Seven-Day Delay in ITR Filing Cannot Defeat Loss Carry Forward: Calcutta High Court

Case Background

Case: Padmalochanan Radhakrishnan Vs Union of India & Ors.
Court: Calcutta High Court
**Writ Petition No.😗* 29778 of 2025
Orders Challenged: Dated 17.10.2025 and 30.10.2025

The Calcutta High Court recently delivered a significant ruling in favour of an assessee whose application for condonation of delay was summarily rejected by the Revenue authorities. The core issue before the Court was whether a mere seven-day delay in filing the income tax return could lawfully defeat the assessee's entitlement to carry forward losses — a benefit otherwise available under the Income Tax Act, 1961.

The Dispute: What Went Wrong for the Assessee

For Assessment Year 2022-23, the prescribed due date for filing the return of income under Section 139(1) of the Income Tax Act, 1961 was 31st July 2022. Owing to unavoidable circumstances, the assessee filed the return on 07.08.2022 — a delay of just seven days beyond the due date.

Since the return was technically filed under Section 139(4) (as a belated return rather than within the time prescribed under Section 139(1)), the Income Tax system automatically denied the benefit of carry forward of loss under Section 80 of the Act for Assessment Year 2023-24. Consequently, an intimation under Section 143(1) of the Income Tax Act, 1961 was issued to the assessee reflecting this disallowance.

Seeking relief, the assessee approached the competent authority by filing an application under Section 119(2)(b) of the Income Tax Act, 1961, requesting condonation of the seven-day delay. However, the authority rejected the application by placing reliance on CBDT Circular No. 11 of 2024, without adequately considering the facts and the bona fide nature of the delay. The rejection orders dated 17.10.2025 and 30.10.2025 were thereafter challenged before the Calcutta High Court by way of a writ petition.

Section 139(1) vs. Section 139(4)

Under Section 139(1) of the Income Tax Act, 1961, every assessee is required to file the return of income within the due date specified therein. Section 139(4) permits an assessee to file a belated return after the expiry of the due date specified under Section 139(1), but such a belated return carries certain consequences — one of which is the denial of the right to carry forward losses as mandated by Section 80 of the Act.

Section 80 of the Income Tax Act, 1961 explicitly provides that losses shall not be carried forward to subsequent years unless the return of income for the year in which the loss is incurred has been filed within the time allowed under Section 139(1). A return filed under Section 139(4), even if otherwise valid, does not satisfy this condition.

Section 119(2)(b) — The Condonation Route

Section 119(2)(b) of the Income Tax Act, 1961 empowers the Central Board of Direct Taxes (CBDT) and authorities authorised by it to admit belated applications or claims and condone the delay where genuine hardship has been caused to the assessee. This provision acts as a safety valve in the statutory scheme, allowing deserving cases to be considered on merits notwithstanding technical non-compliance with time limits.