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Issues:
1. Denial of claim of carry forward and set off of business loss. Detailed Analysis: The assessee, a limited company owning a cotton textile mill, filed its return for the assessment year 1985-86 on 26th Dec., 1985, declaring a loss of Rs. 2,96,36,730. The Assessing Officer computed the loss at Rs. 1,25,35,993 and refused to allow it to be carried forward as the return was not filed before the specified deadline. The CIT(A) upheld this decision, stating that as per the provisions of s. 80, the assessee was not entitled to carry forward the loss. The CIT(A) also noted that the reasons given by the assessee for seeking extensions were not valid, as there was sufficient time available to file the return by the deadline. The assessee appealed to the Tribunal challenging the denial of the claim for carry forward and set off of the business loss. The learned counsel for the assessee argued that under s. 80 of the IT Act, the Assessing Officer did not have the authority to declare that the determined loss would not be allowed to be carried forward. The counsel relied on a Supreme Court decision and a Tribunal decision to support this argument. The counsel further contended that there was a reasonable cause for the delay in filing the return, citing financial distress and staff shortages within the company. The counsel also argued that the Assessing Officer should have considered the applications for extension of time judiciously. The Departmental Representative, on the other hand, supported the Revenue authorities' orders, stating that applications for extension filed beyond the deadline cannot be considered. The Tribunal considered the submissions and facts presented. It noted that the accounts had been finalized, the audit completed, and the annual general meeting held well before the extended deadline for filing the return. The Tribunal found that the Assessing Officer was justified in rejecting the application for further extension of time as there was sufficient time available to file the return within the allowed period. The Tribunal also dismissed the argument that the non-initiation of penalty proceedings indicated a reasonable cause for the delay, as there was no assessed tax due to the loss. Regarding the Assessing Officer's decision to disallow the carry forward of the loss, the Tribunal held that the observations made by the Assessing Officer were not binding on the assessee. The Tribunal cited a Supreme Court decision, stating that it would be open to the Assessing Officer in the subsequent year to determine whether the loss could be set off against profits. In conclusion, the Tribunal dismissed the appeal filed by the assessee, subject to the observations made regarding the Assessing Officer's decision on the carry forward of the loss.
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