1993 (2) TMI 118 - AT - Income Tax

Summary

Issues:
1. Dispute over the claim of carry forward of business loss on a belatedly filed return.

Analysis:
The judgment involves a dispute regarding the carry forward of business loss by an assessee-company. The Assessing Officer initially disallowed the carry forward of business loss of Rs. 54,726 as the return was filed late. The CIT (A) allowed the carry forward based on the assessee's submissions regarding the extension of time for filing the return. The Departmental Representative argued that the benefit should only be available if the time was actually allowed by the Assessing Officer, emphasizing the timeline of the extension applications filed by the assessee.

The Tribunal considered the conflicting arguments and referred to a decision of the Hon'ble Gujarat High Court in Gordhanbhai Jethabhai's case. The Tribunal highlighted two key aspects of the decision. First, it emphasized the duty of the Assessing Officer to entertain and decide on applications for extension of time, applying this principle to the case at hand. Second, it discussed the presumption or reasonable belief of the assessee regarding the grant of extensions by the Assessing Officer. The Tribunal noted that if the Assessing Officer failed to act on the applications for extension, the assessee could presume that the time had been granted.

However, the Tribunal pointed out that this presumption would not apply to periods not covered by extension applications. In this case, there was a 40-day period where the presumption could not be extended to the assessee. The Tribunal clarified that the Assessing Officer's action on the second extension application was crucial for determining the carry forward of business loss. Therefore, the Tribunal directed the matter to be restored to the Assessing Officer for a decision on the extension application filed by the assessee.

Ultimately, the Tribunal partially allowed the Department's appeal for statistical purposes, highlighting the importance of the Assessing Officer's decision on the extension application for the carry forward of business loss.