1991 (9) TMI 150 - AT - Income Tax

Summary

Issues:
1. Whether a return of loss filed under section 139(1) can be entertained and the loss carried forward to subsequent years despite being filed belatedly.
2. Whether the failure to serve notice under section 139(2) allows for the return to be deemed voluntary and accepted.
3. Whether the extension of time granted by the assessing officer for filing the return of loss should be considered valid.
4. Whether the amendment to section 80 made by the Taxation Laws (Amendment) Act, 1984 affects the entitlement to carry forward losses.

Analysis:
1. The appeal by the revenue contested the CIT(Appeals) decision to carry forward the loss despite a belated return filing. The CIT(Appeals) held that the return, filed under section 139(1), must be entertained and the loss carried forward. The assessing officer did not scrutinize the accounts to determine losses, leading to the deemed acceptance of the loss return by the assessee. The CIT(Appeals) relied on section 80 of the IT Act, 1961 to support this decision.

2. The assessee argued that the return was filed before receiving intimation on the extension of time, and in the absence of notice under section 139(2), the loss should be carried forward. The absence of a notice under section 139(2) was deemed significant in establishing the voluntary nature of the return and acceptance of the loss.

3. The Departmental Representative contended that the amendment to section 80 in 1984 impacted the entitlement to carry forward losses, emphasizing the necessity of filing under section 139(1). However, the CIT(Appeals) decision was supported by the learned counsel, emphasizing the validity of the return filed under section 139(1) for carrying forward the loss.

4. The Tribunal upheld the decision of the CIT(Appeals) based on legal provisions under section 139(3) and previous judicial rulings. The Tribunal highlighted that the extension of time granted by the assessing officer should be considered valid until communicated otherwise. The reasons for seeking extensions, such as completing internal audits as required by the Co-operative Societies Act, were deemed justifiable, leading to the dismissal of the appeal and upholding the order of the CIT(Appeals).