Belated return and carry forward of losses referred for legal consideration under income-tax reference jurisdiction

A reference application concerning carry forward of losses on a belated return was allowed because the effect and impact of the late filing on the assessee's claim raised a question of law that required consideration. The Tribunal was directed to state the case and refer the proposed question under section 256(2) of the Income-tax Act, 1961. No decision was given on the substantive tax issue itself, and the merits of whether losses can be carried forward on a belated return remained undecided.

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Issues: Whether the Tribunal should be directed to state the case and refer the question whether an assessee can carry forward losses when the return is belated, and whether the matter requires consideration under the reference jurisdiction.

Analysis: The application arose from the Tribunal's refusal to refer the proposed question of law. The Court found that the effect and impact of a belated return on the assessee's claim to carry forward loss required consideration and answer, and therefore the proposed question deserved to be stated and referred.

Outcome: The application under section 256(2) of the Income-tax Act, 1961 was allowed and the Tribunal was directed to state the case and refer the question of law. No final adjudication was made on the merits of the underlying tax issue.

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