Carry forward of loss remains available when the loss return is filed before assessment, despite missing the original due date.

A loss return filed after the time under section 139(1) but before assessment completion was treated as sufficient for carry forward of the loss. The court read the 1961 Act as removing only the Income-tax Officer's power to extend time, not as extinguishing the right to have the loss determined where the return was filed before assessment. Since the return had been filed and the assessment completed, the statutory conditions for determination and carry forward of the loss were satisfied, and the reference was answered in favour of the assessee.

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Issues: Whether the loss determined for the assessment year 1964-65 was required to be carried forward where the return showing loss was filed after the time mentioned in section 139(1) but before the assessment was completed.

Analysis: The relevant provisions under the old Act and the Income-tax Act, 1961 were examined to determine whether the omission to file the loss return within the time prescribed by section 139(1) was fatal to the claim for carry forward. The Court noted that under the earlier enactment, the Supreme Court had held that a return could be filed before assessment and that, for purposes of loss carry forward, the time provisions had to be read beneficially. The Court further held that the material change in the 1961 Act was only the withdrawal of the Income-tax Officer's discretion to extend time, not the destruction of the assessee's right to have a loss determined where the return was filed before assessment. Since the return had in fact been filed and the assessment had been made, the statutory conditions for determination and carry forward of loss were satisfied.

Conclusion: The loss was directed to be carried forward, and the answer to the reference was in favour of the assessee.

Ratio Decidendi: A loss return filed before completion of assessment may satisfy the statutory requirement for carry forward of loss even if it was not filed within the original due date, where the governing provisions do not exclude such a return and the return is otherwise within the framework of the Act.

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