Carry forward of loss is allowed when the return is filed within a validly extended time limit.

A loss return filed within a validly extended time limit satisfies the timeliness requirement for carry forward of loss under section 139(3) of the Income-tax Act, 1961. On the facts, the assessee had filed the return during the extended period, the assessment accepted the returned loss, and the objection based solely on alleged delay was rejected. The Tribunal's view allowing carry forward was therefore sustained, consistent with the court's earlier decision on identical facts.

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Issues: Whether the assessee was entitled to carry forward the loss when the return was filed within the extended time allowed, and whether the Tribunal was right in upholding that claim despite the objection based on section 139(3) of the Income-tax Act, 1961.

Analysis: The assessment year was 1987-88 and the return was filed within the period to which time had been extended. The assessment was completed under section 143(1) of the Income-tax Act, 1961, accepting the returned loss, and the disallowance of carry forward rested only on the view that the return was not filed within time under section 139(3). The factual position showed that the return was filed during the extended period, and the same issue had already been considered in the court's earlier decision on identical facts.

Conclusion: The assessee was entitled to carry forward the loss, and the Tribunal's decision did not call for interference.

Final Conclusion: The challenge failed and the Tribunal's view allowing carry forward of the loss was sustained.

Ratio Decidendi: A loss return filed within the validly extended time limit satisfies the requirement of timely filing for the purpose of carry forward of loss under section 139(3) of the Income-tax Act, 1961.

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