Return of loss- Section 139(1), (3) of I. T. Act, 1961- A. Y. 2010-11- Delay of one day in filing return satisfactorily explained by assessee- Assessee not to be denied carry forward of loss- direction to CBDT to accept return of assessee-

For the A. Y. 2010-11, the last date for filing returns was extended to October 15, 2010.The assessee filed return of loss on the last day i.e. October 15, 2010. The uploading was delayed by a few hours due to a technical snag. The Assessing Officer took the date of filing as October 16, 2010 but did not treat it as a belated return and passed an assessment order u/s. 143(3) of the Income-tax Act, 1961, allowing the claim to carry forward loss. The Commissioner issued a show cause notice u/s. 263 of the Act stating that the benefit of carry forward of losses allowed to the assessee was erroneous and prejudicial to the Revenue due to the assessee’s delay in filing the return. The assessee filed an application to the CBDT for condonation of delay of two hours due to which the date of filing was reckoned as October 16, 2010. CBDT rejected the application on the ground that there was no justifiable reason to condone the delay.

The Madras High Court allowed the writ petition filed by the assessee and held as under:

“i) When the assesee was entitled to claim the carry forward of loss u/s. 139(3) of the Act, it could not have been stated that the delay in filing the return had occurred deliberately on account of culpable negligence or on account of mala fides. Mere delay ought not to have defeated the claim of the assessee. When the delay was satisfactorily explained by the assessee, the approach of the CBDT should have been justice oriented so as to have advanced the cause of justice and the delay should have been condoned.

ii) The CBDT is directed to accept the return filed by the petitioner company for the A. Y. 2010-11 u/s. 139(1) of the Act.”