Rajasthan Cylinders and Containers Ltd. vs Commissioner of Income Tax

By the Court

On an application u/s 256(1) of the Income Tax Act, 1961, the Tribunal has referred the following question for our opinion :

"Whether the Tribunal was right in law in holding that the assessee-company was not entitled to carry forward of loss computed for the assessment year 1985-86 ?"

The assessee is a limited company. The assessee-company claims to have made an application in Form No. 6 for extension of time on 28-6-1985, for filing the return which was due to be filed on 30-6-1985. In the application the time sought was uptill 30-9-1985. In the return, the assessee has shown a loss of Rs. 25,82,740. The assessment was, however, completed computing total loss of Rs. 9,71,561. The business loss was only Rs. 8,095 while the depreciation to be carried forward was Rs. 9,55,371. The Income Tax Officer did not allow to carry forward the loss determined, while making the assessment on the ground that returns were not filed on or before the due date. Commissioner (Appeals) as well as the Tribunal both have confirmed the view taken by assessing officer. When the returns were not filed or before due date, assessee is not entitled for carry forward of loss.

Heard learned counsel for the parties. Mr. Ranka, learned counsel for the assessee, submits that once the application for extension of time in Form 6 has been submitted before the assessing officer on or before the due date, if that application has not been rejected and communicated to the assessee, the presumptions will be that time has been extended. Application for extension of time has not been rejected in the case in hand, the time prayed for extension till 30-9-1985, the assessee can fill the return till 30-9-1985, and that be treated that return of income has been filed on or before due date. Admittedly the returns were filed on 5-8-1985, i.e., before 30-9-1985, and once the returns were filed before the period sought for extension of time to file the return, there is no question of saying that returns are not filed within due date. When the return are filed on or before the due date, the Income Tax Officer should allow the carry forward of losses.

Learned counsel for the assessee Mr. Ranka placed reliance on the decision of Calcutta High Court in the case of COMMISSIONER OF Income Tax Vs. JANATA FILM EXCHANGE (P.) LIMITED., Mr. Singhi has not brought to our notice any relevant decision which shows that once the application is filed for extension of time and that is pending with the Income Tax Officer, it is to be presumed that time sought for in the application has been extended.

The admitted facts are that returns are due to be filed on or before 30-6-1985. On 28-6-1985, the assessee had filed the application in Form No. 6 for extension of time till September, 1985, and returns showing loss has been filed on 5-8-1985, as before 30-9-1985. The consistent view taken by various High Courts that once the assessee has applied for extension of time in Form No. 6 and if that application has not been disposed of or rejected, the presumption will be that the time has been extended and if assessee has filed the return on or before the extended time prayed for, the return shall be taken to be filed on or before due date. In this case, when the application has been submitted for extension of time on 28-6-1985, and that has not been rejected, it shall be presumed that the time has been extended till 30-9-1985, and in this case, admittedly the returns are filed on 5-8-1985, therefore, it cannot be said that the returns are not filed on or before the due date.

In our view, the Tribunal has committed error in disallowing the claim of the assessee holding that returns are not filed on or before the due date.

In the result, we answer the question in negative i.e., in favour of the assessee and against the revenue.

The reference so made stands disposed of accordingly.

OPEN