Section 139(3): According to this section if a person has sustained a loss under the head ‘Profit and Gains of Business or profession’ or under the head ‘Capital Gains‘ and claims that such loss should be carried forward under section 72, section 73 or section 73A or section 74 or section 74A, then he may furnish a return of loss within the time prescribed under section 139(1) and all the provisions of the income tax act shall apply as if it were a return furnished under section 139(1).
Section 80: Notwithstanding anything contained in chapter VI, the loss which has not been determined in pursuance of a return filed in accordance with the provisions of section 139(3), shall not be allowed to be carried forward and setoff under section 72, section 73, section 73A, section 74 or section 74A.
In simple terms if Income tax return has filed after due date as prescribed by section 139(1) then according to section 80 no loss from Profit and Gains of Business or profession or Capital Gain can be carry forward and setoff to next year. However, section 80 does not restrict to setoff of loss from Profit and Gains of Business or profession or Capital Gains in the same year even the return filed after due date.
And one more thing that the loss under the head “Income from house property” can be carried forward even if ROI is furnished after due date.
East Asiatic company India Private Limited (Mad.)
The setoff and carry forward of depreciation is governed by section 32(2) and is not governed by chapter VI. Section 80 overrides chapter-VI but is does not override section 32(2). Section 32(2) nowhere provides that return of income should be filed on or before the due date for carry forward of unabsorbed depreciation. Therefore, unabsorbed depreciation can be carry forward even if the return of income is furnished after the due date specified in section 139(1).
Chapter VI of the income tax Act consists of section 70 to section 80. The heading of chapter VI is “Setoff or Carry forward and setoff of losses”.