Law: Income Tax Act, 1961

Section: 139

Income-tax----Loss---Carry forward---Return disclosing loss ought to have been filed by 31-7-1975, but filed only on 9-10-1975---Though return filed belatedly it was within time specified under S.139(4)(b)---Assessee entitled to carry forward loss---Indian Income Tax Act, 1961, Ss.80 & 139. The assessee, who was a partner of a firm, should have filed his return by July 31, 1975, for the relevant year but filed the same .on October 9, 1975, disclosing a loss of Rs.61,730 which included the assessees share of loss of Rs.82.825 from the firm. After setting off the loss against the income from the business and after making certain disallowances, the net loss was determined by the Income-tax Officer at Rs.60,019. The Income-tax Officer declined to carry forward the loss on the ground that though the return of income was due on July 31, 1975, in accordance with the provisions of section 139(1) of the Income Tax Act, 1961, yet it was filed only on October 9, 1975, that the assessee had not produced any evidence to show that extension of time for filing the return of income belatedly was asked for and granted by the Income-tax Officer and that, therefore, the loss could not be carried forward. On appeal, the Appellate Assistant Commissioner held that though no application for extension of time was filed by the assessee, the assessee had reasonable cause for the delay in filing the return because the particulars of share income from the firm were not available to the assessee till the firm itself filed its return of income, that the firm applied for extension of time to file its return of income and that, therefore, the delay in the filing of the return by the firm constituted reasonable cause for the assessee to delay the submission of his return. The Appellate Assistant Commissioner observed that the Income-tax Officer should have, on the merits, appreciated the reasons for the delay in the filing of the return and carried forward the loss. The Appellate Assistant Commissioner held that a return filed within the time specified under section 139 of the Act was still a valid return and the loss had to be determined and carried forward as a matter of course under…

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