9911796707
TMI Blog1994 (7) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ral of India under section 619(2) thereof. Its accounts have also got to be audited by an accountant under section 44AB of the Income-tax Act, 1961 ("the I.T. Act"). As I indicated earlier, the petitioner has been making losses, and its loss in the financial year 1985-86 corresponding to the assessment year 1986-87 was Rs. 1,42,86,624. An assessee who claims to have the loss sustained by it carried forward to any subsequent year has to file a return under sub-section (3) of section 139 of the Income-tax Act within the time specified in sub-section (1) which so far as the year 1986-87 is concerned, was July 31, 1986. The petitioner was granted extension of time up to October 31, 1986, but according to it this was not sufficient to enable i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es that the audit of the accounts of the earlier year had been completed on June 24, 1987, and, therefore, the audit of the accounts for the year in question could have been completed within a reasonable time of three to four months thereafter and, therefore, there was no justifiable cause to extend the time for filing the return up to March 31, 1988. The petitioner challenges the proceedings, exhibits P-5 and P-8, in Original Petition No. 242 of 1991. The petitioner nevertheless purported to file the return on March 30, 1988, without the audited profit and loss account and report under section 44AB, as these were received only on April 25, 1988. The petitioner then filed a fresh return accompanied by these documents on April 26, 1988. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f time to file the return. According to the petitioner, it had sufficient reasons in support of the prayer, but the respondents had wrongly refused to exercise the discretion vested under section 139(3) to extend the time prescribed for filing the return. Before I take up this question, I shall deal with two preliminary points raised by Sri P. K. Ravindranatha Menon, counsel for the Revenue. The first was that with the introduction of section 139(10) in the Income-tax Act with effect from April 1, 1986, any loss return filed after July 31, 1986, has to be treated as non est and non-existent. According to him, section 139(3) ceased to be effective with the introduction of section 139(10) and the Income-tax Officer ceased thereafter, i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to accept the plea. If the time is extended up to March 31, 1988, as prayed for, it takes within its sweep the entire period up to that date and not merely the period from December 26, 1987. I overrule this contention. I now come to the merits of the case. The question is whether the discretion has not been properly exercised. The petitioner is a public sector undertaking incorporated under the Companies Act. Its accounts have got to be audited by the auditor appointed by the Comptroller and Auditor-General of India under section 619(2) of the Companies Act. That appointment for the relevant year was made only on September 26, 1986. The petitioner has pointed out in the additional affidavit that even the previous year's audit was complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 5 of the Limitation Act) postulated a liberal approach in the matter of condonation of delay when the State is involved. (Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471). The same approach may, to a certain extent, be applied to public sector undertakings as well, where there is no professional management, so long as there is no lack of bona fides. So far as this case is concerned, it is not suggested that the claim of the petitioner is lacking in bona fides. No doubt, things could have been done better and with greater promptitude, but having regard to the necessity for audit under two different enactments, it could not be said that the petitioner acted wholly negligently or without reasonable cause in submitting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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