Carry forward of business loss was allowed despite late filing, as later amendments did not apply to assessment year 1984-85.

For assessment year 1984-85, filing the loss return beyond the time prescribed under section 139(3) did not by itself bar carry forward and set-off of business loss. The Calcutta HC applied its earlier ruling that the benefit was not denied merely because of late filing, and read the Board circular as accepting that position up to assessment year 1984-85. The amendments introduced in 1986, with effect from 1-4-1987, were held applicable only from assessment year 1987-88 onwards and therefore did not affect the assessee's claim for 1984-85. The question was answered in the affirmative, and carry forward and set-off were allowed.

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Issues: Whether, for assessment year 1984-85, the assessee was entitled to carry forward and set off business loss despite filing the loss return beyond the time prescribed under section 139(3) of the Income-tax Act, 1961.

Analysis: The reference was decided by applying the earlier decision holding that the benefit of carry forward of loss was not denied merely because the return was filed beyond the time under section 139(3). The Board circular was read as accepting that position only up to assessment year 1984-85, while the amendment brought into force from 1-4-1987 was held applicable only from assessment year 1987-88 onwards. The changes introduced in 1986 were therefore held not to affect assessment year 1984-85.

Conclusion: The question was answered in the affirmative, and the assessee was held entitled to carry forward and set off the business loss.

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