Summary
The Department had to accept revised tax returns for AY 2016–2017 filed to implement NCLT-sanctioned amalgamation schemes even though the ordinary revision deadline had passed before final sanction. The schemes expressly permitted consequential revision, and the Department had not objected after notice. Assessment of the successor companies had to reflect the amalgamation and revised income.
Issues
- Whether the ordinary revised-return deadline barred returns necessitated by subsequent sanction of amalgamation.
- Whether CBDT condonation was required.
- How the successor companies’ income should be assessed.
Provisions considered
- Section 230(5), Companies Act, 2013Notice affords authorities thirty days to represent against the scheme; the Department raised no objection before sanction. (¶¶ 4.3, 4.5, 4.6)
- Section 139(5), as applicable to AY 2016–2017, Income Tax Act, 1961The ordinary revision provision for omissions or wrong statements did not govern these revisions necessitated by subsequent scheme sanction. (¶¶ 6, 7, 8)
- Section 119(2)(b), Income Tax Act, 1961The condonation route did not apply in the stated circumstances of restructuring under sanctioned schemes without departmental objection. (¶ 9)
- Section 170(1), Income Tax Act, 1961The Department must assess the successors taking account of income following succession and the revised returns implementing amalgamation. (¶ 10)
Held
- The sanctioned schemes expressly enabled returns to be revised beyond ordinary limits. After notice and absence of departmental objection, the schemes acquired statutory force, and their appointed date governed the transfer of assets and liabilities. (¶¶ 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9)
- These revised returns corrected no discovered omission or wrong statement in the originals. They implemented later NCLT sanction, making filing before the expired deadline impossible; Section 139(5) did not defeat them on these facts. (¶¶ 6, 7, 8)
- Prior CBDT condonation under Section 119(2)(b) was unnecessary in these circumstances. Procedure serves correct lawful assessment, and the Department must assess the successors after taking account of the revised amalgamation returns. (¶¶ 9, 10, 11)
Result
Civil appeals allowed. The Division Bench judgment was set aside and the Single Judge judgment restored. The Department must receive the revised AY 2016–2017 returns and complete assessment taking account of the NCLT-sanctioned schemes. Pending applications disposed of.