Return of Loss [Section 139(3)] :

(1) This section requires the assessee to file a return of loss in the same manner as in the case of return of income within the time allowed under section 139(1).

(2) Under section 80, an assessee cannot carry forward or set off his loss against income in the same or subsequent year unless he has filed a return of loss in accordance with the provisions of section 139(3).

(3) A return of loss has to be filed by the assessee in his own interest and the non-receipt of a notice from the Assessing Officer requiring him to file the return cannot be a valid excuse under any circumstances for the non-filing of such return.

(4) In particular, a return of loss must be filed by an assessee who has incurred a loss under the heads “Profits and gains from business or profession”, “Capital gains”, and income from the activity of owning and maintaining race horses taxable under the head “Income from other sources”.

(5) However, loss under the head “Income from house property” under section 71B and unabsorbed depreciation under section 32 can be carried forward for set -off even though return of loss has not been filed before the due date.