Law:

Section:

Section 80 of the Income-tax Act, 1961 - Losses - Returns for - Assessment year 1986-87 - Assessee well before expiry of time specified in section 139(1), filed an application seeking extension of time for filing return - Assessing Officer did not pass any order on that application - Assessee filed return well within extended period - Whether assessee was entitled to carry forward loss claimed in return - Held, yes FACTS The assessee was engaged in the manufacture and sale of electronic items. It filed an application in the prescribed form on 30-7-1986 seeking extension of time for filing the return for the assessment year 1986-87 till 31-10-1986. The Assessing Officer did not pass any order on the said application. The assessee, on the belief that the application was granted, filed the return on 23-10-1986 well within the extended period and claimed in the return to carry forward the loss. The Assessing Officer refused to carry forward the loss claimed in the return on the ground that the same could not be granted in view of the provisions under section 139(3). On appeal, the Commissioner (Appeals) confirmed the order of the Assessing Officer. On further appeal, the Tribunal held that the assessee was entitled to carry forward the loss of the relevant assessment year. On reference : HELD The provisions of section 80 and section 139(1) provide for extension of time for filing the loss return and if the loss return is filed within the extended period, the claim for carry-forward or set-off of loss has to be allowed. [Para 8] In the instant case, admittedly, the assessee had made an application for extension of time on 30-7-1986, well before the expiry of the time specified in section 139(1), and the assessee had filed the return within the period of extension sought for. There was a lapse on the part of the Assessing Officer in responding to the application. In a case where, by virtue of the provisions of the proviso to section 139(1) or by virtue of the provisions of section 80, extension of time for filing the return is sought, the Assessing Officer is obliged to pass an order on such application. If the Assessing Officer fails to pass such an order, the…

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