As these are cross-appeals by assessee and revenue, they are disposed of by consolidated order. 2. assessee is private limited company who is authorised dealer for Premier and Ambassador Cars, Matador Vans, Tempoes and Lamberetta scooters. Its relevant accounting year ended on 30-6-1976. assessee- company filed return showing loss of Rs. 5.58 lakhs which was received to Rs. 5.57 lakhs. ITO completed assessment computing loss at Rs. 1.80 lakhs. 3 to 12. [These paras are not reproduced here as they involve minor issues.] 13. last ground in revenue's appeal is against Commissioner (Appeals)'s direction to carry forward assessed loss. ITO had laconically stated at page 24 of assessment order that 'loss not to be carried forward as return filed late'. In para 2 of assessment order, date of filing of loss return of Rs. 5.58 lakhs is not given though it is mentioned that revised return was filed on 28-3-1980 showing loss of Rs. 5.57 lakhs. 14. Commissioner (Appeals) directed ITO to carry forward loss relying on CIT v. Kulu Valley Transport Co. (P.) Ltd. [1970] 77 ITR 518 (SC), Presidency Medical Centre (P.) Ltd. v. CIT [1977] 108 ITR 838 (Cal.) and Telstar Advertising (P.) Ltd. v. CIT [1979] 116 ITR 610 (Bom.). 15. learned departmental representative urges that Supreme Court's decision in Kulu Valley Transport Co. (P.) Ltd.'s case was under Indian Income-tax Act, 1922 ('the 1922 Act'), and that Mysore High Court in B.B. Danganavar v. ITO [1967] 65 ITR 370 had considered provisions of section 139 of Income-tax Act, 1961 ('the Act'), and had held that if return showing loss was not filed within statutory period, then assessee was not entitled to carry forward loss. Therefore, assessee who wants benefit of carry forward of loss must comply with strict provisions of section 139(3). He pointed out that assessee had not filed any application for extension of time and, therefore, he had not complied with terms of section 139(3). He drew support from observations of Supreme Court in Brij Mohan v. CIT [1979] 120 ITR 1 where dealing with penalty under section 271(1)(c) of Act, Supreme Court observed that nowhere does section 139 declare that where return is filed within extended period, it will be deemed to have been filed within period originally prescribed by statute. On contrary, section 139 contains provision for payment of interest where return is filed beyond prescribed date even though within extended period. That is evidence of fact that return filed during extended period is not regarded by statute as filed within time originally prescribed. learned departmental representative urged that if return filed within extended time is not treated as return filed within time originally prescribed, then return not filed within time prescribed under section 139(3) but filed beyond that time, namely, within two-year period prescribed under section 139(4), cannot be treated to be return under section 139(3). He further urged relying on CIT v. Manmohan Das [1966] 59 ITR 699 (SC) that whether loss in any year may be carried forward to following year and set off against profits and gains of subsequent year under section 24(2) of 1922 Act has to be determined by ITO who deals with assessment of subsequent year and that decision recorded by ITO who computes loss in previous year that loss cannot be set off against income of subsequent year, is not binding on assessee. 16. learned counsel for assessee pointed out that original loss return showing loss of Rs. 5.58 lakhs was filed on 26-9-1977 while it was due on 30-6-1977 and loss return though not filed within time allowed under section 139(3) was, filed within time allowed under section 139(4). Relying on order of Commissioner (Appeals) and decisions mentioned in his order, it is urged that assessee is entitled to carry forward of loss. 17. We find that while Mysore High Court in B.B. Danganavar's case supports revenue's case that assessee is not entitled to carry forward of loss if return is not filed within time allowed under section 139(3), opposite view has been taken by Calcutta High Court in Presidency Medical Centre (P.) Ltd.'s case where following Kulu Valley Transport Co. (P.) Ltd.'s case, it was held that if return is filed within time specified by sub-section case, it was held that if return is filed within time specified by sub-section (4) of section 139, it would be deemed to be in accordance with law and loss has to be determined and carried forward as matter of course under section 72(1), read with section 80, of Act, even though return was not filed within time provided by section 139(1). Bombay High Court in Telstar Advertising (P.) Ltd.'s case followed Calcutta High Court and held that ITO was not justified in refusing to carry forward loss on ground that loss return had not been filed within time prescribed under section 139(3). Bombay High Court did not follow view taken by Mysore High Court in B.B. Danganavar's case. Similar view was taken by Delhi High Court in CIT v. Bankipur Iron Works Ltd. [1980] 3 TAXMAN 484. assessment year before Delhi High Court was, however, assessment year 1961-62, in which year 1922 Act applied. 18. Allahabad High Court in CIT v. Pratapgarh Cold Storage & Ice Factory [1980] 3 TAXMAN 61, while dealing with assessment year 1971-72, followed Kulu Valley Transport Co. (P.) Ltd.'s case, Presidency Medical Centre (P.) Ltd.'s case and C.P. Sarthy Mudaliar [1978] 114 ITR 687 (AP) and held that loss return though not filed within time allowed under section 139(3) and filed under section 139(4), still entitled assessee to carry forward of loss for set off against its future year's income. 19. Andhra Pradesh High Court in C.P. Sarthy Mudaliar's case had taken same view. In that case loss return for assessment year 1961-62 h d been filed within 4 years of end of assessment year and assessment was completed on 28-3-1966 under section 143(3) of Act and High Court held that belated loss return should be deemed to be return validly filed under section 139(1). 20. Madhya Pradesh High Court in Co-operative Marketing Society Ltd. v. CIT [1983] 143 ITR 99 was dealing case, where loss returns were filed i n response to notice under section 148 of Act for assessment years 1972-73 and 1973-74 and ITO had computed loss for relevant years but had declined to carry forward loss on ground that returns were not filed within time allowed under section 139. High Court held that returns had been filed within time allowed under section 139(4) and, therefore, assessee was entitled to benefit of carry forward and set off of losses computed by ITO in respect of assessment years 1972-73 and 1973-74. Madhya Pradesh High Court followed Kulu Valley Transport's case. 21. Tribunal, Special Bench, Jaipur, in ITO v. Bohra Film Finance [1983] 4 ITD 247, while holding that return filed under section 139(4) could not be treated as filed under section 139(1) or 139(2), did observe at page 257 that scheme of 1922 Act in regard to filing of return was somewhat different from scheme of 1961 Act. However, Special Bench was not concerned with problem before us. We also note that Kanga & Palkhivala in foot-note 12 at page 825 of Law and Practice of Income-tax, Vol. 1, 7th edition, has observed that dissenting judgment of Shah J. in Kulu Valley Transport Co. (P.) Ltd.'s case was correct view that assessee, not filing loss return within time allowed under section 139(3)/22(2A), was not entitled to carry forward of loss. 22. Having carefully considered submissions of both parties and c s e laws discussed above and not finding any material difference in comparable provision of section 22(2A) of 1922 Act, and section 139(3) of 1961 Act, we would follow view held by majority of High Courts and hold that assessee is entitled to carry forward of loss. 23. In view of provisions of section 72 and section 80, we are not inclined to accept revenue's submission [relying on Supreme Court observations in Manmohan Das' case which were under 1922 Act] that it was premature for assessee to claim carry forward of loss in year under consideration. In view of ITO's holding that loss is not to be carried forward, assessee had to challenge said directions in appeal and, therefore, Commissioner (Appeals) was acting within his jurisdiction when he held that assessee was entitled to carry forward of loss. 24. In result, both assessee's appeal and revenue's appeal are partly allowed. *** DELHI AUTOMOBILES (P) LTD. v. INCOME TAX OFFICER