Loss return filed within extended time can still support carry forward of loss under the Income-tax Act.

A loss return filed after the time prescribed under section 139(1) but within the period allowed by section 139(4) remains a valid return for the purposes of carry forward. The Tribunal applied the settled interpretation that section 139(4) cannot be construed to nullify section 139(3), and that the statutory scheme continues to recognise a loss return filed within the extended time. It also noted the relevance of the deeming language in the return provisions, the operation of section 80 as then in force, and the duty to determine and intimate the loss under section 157. The assessee was therefore entitled to carry forward the loss.

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Issues: Whether a return of loss filed within the time allowed under section 139(4) of the Income-tax Act, 1961, but not within the time prescribed under section 139(1), entitles the assessee to carry forward the loss under section 139(3) and section 80.

Analysis: The return was filed after the period under section 139(1) and no extension had been sought, but it was within the period permitted by section 139(4) and was therefore a valid return. The Tribunal applied the principle that section 139(4) cannot be read so as to make section 139(3) ineffective. It relied on the settled interpretation that a loss return filed within the statutory extended period remains a return for the purposes of the Act. The Tribunal also noted the significance of the words deeming the return to be one under section 139(1), the scheme of section 80 as it stood, and the duty to determine and intimate loss under section 157.

Conclusion: A loss return filed within the period permitted by section 139(4) is sufficient for carry forward of loss, and the assessee is entitled to that benefit.

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