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Treatment of a belated return filed under sections 139(3) and 139(10) of the Income-tax Act. Analysis: The judgment concerns the treatment of a belated return filed on July 31, 1987, under sections 139(3) and 139(10) of the Income-tax Act. Section 139(3) allows for the carry forward of losses under specified circumstances, while section 139(10) states that a return of income below the taxable limit shall be deemed never to have been furnished unless certain exceptions apply. The relevant circular, Circular No. 469, dated September 23, 1986, clarifies the application of these sections and amendments. The circular emphasizes the importance of filing returns within the prescribed period for the benefit of carry forward of losses, as outlined in section 139(3). It also highlights that returns below the taxable limit should be considered unless falling under specific exceptions listed in the circular. The court noted that the amendment to section 139(3) came into effect from April 1, 1987, and the amendment to section 139(10) was introduced on April 1, 1986. The circular further explains that the amended provisions require returns of loss to be filed within the specified period to avail benefits such as carry forward under the relevant sections. It clarifies that a return of loss filed after the specified deadline shall be deemed never to have been furnished, unless falling under specific exceptions. The amendments were applicable from April 1, 1987, for the assessment year 1987-88 and subsequent years. In the case at hand, the Deputy Commissioner of Income-tax treated the belated return filed for the assessment year 1986-87 as never having been furnished, based on section 139(10) of the Act. However, the court, upon appeal, found that the assessing authority failed to consider the return in light of the circular and the specific circumstances of the case. The court emphasized that the requirement to file within the prescribed period is primarily for the benefit of carry forward of losses. Since the appellant did not seek this benefit, the court directed the assessing authority to consider the belated return filed on July 31, 1987, without the consideration of carry forward benefits. The court allowed the writ appeal, set aside the previous order, and remitted the matter to the Deputy Commissioner to deal with the return in accordance with the law, excluding the consideration of carry forward benefits.
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