1992 (1) TMI 185 - AT - Income Tax

Summary

Issues:
1. Allowance of carry forward of business loss under section 139(2)
2. Interpretation of return filed in response to notice under section 148
3. Applicability of judgments from Madhya Pradesh and Calcutta High Courts

Analysis:

1. The appeal was filed by the Revenue against the order of the CIT(A) for the assessment year 1983-84, where the assessee had not filed a return under section 139(1) but filed it after a notice under section 148. The assessment determined a net loss, which the Revenue did not allow to be carried forward for set off. The CIT(A) allowed the carry forward based on a Board's Circular, stating that the return should be considered as filed under section 139(2) due to the reassessment under section 147.

2. The Revenue contended that the CIT(A) erred in allowing the carry forward, arguing that the return filed in response to a notice under section 148 cannot be considered as filed under section 139(2). They highlighted that section 80 only extends the benefit of carry forward and set off to losses determined from a return filed under section 139. The assessee's counsel cited judgments from the Madhya Pradesh and Calcutta High Courts to support their case.

3. The Tribunal analyzed the situation, noting that the return was filed within the time allowed under section 139(4) after the notice under section 148. Referring to judgments from the Calcutta and Madhya Pradesh High Courts, the Tribunal upheld the CIT(A)'s decision, stating that when a return filed in response to a notice under section 148 is within the time allowed under section 139, the assessee is entitled to carry forward and set off the loss. Following the precedent, the Tribunal dismissed the Revenue's appeal, affirming the allowance of carry forward of the business loss for the assessee.