAT IS THE POSI TION, WE ARE UNABLE TO APPRECIATE AS TO HOW THE LOSS DETERMINED FOR THE IMMEDIATELY P RECEDING YEAR WILL NOT BE AVAILABLE TO THE ASSESSEE FOR THE SET OFF AGAINST T HE CURRENT YEARS INCOME DECLARED IN THE RETURN FILED UNDER SECTION 153A. 8. IN VIEW OF THE FOREGOING REASONS, WE ARE SATISFI ED THAT THE ASSESSEE IS ENTITLED TO SET OFF OF THE BROUGHT FORWARD BUSINESS LOSS AGAINS T THE INCOME OF THE CURRENT YEAR AS PER LAW. AS THE COMPOSITION OF THE TOTAL INCOME FOR THE CURRENT YEAR IS NOT AVAILABLE ON RECORD, WE SET ASIDE THE IMPUGNED ORDE R AND RESTORE THE MATTER TO THE FILE OF ASSESSING OFFICER FOR ALLOWING THE SET OFF OF THE BROUGHT FORWARD BUSINESS LOSS AGAINST THE CURRENT YEARS INCOME AS PER LAW A FTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE CASE OF EVERSMILE CONSTRUCTION COMPANY PVT. LTD. IN ITA NO. 4238/MUM/2010 THE TRIBUNAL HELD THAT THE PROVISIONS OF SECTION 147 VIS A VIS 143A 4 ARE DIFFERENT AND HELD THAT DEBARRING THE ASSESSEE FROM MAKING A CLAIM ABOUT THE DEDUCTABILITY OF ANY ITEM WHICH WAS EARLIER DIS ALLOWED COUNTERS VERY CONCEPT OF FRESH ASSESSMENT OF THE TOTAL INCOME. 9. THE LD. DR VEHEMENTLY ARGUED THAT THE JUDGMENT O F HONBLE SUPREME COURT IN THE CASE OF CIT VS. SUN ENGINEERING WORKS 198 ITR 297 (SC) IS SQUARELY APPLICABLE IN THE PRESENT CASE WHEREIN IT WAS HELD THAT THE ISSUES CONCLUDED IN THE COMPLETED ASSESSMENT CANNOT BE REVISITED. 10. IN THE ABOVE BACKGROUND, IN ORDER TO APPRECIATE THE CONTENTIONS OF BOTH THE PARTIES IT WOULD BE RELEVANT TO NOTE DOWN THE P ROVISIONS OF SECTION 153A WHICH ARE AS UNDER: 153A. ASSESSMENT IN CASE OF SEARCH OR REQUISITION.- (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE A SSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED T O IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETT ING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETU RN REQUIRED TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE : PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS: PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, I F ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX AS SESSMENT YEARS REFERRED TO IN THIS SUB-SECTION PENDING ON THE DATE OF INITIATION OF TH E SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CA SE MAY BE, SHALL ABATE. (2) IF ANY PROCEEDING INITIATED OR ANY ORDER OF ASS ESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEEN ANNULLED IN APPEAL O R ANY OTHER LEGAL PROCEEDING, THEN, NOTWITHSTANDING ANYTHING CONTAINE D IN SUB-SECTION (1) OR SECTION 153, THE ASSESSMENT OR REASSESSMENT RELATIN G TO ANY ASSESSMENT YEAR WHICH HAS ABATED UNDER THE SECOND PROVISO TO SUB-SE CTION (1), SHALL STAND REVIVED WITH EFFECT FROM THE DATE OF RECEIPT OF THE ORDER O F SUCH ANNULMENT BY THE COMMISSIONER: PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFE CT, IF SUCH ORDER OF ANNULMENT IS SET ASIDE. EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THAT, (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SEC TION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASS ESSMENT MADE UNDER THIS SECTION; (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPE CT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX SHALL BE CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSMENT YEAR. 11. THUS THE RETURN FILED UNDER SECTION 153A TAKES A FORM OF RETURN FURNISHED UNDER SECTION 139(1) AND THE ASSESSEE IS ENTITLED F OR ALL THE BENEFITS AS PER THE ACT PROVIDED THE ASSESSEE FOLLOWS THE PROVISIONS ME NTIONED IN 153(A)(A) (A) I.E; ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNI SH WITHIN SUCH PERIOD, AS MAY 5 BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED T O IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETT ING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 12. IN THE INSTANT CASE THE ASSESSEE FOR THE ASSESS MENT YEAR 2009-10 FILED ORIGINAL RETURN OF INCOME ON 24/04/2013 DECLARING I NCOME OF RS. 18,00,000/- UNDER THE HEAD SALARY, INCOME FROM HOUSE PROPERTY, INCOME FROM BUSINESS OR PROFESSION. WHEREAS THE DUE DATE FOR FILING THE RET URN WAS 31/07/2009. IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 153A DT . 10/01/2013 THE ASSESSEE FILED RETURN OF INCOME ON 25/07/2013 DECLARING INCO ME AT RS. 21,92,000/- AND CLAIMING CARRIED FORWARD LOSS OF RS. 95,21,101/-. THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF 'JA I STEEL (INDIA) V. ACIT' (2013) 259 CTR 281 HAS HELD THAT IN CASE NOTHING IN CRIMINATING IS FOUND ON ACCOUNT OF SEARCH OR REQUISITION, THE QUESTION OF R EASSESSMENT OF THE CONCLUDED ASSESSMENT DOES NOT ARISE. UNDER SUCH CIRCUMSTANCES , IT IS NOT OPEN TO THE ASSESSEE TO SEEK DEDUCTION OR CLAIM EXPENDITURE WHI CH HAS NOT BEEN CLAIMED IN THE ORIGINAL AND ALREADY CONCLUDED ASSESSMENT, IN T HE CASE OF ASSESSMENT U/S. 153A IN PURSUANCE OF SEARCH ACTION. HONBLE HIGH CO URT REJECTED THE ARGUMENT OF THE LEARNED COUNSEL FOR ASSESSEE TO THE EFFECT T HAT ONCE THE NOTICE U/S. 153 A IS ISSUED, THE ASSESSMENTS FOR SIX YEARS ARE AT LAR GE BOTH FOR THE AO AND THE ASSESSEE. IT HAS BEEN FURTHER HELD BY THE HON'BLE H IGH COURT THAT THE PROVISIONS OF SECTION 153A TO 153C CANNOT BE INTERPRETED TO BE FU RTHER INNINGS TO THE AO AND/OR ASSESSEE BEYOND THE PROVISIONS OF SECTION 13 9(RETURN OF INCOME), 139(5) (REVISED RETURN OF INCOME), 147 (INCOME ESCAPING AS SESSMENT) AND 263( REVISION OF ORDERS) OF THE ACT. THE HON'BLE HIGH COURT HAS F URTHER OBSERVED THAT THE WORDS 'ASSESS'' OR 'RE-ASSESS' HAVE BEEN USED AT MORE THA N ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISI ON WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF ABATED PROCEEDINGS AND 'REASSESS' HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION A ND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED A SSESSMENTS, THE SAME CAN BE TINKERED ONLY ON THE BASIS OF THE INCRIMINATING MAT ERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. THE HON'BLE HIGH COURT WHILE REPRODUCING 6 THE PROPOSITION OF LAW LAID DOWN BY THE HON'BLE SUP REME COURT IN THE CASE OF 'K P VARGHESE V. ITO' (1981) 24 CTR 358 'THAT IT IS RE COGNIZED RULE OF CONSTRUCTION THAT A STATUTORY PROVISO MUST BE SO CONSTRUED, IF P OSSIBLE, THAT ABSURDITY AND MISCHIEF MAY BE AVOIDED' HAS OBSERVED THAT IF THE A RGUMENT OF THE COUNSEL FOR THE ASSESSEE WAS TO BE ACCEPTED, IT WOULD MEAN THAT EVEN IN CASE WHERE THE APPEAL ARISES OUT OF THE COMPLETED ASSESSMENT HAS B EEN DECIDED BY THE C1T(A) OR TRIBUNAL AND THE HIGH COURT, ON A NOTICE ISSUES U/S. 153 A OF THE ACT, THE AO WOULD HAVE POWER TO UNDO WHAT HAS BEEN CONCL UDED BY THE HIGH COURT. ANY INTERPRETATION WHICH LEADS TO SUCH CONCL USION HAS TO BE REPELLED AND/OR AVOIDED AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF K P VARGHESE (SUPRA). 13. IN VIEW OF THE FOREGOING REASONS THE ASSESSEE I S ENTITLED TO CARRY FORWARD THE BUSINESS LOSSES ONLY IF THE ASSESSMENT PROCEEDI NGS ARE ABATED IN VIEW OF THE SEARCH PROCEEDINGS. SINCE WE DO NOT HAVE THE RECORD BEFORE US PERTAINING TO THE TIME SPECIFIED BY THE ASSESSING OFFICER IN THE NOTICE TO FILE THE RETURN UNDER SECTION 153A(1)(A) AND ALSO THE FACT WHETHER ASSESS MENT PROCEEDINGS WHICH HAVE BEEN HITHERTO UNDER PROCESS WERE KEPT IN ABEYA NCE OR NOT, WE RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR AL LOWING THE CARRY FORWARD BUSINESS LOSSES AFTER VERIFICATION OF THE DATES ALL OWED IN THE NOTICE ISSUED UNDER SECTION 153A. THUS WE HOLD THAT THE ASSESSEE WOULD BE ALLOWED TO CARRY FORWARD LOSSES PROVIDED THE TWO CONDITIONS LAID DOWN BELOW ARE FULFILLED: (A) THE ASSESSEE FILED RETURN UNDER SECTION 153A(1 )(A) WITHIN THE TIME SPECIFIED IN THE NOTICE ISSUED UNDER SECTION 153A ON RECORD. (B) THE ONGOING ASSESSMENT PROCEEDINGS WERE KEPT IN ABEYANCE. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DEPARTMENTAL REPRESENTATIVE