1985 (5) TMI 109 - AT - Income Tax

Summary

Issues:
- Dispute regarding the assessee's claim for the benefit of set off of carry forward business loss.
- Interpretation of section 139(3) of the Income Tax Act regarding the filing of returns for carry forward of losses.

Analysis:
The judgment by the Appellate Tribunal ITAT Jaipur involved two appeals against a common order of the AAC concerning the assessee's claim for the benefit of set off of carry forward business loss. The ITO had denied this benefit based on directions from the IAC under section 144A, citing that the return of income for the earlier year was filed beyond the time prescribed by section 139(1). However, the AAC opined that the determined loss had to be carried forward and set off as per the IT Act provisions, leading to the Revenue appealing the decision.

During the proceedings, the Department's representative argued that the language of section 139(3) was clear and did not allow for the carry forward of losses if the return was not filed within the prescribed time. Various High Court decisions were cited in support of this interpretation, emphasizing that clear statutory language should not be subject to different interpretations. However, the Tribunal noted that several High Courts had already interpreted section 139(3) differently in various cases, including the benefit of carry forward of losses even when the return was filed within the time prescribed in section 139(4) of the IT Act.

The Tribunal referenced multiple authorities, such as CIT vs. Kulu Valley Transport Co. Pvt. Ltd. and other High Court decisions, which supported the view that the benefit of carry forward of losses should be available to the assessee even if the return was filed within the extended time under section 139(4). Given the consistent interpretation by different courts on this issue, the Tribunal concluded that it was not appropriate to deviate from the established position. Therefore, the appeals were dismissed, affirming the assessee's right to the benefit of carry forward of losses even when the return was filed within the prescribed time frame.