2010 (1) TMI 950 - HC - Income Tax

Whether assessee is eligible to carry forward share of loss from the association of persons, although the association of persons had filed its return beyond the time prescribed under section 139 of the Act Held that - Last date for filing the return not provided in this case to claim that the request for extension of time was made after the said date assumption is that application for extension was filed and that was granted and the association of persons had filed the return within the extended period - in favour of the assessee

Summary

Issues:
1. Entitlement to carry forward share of loss from the association of persons.
2. Validity of filing the return within the extended period granted by the Assessing Officer.

Entitlement to Carry Forward Share of Loss:
The case revolved around the eligibility of the assessee to carry forward the share of loss from the association of persons (AOP) for the assessment year 1986-87. The Assessing Officer initially denied the claim, stating that the AOP did not file the return within the prescribed time under section 139(1) of the Act. However, the Commissioner of Income-tax (Appeals) disagreed, noting that the AOP had indeed filed the return within the extended period granted by the Assessing Officer. The Tribunal also upheld this finding. The appellant-Revenue challenged this decision, arguing that the extension granted was invalid, and therefore, the assessee should not be allowed to carry forward the loss. However, the High Court refused to entertain this argument, emphasizing that the filing within the extended period should be considered valid.

Validity of Filing Within Extended Period:
The appellant-Revenue contended that the Assessing Officer had no authority to grant an extension of time for filing the return beyond the prescribed period. They argued that even if the AOP filed the return within the extended period, it should not be considered valid. The High Court, after careful consideration, rejected this argument. They highlighted that the issue of whether the extension was valid or not was not raised before the Commissioner of Income-tax (Appeals) or the Tribunal. Additionally, the High Court noted that without specific details regarding the last date for filing the return, it was inappropriate to question the validity of the extension granted. Therefore, the High Court upheld the decision of the lower authorities, affirming the validity of filing the return within the extended period.

In conclusion, the High Court dismissed the tax case (appeal) filed by the Revenue, ruling in favor of the assessee. They found no merit in the substantial question of law raised by the Revenue and upheld the decision allowing the assessee to carry forward the share of loss from the AOP. The judgment emphasized the importance of considering the validity of filing within the extended period granted by the Assessing Officer and declined to entertain arguments challenging the extension after it had been accepted by the lower authorities.