2002 (7) TMI 43 - HC - Income Tax

Application For Extension Of Time for filing the return- once the assessee has applied for extension of time on Form No. 6 and if at application has not been disposed of or rejected, the presumption will be that the time has been extended and if the assessee has filed the return on or before the extended time prayed for, the return shall be taken to be filed on or before the due date. In this case, when the application has been submitted for extension of time on June 28, 1985, and that has not been rejected, it shall be presumed that the time has been extended till September 30, 1985, and, in this case, admittedly, the returns are filed on August 5, 1985, therefore, it cannot be said that the returns are not filed on or before the due date. - In our view, the Tribunal has committed an error in disallowing the claim of the assessee holding that the returns are not filed on or before the due date.

Summary

Issues:
Whether the assessee-company was entitled to carry forward a loss computed for the assessment year 1985-86.

Analysis:
The case involved a limited company that applied for an extension of time to file its return, which was due on June 30, 1985. The company claimed a loss of Rs. 25,82,740, but the assessment only computed a total loss of Rs. 9,71,561. The Income-tax Officer refused to allow the carry forward of the determined loss due to the late filing of returns. Both the Commissioner of Income-tax (Appeals) and the Tribunal upheld this decision. The main argument presented was that since the returns were filed before the extended deadline of September 30, 1985, the company should be allowed to carry forward the losses.

The counsel for the assessee contended that once an application for extension of time is submitted before the Assessing Officer and not rejected, the time is presumed to be extended. Referring to the decision of the Calcutta High Court, it was argued that if the return is filed before the extended time sought, it should be considered as filed on or before the due date. The court noted that the application for extension was submitted on June 28, 1985, and the returns showing the loss were filed on August 5, 1985, before the extended deadline of September 30, 1985. The court emphasized the presumption that time is extended if the application is pending and not rejected.

The court criticized the Tribunal for disallowing the claim of the assessee based on the returns not being filed on or before the due date. It highlighted the consistent view of various High Courts that if an application for extension is not rejected, the time is presumed to be extended. Since the returns were filed before the extended deadline, the court ruled in favor of the assessee, stating that the Tribunal erred in its decision. Consequently, the question was answered in the negative, favoring the assessee and against the Revenue. The reference was disposed of accordingly.