1984 (7) TMI 119 - AT - Income Tax

Summary

Issues:
1. Validity of the return filed by the assessee within the extended time frame.
2. Applicability of provisions under section 139(3) and 139(4) of the Income-tax Act, 1961.
3. Direction for carry forward of business loss computed by the Income Tax Officer (ITO).

Analysis:
The appeal before the Appellate Tribunal ITAT CALCUTTA-A pertained to the assessment year 1979-80, with two main grounds raised by the department. Firstly, the department challenged the direction given by the Commissioner (Appeals) to carry forward the business loss computed for the said year. Secondly, the department contended that the provisions of section 139(3) of the Income-tax Act, 1961 were not applied by the Commissioner (Appeals).

For the assessment year in question, the assessee filed Form No. 6 seeking an extension of time for filing the return, which was eventually filed on 31-12-1979, declaring a loss. The ITO computed the business loss but did not pass any order for carry forward. The Commissioner (Appeals) directed the ITO to carry forward the business loss based on a decision of the Calcutta High Court in a similar case.

The departmental representative argued that the return filed by the assessee may not be considered valid under section 139(1) or 139(4) of the Act. However, the authorized representative of the assessee contended that the return was valid either due to an implied extension of time by the ITO or under section 139(4), citing precedents and interpretations of relevant provisions.

The Tribunal analyzed the contentions and facts presented. It noted that the ITO did not pass any order on the application for extension of time, leading to the deemed extension of time as prayed for by the assessee. Referring to a Bombay High Court decision, the Tribunal held that in such cases, the return filed within the extended time frame should be treated as valid under section 139(1).

Even if the time extension was not deemed, the Tribunal found that the return would still be valid under section 139(4). Citing the Calcutta High Court decision in Presidency Medical Centre (P.) Ltd.'s case, the Tribunal emphasized that once a return is filed within the time specified in section 139(4), it must be considered valid, and the loss should be determined and carried forward as per relevant provisions.

Regarding the department's reliance on a Supreme Court decision in a different context, the Tribunal clarified that the observations made did not support the contention that the business loss computed by the ITO cannot be carried forward in the case at hand. Consequently, the Tribunal upheld the direction of the Commissioner (Appeals) to carry forward the business loss, leading to the dismissal of the departmental appeal.