ORDER
V.P. Elhence, Judicial Member
1. These two appeals, filed by different assessees, arise out of separate orders, both dated 30-9-1985, of the learned Appellate Asstt. Commissioner, Dehradun for the assessment year 1981-82. Since the point raised in both the appeals as also the facts are common, these appeals are being disposed of, for the sake of convenience, by one common order.
2. The assessees who are individuals, are partners in the registered firm M/s Bishambhar Sahai Surender Kumar, Roorkee having 50% share each. For the assessment year 1978-79 the said firm was assessed at a loss of Rs. 60,000 which was allocated between the two partners in equal shares i.e. at Rs. 30,000 each. Similarly for the assessment year 1979-80 the said firm was assessed at a loss of Rs. 90,000 and the loss was allocated equally between the two partners i.e. @ Rs. 45,000 each. For the assessment year 1980-81, however, the said firm was assessed at a positive income of Rs. 22,670. Since it was the case of a registered firm the losses suffered by it for the assessment years 1978-79 and 1979-80 could not be carried forward and set off as the provisions of Section 75(2) came in the way. It is an admitted case that for the assessment years 1978-79 and 1979-80 for which the losses were apportioned between the two partners from the firm, the partners did not file any returns within the time allowed by Section 139. The returns were filed on 15-3-1983 only which were no returns in the eyes of law. For the assessment year 1981-82 in question, both the assessees claimed set off of the amounts of Rs. 65,221 each representing unabsorbed business loss of the aforesaid earlier years. However, the Income-tax Officer noticed that no unabsorbed brought forward business loss of earlier years had been determined in the case of either of these assessees. Accordingly, he refused to allow the set off claimed.
3. The matter was, therefore, taken up by the assessees in first appeal before the Appellate Asstt. Commissioner. The case of the assessees before the learned AAC was that the Income-tax Officer was bound to carry forward and adjust the aforesaid loss because the same had been duly determined in the case of the firm. However, the learned Appellate Asstt. Commissioner did not accept the assessees’ submissions. He also relied upon the decision dated 2-8-1984 of Nagpur Bench of the Appellate Tribunal in the case of Anantlal Singhee v. ITO [1985] 11 ITD 263.
3.1 In the appeals before us Shri H.G. Malik the learned counsel for the assessees reiterated the contentions put forward on behalf of the assessees before the Income-tax authorities. He also referred to the provisions of Sections 67(4), 70, 80, 139, 158 and 182(2). Reliance was also placed by him on the opinions expressed in the following two articles:
(1) Article by Shri V.S. Ashok Kumar. (2) Article by Shri K.N. Balasubramanian.
He submitted that in the case of a partner in a registered firm, his right to have his share of loss from the firm set off and carried forward in his own case arises from the registered firm’s assessment determining the loss and apportioning it among the partners and that neither the filing of a loss return under Section 139(3) by the partner nor a fresh determination of the loss in his own assessment as per Section 80 is necessary. He also reiterated the view taken by Shri Balasubramanian in his article that when the partner has no income of his own, there is no need at all to file a return and to have assessment made for having the share of loss set off against his share of profit in a later year. According to him, it is only when he has other incomes that he has to file a return and have an assessment made not for determining the loss but for having the share of loss first set off against his other income and carrying forward the balance. Lastly, Shri Malik submitted that in case two views were possible on the subject, the view in favour of the assessee had to be taken, on the basis of the well known decision of the Supreme Court in the case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192. On the other hand Shri D.K. Sharma, learned Departmental Representative strongly relied upon the orders of the Income-tax authorities. Additionally he placed reliance on the principle underlying the decision of the Hon’ble Calcutta High Court in the case of Katihar Match Works (1954) (P.) Ltd. v. CIT [1975] 99 ITR 251.
4. We have considered the rival submissions as also the decisions referred to above. Chapter VI of the Income-tax Act, 1961 contains Sections 66 to 80. Section 80 is the section which prescribes the procedure for the set off of brought forward losses. For the assessment year in question Section 80 stood in the following terms :
Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed under Section 139 shall be carried forward and set off under Sub-section (1) of Section 72 or Sub-section (2) of Section 73 or Sub-section (1) of Section 74 or Sub-section (3) of Section 74A.
The set off claimed by the assessees in the present case was one which fell under Section 72. Section 80 opens with a non-obstante clause and therefore, its provisions could not be diluted or whittled down by any of the provisions contained in Sections 66 to 79. Section 80 firstly required that there should have been a return filed under Section 139 and secondly that the loss should have been determined in pursuance of the said return. It is only if both these conditions satisfied were that the assessees could justifiably claim the set off of the losses. In the present cases none of these two requirements was admittedly satisfied. Therefore, Section 80 came in the way of the assessees. It may be that the opinions expressed by the authors on whose articles the assessees have placed reliance were different, but that would not affect the position pointed out by us above. In fact in the article of Shri K.N. Balasubramanian the decision of Nagpur Bench of the Appellate Tribunal has been referred to but a view contrary to the same has been taken. In fact at one stage Shri Malik for the assessee also submitted to us that we should consider the reference of the matter for the decision of a larger bench. However, in view of what has been stated above and since our view is also the same as had been taken by the Nagpur Bench, we do not consider that such a course of action is necessary. In that case supra the assessee derived share income from a firm of which he was a partner. In the course of the assessment proceedings for 1980-81 the assessee claimed set off in respect of share of loss from the firm for the assessment years 1977-78 and 1979-80. The claim was rejected by the Income-tax Officer as the assessee had not filed any return of income for those years and no loss had been determined in pursuance of the same. In appeal the Appellate Asstt. Commissioner upheld the order of the Income-tax Officer. In second appeal it was held by the Appellate Tribunal that for the assessee to claim set off of loss, he had to file a return within the time allowed under Section 139(1) and that when no return was filed, Section 80 operated as a statutory bar against any loss being considered for being set off in a subsequent assessment. The facts in that case were exactly similar to the facts of the present cases and therefore, we would respectfully follow the said decision. In the case of Katihar Match Works (1954) (P.) Ltd. (supra) the assessee had filed a loss return beyond the time prescribed under the Indian Income-tax Act, 1922. The Income-tax Officer held that the assessee’s claim to get the loss determined was barred under Section 22(2A) and that there was no obligation on him to complete the assessment in such an event and he dropped the proceedings. The appeal filed by the assessee against that order was dismissed by the learned AAC holding that there could be no appeal against such an order. The order of the AAC was confirmed in second appeal by the Appellate Tribunal. In the High Court it was held that the order of the Income-tax Officer could not be considered as a computation of an amount of loss at nil and that the true effect of that order was that there had been no determination of the loss by the Income-tax Officer and therefore, the order was not appealable. The principle underlying this decision therefore, is that when no return of loss is filed within the prescribed time by an assessee, no loss can be said to have been determined in terms of Section 80 and therefore, no set off can be claimed. Since we have clearly held that this is not a case wherein two views were possible and that the assessees were clearly disentitled to claim the set off of the loss under the plain meaning of Section 80, the principle underlying the decision of the Supreme Court in the case of Vegetable Products Ltd. (supra) cannot be attracted to the advantage of the assessee. The result is that both these appeals must fail and be dismissed.
5. The appeals are accordingly dismissed.