1986 (7) TMI 167 - AT - Income Tax

Summary

Issues:
1. Validity of returns filed by the assessee after the prescribed period under s. 139(1) of the IT Act.
2. Entitlement of the assessee to carry forward losses despite filing returns late.
3. Interpretation of sub-sections (1), (2), (3), and (4) of s. 139 of the IT Act.
4. Applicability of judicial decisions in determining the validity of returns and entitlement to carry forward losses.

Analysis:

1. The Appellate Tribunal ITAT CUTTACK dealt with departmental appeals against orders of the AAC of IT concerning the validity of returns filed by the assessee after the prescribed period under s. 139(1) of the IT Act. The AAC allowed the carry forward of losses despite the late filing of returns by the assessee.

2. The key contention was whether the returns filed by the assessee after the prescribed period under s. 139(1) were valid for the purpose of carrying forward losses. The departmental representative argued that sub-section (3) of s. 139 required returns to be filed within the specified time to claim the benefit of carrying forward losses. However, the assessee relied on the judgment in CIT vs. Kulu Valley Transport Co. Ltd., emphasizing that a return filed within the time prescribed under s. 139(4) showing losses is valid.

3. Upon considering the submissions, the Tribunal found that the issue was settled by judicial precedents, including the judgment in CIT vs. Kulu Valley Transport Co. Ltd. The Tribunal highlighted that s. 139(3) did not impose an additional burden on the assessee but clarified the provisions of s. 139(1) regarding the filing of returns to claim loss determination. The Tribunal emphasized that a return filed within the time prescribed under s. 139(4) is valid, entitling the assessee to carry forward losses.

4. The Tribunal further discussed the significance of s. 139(3) in relation to the interpretation of s. 139 as a whole. It noted that the construction of s. 139(3) did not render it otiose but rather provided clarity on the procedure for claiming the benefit of carrying forward losses. The Tribunal dismissed all appeals and cross objections, affirming the validity of returns filed by the assessee after the prescribed period under s. 139(1) for the purpose of carrying forward losses.

5. Ultimately, the Tribunal dismissed all appeals and cross objections, upholding the assessee's entitlement to carry forward losses despite filing returns late, in line with the interpretation of s. 139 of the IT Act and relevant judicial decisions.