Section 291 — Intimation of loss. Successor to s.157 of the 1961 Act.
Section 291 is in Chapter XVI — Procedure for Assessment, which runs from section 268 to section 301.
A single obligation on the Assessing Officer. Where, in the course of assessing an assessee's total income, it is established that a loss has taken place, and the assessee is entitled to have that loss carried forward and set off under section 111(1), 112, 113(2) or 115(1), the Assessing Officer must notify the assessee, by an order in writing, of the amount of the loss as computed by him for the purposes of those sections.
A loss is an asset that is used in a later year, and the assessee needs to know in writing what figure the Department has accepted before that year arrives. Requiring an order in writing fixes the amount and the year, so the carry forward is not left to be argued about when it is finally set off.
Two conditions must both hold before the duty arises: it must be established in the course of assessing total income that a loss has taken place, and the assessee must be entitled to carry it forward and set it off under one of the four named provisions. The figure notified is "the amount of the loss as computed by him", which need not be the loss the assessee returned — the order records the Department's computation, which is what will be available in later years. Because it is an order in writing, it is a document the assessee holds rather than an internal note.
An individual's assessment for a tax year establishes a business loss, and the assessee is entitled to carry it forward under section 111(1). The Assessing Officer computes the loss at Rs. 18 lakh against the Rs. 22 lakh returned. He must notify Rs. 18 lakh to the assessee by an order in writing, and it is that figure that is available for carry forward and set off in the later year.
You meet it as a written order notifying the loss, issued alongside or as part of the assessment for a loss year — the document to keep, because it states the amount the Department will allow to be carried forward.
shall notify to the assessee by an order in writing the amount of the loss as computed by him
See the full 1961 to 2025 concordance.