TMI Blog2007 (1) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... filed after the due date. 3. We have heard the parties. The learned Chartered Accountant Shri V. Sathyanarayanan for the assessee made the following submissions: The assessee-company filed its return of income for the assessment year 1998-99 on 30-11-1998, i.e., within the due date prescribed under section 139(1) of the Income-tax Act together with the statement of income, balance sheet and profit and loss account. It is submitted that since the audit under the provisions of the Companies Act, 1956 was not completed by that time, the audit report was not enclosed along with the return of income/loss and also the audit report as required under section 44AB of the Income-tax Act could not be filed when the return was filed on 30-11-1998. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order of the Assessing Officer before the CIT (Appeals). The CIT (Appeals) upheld the order of the Assessing Officer. But at the same time, the CIT (Appeals) directed the Assessing Officer allow element of depreciation as there is no bar under section 80 of the Act. It is argued by the ld. CA that due to administrative reasons, the assessee could not complete its audit as required under the Companies Act and hence when the return of loss was filed on 30-11-1998, at that time, the assessee enclosed unaudited profit and loss account and balance sheet. It is further argued that when the assessee had filed application requesting the Assessing Officer for granting additional time for removing the defect till 5-3-1999, in fact, it was w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntative submitted that the second return filed by the assessee was not as per the provisions of section 139(3) of the Act and as per the provisions of section 80, the assessee is not entitled to carry forward the loss. The ld. DR supported the order of the CIT(A) as well as Assessing Officer. 6. We have heard the rival submissions of the parties. We have also carefully considered the facts as per material placed before us. We have also carefully considered the legal principles in the precedents relied on by the ld. CA. The short issue in this case for our consideration is whether the assessee is entitled to carry forward the loss as determined by the Assessing Officer when the assessment was completed under section 143(3). The assessee fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of loss after the due date. In the light of these facts, we have to examine the relevant provisions of the Act. Section 80 of the Act reads as under:- "80. Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139, shall be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section (1) or sub-section (3) of section 74 or sub-section (3) of section 74A." As per the provisions of section 80 which in the nature of overriding provision if the return of income is not filed as provided under section 139(3) the loss determined shall not be carried forward and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed its bona fide difficulty in getting the audit as per the Companies Act and it requested the Assessing Officer for time up to 5-3-1999 to file the return. It was the duty of the Assessing Officer to dispose of the application filed by the assessee either granting the additional time or refusing the same. But the Assessing Officer did not act on the said application. 8. On the perusal of section 139(9), it is clear that though the defect is to be rectified within the period of 15 days from the date of intimation, at the same time, if the application is filed by the assessee then that is to be considered judiciously as it is a discretion of the Assessing Officer to consider the reasons and accordingly, grant time. If the application filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arry forward determined loss as per section 80 of the Act. We are, therefore, of the opinion that the assessee is entitled to carry forward the loss and set off the same as per the provisions of law. We, therefore, direct the Assessing Officer to allow the assessee to carry forward the determined loss to be set off in future as per the provisions of law. We, accordingly, set aside the order of the CIT (Appeals) on this issue. Thus, ground No. 2 is allowed. 11. The next issue is with regard to disallowance of the prior period expenses of Rs. 6 lakhs which arises from ground No. 3 taken by the assessee. The ld. CA submitted that the assessee is not pressing ground No. 3. The ld. DR has no objection for the same. As the assessee has not pres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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