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S.R. Chauhan, J.M.

1. As both these appeals are interrelated and involve common points, so we are disposing them of by this common order for the sake of convenience.

2. ITA No. 1650(Cal) of 1996 is an appeal by the assessee for the asst. yr. 1992-93 and is directed against the order of CIT(A), Central-I, Calcutta, dt. 18th March, 1996. ITA No. 1755 (Cal) of 1996 is an appeal by the Department for the same assessment year and against the same impugned order of the learned CIT(A).

3. The facts, relevant for the disposal of these appeals, are that the assessee-company was formerly known as Straw Products Ltd. (in short, SPL). The assessee changed its former name to the present name being M/s. J. K. Corporation Ltd. w.e.f. 17th June, 1994. The assessee filed its return of income for asst. yr. 1992-93 on 31st December, 1992, declaring total income of Rs. 23.58 crores with the claim of carried forward unabsorbed investment allowance of Rs. 2,72 crores pertaining to earlier years. Notice under s. 143(2) dt. 26th November, 1993, was issued and the assessee later filed a revised return on 31st March, 1994, declaring total loss of Rs. 152.12 crores. This loss comprised of Rs. 17.97 crores pertaining to M/s. SPL and Rs. 134.15 crores pertaining to M/s. OSL (amalgamating company). The aforesaid loss of M/s. OSL included : (i) unabsorbed business loss for earlier years, (ii) current year's business loss from 1st February, 1992 to 31st March, 1992, (iii) unabsorbed depreciation allowance for earlier years, and (iv) unabsorbed investment allowance for earlier years. In this revised return the assessee claimed that M/s. OSL being a sick company amalgamated with the assessee w.e.f. 1st February, 1992, under the order dt. 25th January, 1994, passed by the Board for Industrial and Financial Reconstruction (in short BIFR) read with addendum order dt. 17th March, 1994 by BIFR and declaration by BIFR dt. 17th March, 1994, under s. 72A(1) of the IT Act, 1961. The assessee also filed on 8th August, 1994, a certificate dt. 15th June, 1994 issued by BIFR under s. 72A(2)(ii) of the IT Act along with its letter dt. 6th August, 1994. The assessee filed a second revised return on 6th March, 1995, along with a copy of certificate dt. 15th June, 1994 under s. 72A(2)(ii) of the IT Act issued by the BIFR declaring total loss of Rs. 123.34 crores of the amalgamating company M/s. OSL. The AO however held that this second revised return was filed after the expiry of the statutory time limit and so ignored the same. The AO passed the assessment order under s. 143(3) wherein he disallowed the assessee's claim of loss and unabsorbed depreciation and unabsorbed investment allowance of M/s. OSL. The AO disallowed the assessee's claim under s. 72A for set off as also for carry forward of the aforesaid loss and disallowances of the amalgamating company M/s. OSL. The AO also held that the first revised return filed on 31st March, 1994, was beyond the time stipulated under s. 139(1). Accordingly the AO disallowed the set off or carry forward in view of s. 80 r/w s. 139(3) of the IT Act. The AO also observed that there was no declaration by the Central Government under s. 72A(1). He also observed that the amalgamation cannot be made operative w.e.f. 1st February, 1992 in view of the order of BIFR fixing the aforesaid date having been passed on 25th January, 1994. He also observed that the consent of the Central Government had not been taken in accordance with Circular No. 683 dt. 8th June, 1994. The AO also observed that the conditions of s. 72A(2) were not complied with inasmuch as the business of amalgamating company M/s. OSL was not carried on by the assessee during the relevant previous year as the amalgamation order itself was passed by BIFR on 25th January, 1994, and so the certificate of BIFR under s. 72A(2) also could not be issued, and that the said certificate was not filed along with return as required under s. 72A(2)(ii). In the assessee's first appeal, the learned CIT(A) agreed with the finding of the AO to the effect that : (i) amalgamation could not be effective from 1st February, 1992, that is, during the previous year relevant to the asst. yr. 1992-93, (ii) that the benefit under s. 72A cannot be claimed as no notice was given to the Central Government or the Board, and that the Circular No. 683, dt. 8th June, 1994, was binding on AO (iii) that the requirement of s. 72A(2)(i) was not complied with inasmuch as the assessee, in fact, did not carry on the business of the amalgamating company (OSL) during the relevant previous year ended 31st March, 1992, since the order of BIFR was passed only on 25th January, 1994. The learned CIT(A) however disagreeing with the AO held that the revised return filed on 31st March, 1994, claiming the loss was valid and was not affected by the provisions of s. 139(3)/80 since the original return showing profit was filed within time. He also held that the relief under s. 72A could not be denied to the assessee on the ground that the certificate of BIFR under s. 72A(2)(ii) was not filed with the return, since the filing of the said certificate along with the assessee's letter dt. 6th August, 1994 was a valid compliance. He also held that declaration by BIFR is by the Central Government under s.72A(1) in view of s. 32(2) of Sick Industrial Company (Special Provisions) Act, 1985 (in short, SICA).

33. The learned Departmental Representative of Revenue has contended that return of loss may be filed within time prescribed under s. 139(1) of IT Act, and if the same is filed beyond that time, then that is not a valid return of loss under s. 139(1), so there can be no carry forward of loss. He has contended that the provisions may not be construed with reference to their reasonableness unless they are ambiguous of capable of two interpretations, if they are clear and not admitting of two interpretations, then their plain meaning is to be given effect to. Referring to ss. 139(3) and 80 of IT Act, the learned Departmental Representative has contended that the only benefit denied is regarding carrying forward of loss, and the legislature has not prohibited set off of determination of correct income of the year. Referring to s. 139(5) of the IT Act he has contended that the two returns filed in March, 1994, and March, 1995, are not revised returns under s. 139(5). He has contended that these two returns are neither under s. 139(3), nor under s. 139(5), nor under s. 139(1). As against this the learned Authorised Representative of the assessee has contended that if a section is to be construed, it is to be construed harmoniously, and as the section as a whole, and not its different parts or sub-sections separately/independently. So s. 139 is to be construed as a whole. He has contended that s. 139(1) comes into play when income exceeds particular amount, and so it does not operate here. There is no statutory obligation under s. 139(1) to file return unless income exceeds maximum exempted limit. So when loss is there, s. 139(3) is in substitution of s. 139(1). He has contended that under s. 139(5) there is no limit for revenue, and the revenue may be either way i.e., from return of income to loss return or vice versa. He has contended that s. 139(3) per se will not apply in assessee's case as assessee's income does not exceed maximum amount, but original return having been filed in time, the revised return filed on 31st March, 1994, would relate back to the original return, and so there can be no question of non-compliance of s. 139(3), and the assessee's revised return (return of loss) filed on 31st March, 1994, is a valid return. The learned Authorised Representative of the assessee has also contended, in the alternative, that BIFR has, vide its order dt. 17th March, 1994 (placed on p. 68 of paper-book I) exempted assessee from the application of provisions of ss. 80 and 139 of IT Act, 1961, for filing/revising the IT returns, and so also the revised return of loss filed by assessee shall be treated as valid returns of loss irrespective of anything inconsistent therewith being therein s. 80 and ss. 139 of the IT Act.