Assessee can set off brought forward losses even if he do not file the return of subsequent years within time required u/s.139(1)

Mr. Faisal Abbas Vs. DCIT (ITAT Mumbai)- It is observed from the copy of return filed by the assessee for assessment year 2001-02 on 31-10-2001 that loss of Rs. 27,26,360/- under the head “Profits & gains of business or profession” was declared. The said return for the year was duly filed within the time allowed u/s.139(1). We are currently dealing with assessment year 2002- 03 in which the assessee has claimed set off of the brought forward business loss against the income for the current year. In our considered opinion, the authorities below were not justified in not granting the set off of the brought forward business loss for the reason that the requirement to file return within the time prescribed u/s. 139(1) is for carrying forward the loss. Once loss is determined in the return file u/s. 139(3), the assessee becomes eligible for set off against the income of the subsequent years irrespective of the fact whether the returns of such later years are filed u/s. 139(1) or not. Sec. 80 read with sec. 139(3) requires the submission of return for loss before the due date. There is no such requirement that the subsequent years,   in which the set off is claimed,  must also fulfil the requirement of furnishing the returns within the time required u/s.139(1).