1991 (1) TMI 179 - AT - Income Tax

Summary

Issues:
1. Extension of time for filing returns due to disturbed conditions and curfew in Gujarat.
2. Disallowance of carrying forward loss by Income-tax Officer.
3. Interpretation of Circular of C.B.D.T regarding filing of returns.
4. Applicability of General Clauses Act, 1897 in determining the filing deadline.

Analysis:
1. The appeal pertains to the assessment year 1985-86, where the assessee, a company in which the public is substantially interested, declared a total loss in the return of income. The Income-tax Officer disallowed the carry forward of the loss as the return was filed after the deadline specified under section 139(1) of the Act, despite a circular by the C.B.D.T allowing an extension due to disturbed conditions and curfew in Gujarat.

2. The CIT(A) upheld the Income-tax Officer's decision, stating that the return should have been filed before the original deadline to avail the benefit of the circular. However, the Tribunal found that the principle of section 10 of the General Clauses Act, 1897 applied in this case. The Tribunal reasoned that since the return was filed on the next working day after the holidays of 31-8-1985 and 1-9-1985, it should be considered as filed within the extended time allowed by the Board.

3. The Tribunal emphasized that the circular's intent was to provide relief to assessees affected by the disturbances and curfew, and the failure to file Form No. 6 seeking an extension was deemed irrelevant in light of the circumstances. The Tribunal concluded that the return filed on 2-9-1985 should be considered as filed within the extended deadline specified by the Board, thereby satisfying the conditions for carrying forward the loss under section 80 of the Act.

4. In light of the above analysis, the Tribunal allowed the appeal, setting aside the Income-tax Officer's direction and directing that the loss determined by the Officer should be allowed to be carried forward in accordance with the law. The Tribunal's decision highlights the importance of considering the practical implications and intent behind statutory provisions and circulars in tax assessments.