COMMISSIONER OF INCOME TAX Vs. PANAVISION ELECTRONICS KERALA P LTD
HIGH COURT OF KERALA
COMMISSIONER OF INCOME TAX
Panavision Electronics Kerala P Ltd
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G.SIVARAJAN, J. -
(1.) THE following question of law is referred under Section 256(1) of the Income -tax Act, 1961, (for short 'the Act'), by the Tribunal at the instance of the Revenue :
'Whether, on the facts and in the circumstances of the case, and in the light of Section 80 of the Income -tax Act, the assessee is entitled to carry forward the loss computed on the basis of the return of income filed within the time for which extension was sought from the Assessing Officer ?'
(2.) THE brief facts relevant for the purpose of the case are as follows. The respondent -assessee is a closely held company, carrying on the business of manufacture and sale of certain electronic items. The assessment year concerned is 1986 -87, the relevant accounting period ended March 31, 1986. The due date for filing the return under Section 139(1) of the Act was July 31, 1986. The assessee filed an application in the prescribed form on July 30, 1986, seeking for extension of time for filing the return till October 31, 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 for the year 1986 -87 on October 23, 1986, well within the extended period applied for. The Assessing Officer completed the assessment on the basis of the return filed on October 23, 1986, as per order dated January 22, 1987 (annexure A). The Assessing Officer refused to carry forward the loss claimed in the return, as according to him, the same cannot be granted, in view of the provisions under Section 139(3) of the Act. This is confirmed in appeal by the Commissioner of Income -tax (Appeals), Cochin. However, in further appeal by the assessee, the Tribunal held that the assessee is entitled to carry forward the loss of the year 1986 -87, and directed the Assessing Officer accordingly.
Learned standing counsel for the Revenue appearing for the applicant submitted that since the assessee has not filed the return within the time specified in Section 139(1) of the Act as contemplated under Section 80, the assessing authority is perfectly justified in rejecting the assessee's claim for carry forward of the loss of the assessment year 1986 -87. Standing counsel further submitted that though the assessee has filed an application for extension of time and since the Assessing Officer has not granted the said extension, as it is a discretionary relief, it cannot be assumed that extension was granted and the assessee has filed the return within the time specified under Section 139(1) of the Act. Though notice was served on the respondent -assessee, there is no appearance.
(3.) WE have considered the matter and we find that the Income -tax Appellate Tribunal was perfectly justified in holding that the respondent -assessee is entitled to carry forward the loss claimed in the return. Section 80 of the Act introduced with effect from April 1, 1985, provides that 'the return of loss must be submitted within the period prescribed under Section 139(1) of the Act. Under Section 80, no loss can be allowed to be carried forward and set off under Section 72(1) or Section 73(2) or Section 74(1) or Section 74A(3), unless such loss has been determined in pursuance of a return filed by the assessee under Section 139. By virtue of the provisions of Section 80, no loss would be allowed to be carried forward or set off, unless the return under Section 139(1) has been filed within the time allowed under Sub -section (1) of Section 139 for filing the return or within such further time as may be allowed by the Income -tax Officer.;
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