Simple interest at 12% p.a if a return is filed after the specified date. - Income Tax - 1528/CBDT

INSTRUCTION NO. 1528/CBDT Dated: September 20, 1983 Section(s) Referred: 139(3) Statute: Income - Tax Act, 1961 Kindly refer to Board's instruction No. 210 (F.NO. 208/9/70-ITA-II, dated the 28th August, 1970) on the above subject. In the said instruction, it was stated that in view of the Supreme Court's decision in the case of C.I.T.Vs. Kullu Valley Transport Company Private Ltd., the loss returns should be accepted even though they were filed beyond the time limit referred to in section 139(3) of the Income-tax Act. It was clarified in the said instruction that the Supreme Court's decision would apply in respect of cases coming under the Income-tax Act, 1961. 2. However, the position has since changed because of the amendments introduced under the Income-tax Act, 1961. Under the 1922 Act, the Supreme Court held that a return filed u/s 22(3) must be considered as having been filed within the time prescribed i.e. a return filed u/s 22(3) should be treated as a return u/s 22(1) as there was no provision for levying interest in respect of cases where the return is filed within the extended period of time. However, u/s 139(8) (a) of the I.T.Act, if a return is filed after the specified date, the assessee is liable to pay simple interest at 12% p.a. Therefore, the Supreme Court held a return filed u/s.139(4) of the I.T.Act cannot be deemed to have been filed within the period originally prescribed by the statute, although it is a valid return. Since this position has now changed consequent upon the amendment introduced by Taxation Laws Amendment Act, 1970, it is clarified that in case a loss return is not filed within the time prescribed u/s.139(3), the assessee will not be entitled to the benefit of carry forward of loss. The above instructions may please be brought to the notice of the Officers working under you.