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TMI Blog2002 (9) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... lid as per the provisions of section 139(9) of the Act. Thereafter, the Assessing Officer issued notice under section 139(2) dated 15-1-1988 directing the assessee to file a return as the original return filed by the assessee was treated as invalid. In response to the notice under section 139(2), the assessee filed the return on 19-12-1988 declaring loss of Rs. 48,69,000. The assessee did not file the audited accounts along with this return also. Subsequently, the assessee filed another return of income on 30-12-1989 declaring loss of Rs. 46,85,264. 3. The Assessing Officer referred to the provisions of section 139(3) of the Act and has stated that the assessee was required to furnish the return of loss within the time allowed under section 139(1) of the Act in order to claim the loss to be carried forward to the subsequent year. According to him, section 139(3) is an enabling provision by virtue of which the assessee who has sustained loss is allowed to file the return of income declaring loss. However, the time limit is the same as mentioned in section 139(1) of the Act. He has further observed that the original return was filed within the time allowed under section 139(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn was filed by the assessee in response to notice under section 139(2) beyond the time allowed under section 139(1) of the Act. Therefore, according to the learned CIT(A), the provisions prescribed by section 80 shall apply to the assessee's case. The learned CIT(A) has further stated that for the loss to be carried forward, it is mandatory that the return must be filed within the time prescribed under section 139(1) of the Act. Regarding the reference made by the assessee to sections 139(9) and 292B, the learned CIT(A) observed that section 139(9) requires the Assessing Officer to intimate to the assessee for removal of the defects in the return within 15 days or within further extended period which may be allowed by the Assessing Officer. If the defect is not removed within the prescribed period, the return has to be treated as invalid and all the provisions of the Act have to be applied as if the assessee failed to file the return. Regarding section 292B, the learned CIT(A) observed that the return filed without being accompanied by profit and loss account, balance sheet and Auditor's report could be said to be a return in substance and effect in conformity with or according t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to file audited profit and loss account, balance sheet and the Auditor's report. As the Assessing Officer did not receive any reply from the assessee, therefore he treated the return filed by the assessee as invalid and conveyed this decision to the assessee on 8-11-1988. Thereafter, the Assessing Officer served notice under section 139(2) on the assessee on 18-11-1988. In response to the notice under section 139(2), the assessee filed the return on 19-12-1988 showing loss of Rs. 48,69,000. The assessee also filed a revised return on 30-12-1989 showing loss of Rs. 46,85,264. According to the assessee, the provisions of section 139(1), read with section 139(3) are applicable only where notice under section 139(2) has not been issued. According to the assessee, the original return filed by the assessee had been treated as non est. The assessee submitted that as the notice under section 139(2) was issued, therefore the provisions of section 139(3) are not applicable to their case. Thus according to the assessee, the loss return filed in compliance with notice under section 139(2) beyond the period specified under section 139(1) shall have to be considered and computation of loss has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section (1) of section 74." The Taxation Laws (Amendment) Act, 1984 further amended section 80 with effect from 1st April, 1985, substituting the words 'under section 139' by the expression "within the time allowed under sub-section (1) of section 139 or within such further time as may be allowed by the Income-tax Officer." Finance Act, 1987, again amended section 80 with effect from 1st April, 1988 to include the reference to sub-section (3) of section 74 by the said Act. Similarly, the Direct Tax Laws (Amendment) Act, 1987 amended section 80 with effect from 1st April, 1989, substituting the words "in accordance with the provisions of sub-section (3) of section 139 or within such further time as may be allowed by the Income-tax Officer." Thus, prior to this amendment by the Taxation Laws (Amendment) Act, 1984, with effect from 1st April, 1985, section 80 required the return of loss to be filed under section 139. Thus, the returns could be filed within the time allowed under sub-sections (1), (2), (3) or (4). Any return filed under any of these sub-sections would qualify the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the learned counsel have no relevance as the assessment year involved is 1988-89 and the same is covered by the amended section 80, after 1-4-1985. The amendment of section 80 by the Taxation Laws (Amendment) Act, 1984 with effect from 1-4-1985 was in fact made to meet the situation created by the decision of the Supreme Court in the case of Kulu Valley Transport Co.(P.) Ltd. Therefore, as per the amended section 80, the return of loss has to be filed only within the time allowed by section 139(1) or the extended time allowed by the Assessing Officer. This discretion of the Assessing Officer was, however, taken away by the amendment of section 139 and the consequent amendment of section 80 which now requires the return of loss to be filed in accordance with section 139(3) of the Act. In the present case, the return of loss filed under section 139(2) of the Act, therefore, the assessee was not entitled to carry forward the loss to the subsequent year because for the assessment year 1988-89, the return of loss had to be filed within the time allowed under section 139(1) or the extended time allowed by the Assessing Officer. Under the circumstances, we do not find any infirmity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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