Updated return under section 139(8A) cannot be filed if original return is a loss return under section 139(3). Explain the validity of above statement in the context of Income Tax Act, 1961.

A return filed under section 139(3) is a loss return, which allows the assessee to carry forward specific losses like business/profession loss or capital loss or loss of owning & maintaining race horses only. If an assessee has originally filed a loss return under section 139(3), filing an updated return that continues to show a loss or enhances such loss is not permissible under section 139(8A). This is because an updated return is intended only for declaring additional income and not for claiming or increasing losses. However, if the assessee files an updated return which reduces the loss or converts the loss into positive income, thereby resulting in additional tax liability, such an updated return is allowed, subject to fulfilment of other conditions of section 139(8A). Therefore, the statement that an updated return under section 139(8A) cannot be filed if the original return is a loss return under section 139(3) is incorrect. An updated return is prohibited only when it results in a loss or increases the loss. If the updated return leads to declaration of income or reduction of loss with additional tax payable, it is permissible.