The Assessee filed the return of income under section 139(1) of the Act on 30.11.2006, declaring loss, within the due date provided under the Act. Subsequently, a search and seizure action under section 132 of the Act was carried out on the premises of the assessee on 01.06.2006 and notice under section 153A of the Act was issued on 30.07.2007, asking the assessee to file return of income for assessment years falling under the search period, including assessment year under consideration, within 16 days of service of the notice. However, the assessee filed return of income in response to notice under section 153A of the Act on 13.02.2008. The AO noticed that the Assessee had reduced its claim of carry-forward of the losses however the assessment was completed accepting the carry forward of loss claimed by the assessee. Subsequently, notice under section 154 was issued to deny the carry forward of loss on the ground that the return was not filed within the stipulated period of 16 days.   Tribunal on going through the facts of the case held that the Ld.AO did not correctly interpret that provision of section 153A. The Hon’ble Tribunal held that invocation of section 153A can be in two situations namely, where assessment proceeding gets abetted and; secondly, where assessment proceeding are not abetted. In the instant case, it was noticed that no assessments were pending as on the date of the search, and therefore, the return of income filed under section 139 could not be treated as non-est. As such proceedings were regular proceedings, the action of the Ld.AO in denying the carry forward of the loss on account of the late filing of the return under section 153A of the Act, was not justified. (AY. 2006-07)