Carry forward of business loss permitted despite delayed return where binding precedent recognised the taxpayer's right.

Carry forward of business loss was treated as permissible despite the assessee not filing the return within the time prescribed under Section 139(1), because the question referred under Section 256(1) was covered by earlier binding precedent recognising that right. The Tribunal's allowance of the determined loss was said to be consistent with the settled legal position, and the issue was resolved in favour of the assessee and against the Revenue.

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Issues: Whether the assessee was entitled to carry forward business loss for the assessment year 1984-85 despite not filing the return of income within the time prescribed under Section 139(1) of the Income-tax Act, 1961.

Analysis: The question referred under Section 256(1) was held to be covered by earlier binding precedent which had recognised the right to carry forward loss even where the return was not filed within the time stipulated under Section 139(1). The Tribunal's view allowing carry forward of the determined loss was therefore consistent with the settled legal position.

Conclusion: The issue was decided in favour of the assessee and against the Revenue; the carry forward of loss was permitted notwithstanding the delayed return.

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