Composite income-tax return filed late remains valid for unabsorbed depreciation and development rebate claims.

A composite return filed after the time prescribed under section 22(2A) of the Income-tax Act, 1922 is not invalid in toto where it also contains claims governed by section 22(2). The time limit under section 22(2A) affects only the carry-forward claim for business loss; it does not defeat claims for unabsorbed depreciation and development rebate. Where both types of claims are included in one return, separate returns are not required. Accordingly, the late portion fails only as to business loss, while the remaining claims must be considered on their merits.

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Issues: Whether a composite return filed beyond the time prescribed under section 22(2A) of the Income-tax Act, 1922 is invalid in toto, or whether it remains valid for the claims relating to unabsorbed depreciation and development rebate covered by section 22(2).

Analysis: The return filed by the assessee contained a claim for carry forward of business loss as well as claims relating to unabsorbed depreciation and development rebate. The time-limit in section 22(2A) governs only the entitlement to carry forward business loss under that provision. It does not render the return ineffective for other items which fall within section 22(2). Where one return combines both kinds of claims, the Act does not require separate returns, and the return must be treated as a composite return. If the portion relating to business loss is out of time, that claim alone fails, but the remaining claims are still to be considered on merits.

Conclusion: The return was valid to the extent it related to unabsorbed depreciation and development rebate, but the assessee was not entitled to carry forward the business loss. The result is partly in favour of the assessee.

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