Law: Income Tax Act, 1961

Section: 143(1),239

Income-tax---Assessment---Loss---Return disclosing loss and claiming carry forward of loss---Rejection of return ---Assessee must be given opportunity to be heard before such rejection---Indian Income Tax Act, 1961, S.143---Constitution of India, Art.226. Under section 143(1) of the Income Tax Act, 1961, there is an obligation, on the part of the Assessing Authority to make an assessment of the total income or loss of the assessee after making such adjustment to the income or loss declared in the return. Under subsection (2), where a return has been made under section 139 and an assessment having been made under subsection (1), if the assessee makes within one month from the date of service of the notice of demand issued in consequence of such assessment, an application to the Income-tax Officer objecting to the assessment, or whether or not an assessment has been made under subsection (1), if the Income-tax Officer considers it necessary or expedient to verify the correctness and completeness of the return by requiring the presence of the assessee or the production of evidence in this behalf, the Income-tax Officer shall serve or: the assessee a notice requiring him to attend at the Income-tax Officers office or to produce, or cause to be produced any evidence on which the assessee may rely. For the assessment. year 1986-87, which was the first year of assessment, the assessee filed a loss return before the Income-tax Officer ,declaring a total loss of Rs.1,11,248 comprising unabsorbed depreciation of Rs.34,201 and unabsorbed investment allowance of Rs.77,047. It was states that the petitioner also claimed carry. forward of such loss to the following assessment year. For the assessment year 1987-88, the petitioner filed a loss return on December 22,1987, claiming an aggregate loss of Rs.1,39,631 comprising Rs.1,11,248 being loss carried forward from the assessment year 1986-87, unabsorbed depreciation for the relevant year of Rs.23,118 and share of loss from other partnerships Rs.5,265. It was further stated that the petitioner claimed that the aggregate loss of Rs.1,39,631 be carried forward to the following assessment year to be set off against the income,…

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