Law:

Section:

section 80 of the income-tax act, 1961-loss-submission of return for losses-return of loss filed by assessee in response to notice under section 148 was within the time allowed under section 139(4)(b)-whether loss determined by ito in assessment could be said to be loss determined in pursuance of return filed under section 139 so as to entitle the assessee to its carry forward and set off-held, yes Facts In response to notices served under section 148, the assessee filed relevant returns declaring losses. However, these returns had been submitted before the end of the period specified in section 139(4)( b). The ITO assessed the assessee at loss but he declined to carry forward these losses for the purpose of set off during the subsequent years on the ground that the returns were not filed within the time allowed by the provisions of section 139. On appeal, both the AAC and the Tribunal upheld the ITO's order. On reference : Held In view of the Supreme Court's observations in CIT v. Kulu Valley Transport Co. (P.) Ltd. [1970] 77 ITR 518 that sub-sections (7) and (4) of section 139 are to be read together and an assessee would be entitled to carry forward the loss if he has filed return after the period prescribed by subsection (1) of section 139 but within the time allowed under subsection (4) of section 139, in the instant case, the returns having been filed within the time allowed under sub-section (4) of section 139, the loss determined by the ITO for the relevant assessment years could be said to be loss determined in pursuance of return filed under section 139. Accordingly, the lower authorities were not justified in declining to allow the benefit of carry forward and set off of the losses to the assessee. Case review CIT v. Kulu Valley Transport Co. (P.) Ltd. [1970] 77 ITR 518 (SC) followed. Case referred to CIT v. Kulu Valley Transport-Co. (P.) Ltd. [1970] 77 ITR 518 (SC). Order SOHANI, J.- By this reference under section 256(1) of the Income-tax Act, 1961 ('the Act'), the Tribunal, Indore Bench, has referred the following questions of law to this Court for its opinion : "1. On the facts and in the circumstances of the case, whether the Tribunal is right…

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