Sabyasachi Mukharji, J. - (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, we are concerned with the assessment year 1964-65. The relevant accounting year is the period which ended on the 31st March, 1964. One of the contentions that arose in the appeal before the Tribunal for the assessment year 1964-65 was that the revenue authorities were wrong in not directing the carry forward of the loss sustained in relation to that year. It appears that the return for that year was filed on the 3rd October, 1964, showing a loss of Rs. 15,890. The Income-tax Officer completed the assessment and determined the loss at Rs. 8,387. He did not allow the carry forward of the loss, inter alia, holding : "Assessee will not get benefit of carry forward of loss as notice under Section 139(2) was not served and return showing loss was not filed within the time allowed under Section 139(1) of the Income-tax Act, 1961."
(2.) The assessee on appeal before the Appellate Assistant Commissioner urged this as one of the grounds amongst other grounds and it was contended that the time for filing of the return could have been extended. The Appellate Assistant Commissioner observed that there was no automatic extension of time and it could only be done on the application made by the assessee and, referring to the provision of Section 139(3) of the Income-tax Act, 1961, the Appellate Assistant Commissioner held that the benefit of carry forward was available only to an assessee who had furnished the return within the time allowed under Section 139(1) and, therefore, he upheld the Income-tax Officer's finding on this aspect of the matter. There were other items in dispute in appeal before the Appellate Assistant Commissioner but the appeal was dismissed.
(3.) The assessee, thereafter, preferred an appeal to the Tribunal. It was urged before the Tribunal that the return had been signed on the 30th September, 1964, and sent by registered post on the 1st October, 1964, but it was delivered to the Income-tax Officer only on the 3rd October, 1964. In those circumstances, the time should have been extended, it was urged. It was further submitted that notice under Section 143(2) had been issued and, therefore, return should have been treated as a return filed under Section 139(1) and under Section 139(3) the provisions of the Act applied as if it was a return under Sub-section (1) and the loss should have been allowed to be carried forward. It was submitted that an oral request had been made before the Income-tax Officer and the Appellate Assistant Commissioner for extending the time. The Tribunal found that no written application had been filed for extension of time to file the return of loss. The Tribunal noticed that there was no reference to any request by the assessee for extension of time either in the assessment order or in the order of the Appellate Assistant Commissioner and in those circumstances did not accept the contention that such requests had been made. It was not disputed that no notice under Section 139(2) of the Income-tax Act, 1961, had been issued. The Tribunal held that the section was clear that if the assessee wanted the loss to be carried forward, the assessee must file the return within the time prescribed under Section 139(1). The return should have been filed within six months from 21st March, 1964. The Tribunal was accordingly of the opinion that the posting of the return on the 1st October, 1964, would not fulfil the requirements of Section 139(3) in this behalf. In this connection the Tribunal relied on and referred to the decision of the Mysore High Court in the case of B. B. Danganavar v. Income-tax Officer [1967] 65 ITR 370 (Mys), a decision upon which reliance was also placed before us at the hearing of the reference and with which we shall deal later on. According to the Tribunal in that decision it was held that there was no discretion vested in the Income-tax Officer to extend the time. The Tribunal, accordingly, affirmed the order of the Income-tax Officer on this aspect of the matter.;