Case Law Details
TSI Business Parks Hyderabad Pvt Ltd Vs DCIT (Telangana High Court)
In Dalmia Power Limited v. ACIT (2019) 112 Taxmann. com 252 (SC), the issue before the Supreme Court was whether the Income Tax Department ought to have permitted the assessee companies to file the revised income tax return for the assessment year 2016-2017 after expiry of the due date prescribed under Section 139(5) of the Act on account of pendency of proceedings for amalgamation of the assessee companies with other companies under Sections 230 to 232 of the Companies Act, 2013.
We may mention that in the aforesaid case, the scheme of amalgamation was approved and sanctioned by the NCLT after the due date of filing the revised return for the assessment year 2016-2017. Supreme Court referred to the provisions of Section 139(5) of the Act and opined that the said provision would not be applicable in a case where revised return could not be filed on account of the time taken to grant sanction to the scheme of amalgamation by NCLT. Section 139(5) of the Act deals with filing of revised return within a period of one year upon discovery of an omission or wrong statement made in the initial return of income. Supreme Court also referred to Section 170 of the Act and held that it is incumbent upon the Income Tax Department to assess the total income of the successor company in respect of the previous assessment year after the date of succession. Income Tax Department is required to assess the income of the successor company after taking into account the revised return filed after amalgamation of the company. In the facts and circumstances of that case, Supreme Court directed the Income Tax Department to receive the revised return of income for the assessment year 2016-2017 filed by the appellants therein and to complete the assessment for the said assessment year after taking into account the scheme of amalgamation as sanctioned by the NCLT.
Upon thorough consideration, we are of the view that the decision of the Supreme Court in Dalmia Power Limited (supra) is squarely applicable to the facts of the present case. It is because of circumstances beyond the control of the petitioner that the revised return could not be filed before the due date. However, under Section 170 of the Act, Income Tax Department is obligated to assess the total income of the assessee of the previous assessment year post-amalgamation.
That being the position, we set aside the order of respondent No.1 dated 11.01.2023 and direct him to take on board, the revised return of income filed by the petitioner for the assessment year 2021-2022 on 23.12.2022 and thereafter to process the same in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Heard Mr. Deepak Chopra, learned counsel for the petitioner; Ms. K. Mamata Choudary, learned Senior Standing Counsel, Income Tax Department for respondent No.1; and Mr. G. Praveen Kumar, learned Deputy Solicitor General of India for respondent No.2.
2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks a direction to the respondents to take on record the revised return filed by it for the assessment year 2021-2022 on 23.12.2022 along with forwarding letter dated 16.12.2022 after taking note of the scheme of amalgamation.
3. Petitioner- M/s. TSI Business Parks (Hyderabad) Private Limited (transferee company) and M/s. Millenial Business Park Private Limited (transferor company) had resolved on 03.06.2020 to amalgamate the transferor company with the transferee company. Therefore, a joint petition was filed under Sections 230 to 232 read with Section 66 of the Companies Act, 2013 and Rule 3 of the Companies (Compromise, Arrangements and Amalgamations) Rules, 2016 before the National Company Law Tribunal, Hyderabad (NCLT). Ultimately on 26.04.2021, NCLT approved the scheme of amalgamation. Consequently, the transferor company got merged with the transferee company with effect from 01.04.2020.
4. In connection with the filing of revised return of income for the assessment year 2021-2022 following such amalgamation, petitioner wrote to respondent No.1 on 16.12.2022 that after amalgamation, the entire accounts etc., had to be revised and in the process, the due date for filing income tax revised return for the said assessment year being 31.03.2022 had long expired. Along with the said letter, petitioner had filed the revised return of income manually on 23.12.2022. In this letter, petitioner had relied upon the decision of the Supreme Court in Dalmia Power Limited v. Assistant Commissioner of Income Tax, Circle-I Trichy1.
5. Respondent No.1 passed an order dated 11.01.2023 stating that the manual return of income filed by the petitioner on 23.12.2022 for the assessment year 2021-2022 was beyond the due date of filing the revised return of income for the said assessment year. Observing that the said return of income could not be acted upon in the absence of any order of condonation of delay by the competent authority, request of the petitioner was turned down.
6. Aggrieved thereby, present writ petition came to be filed.
7. When the writ petition was moved on 14.03.2023, learned Senior Standing Counsel sought for time to obtain instructions regarding acceptance of the revised return of income of the petitioner in terms of the scheme of amalgamation approved by the NCLT.
8. In the hearing today, learned Senior Standing Counsel has placed before the Court provisions of Section 170A of the Income Tax Act, 1961 (briefly ‘the Act’ hereinafter) inserted in the statute by the Finance Act, 2022 with effect from 01.04.2022. She has also placed before the Court, a copy of notification dated 19.09.2022 issued by the Central Board of Direct Taxes (CBDT), which deals with filing of modified return of income following business reorganization in terms of Section 170A of the Act and the format of such modified return of income.
9. However, we may mention that the assessment year in the present case is 2021-2022. Therefore, neither the provisions of Section 170A of the Act nor the notification dated 19.09.2022 would be applicable to the facts of the present case as Section 170A had come into effect from 01.04.2022 whereas the notification had come into effect from 01.11.2022.
10. In Dalmia Power Limited (supra), the issue before the Supreme Court was whether the Income Tax Department ought to have permitted the assessee companies to file the revised income tax return for the assessment year 2016-2017 after expiry of the due date prescribed under Section 139(5) of the Act on account of pendency of proceedings for amalgamation of the assessee companies with other companies under Sections 230 to 232 of the Companies Act, 2013.
11. We may mention that in the aforesaid case, the scheme of amalgamation was approved and sanctioned by the NCLT after the due date of filing the revised return for the assessment year 2016-2017. Supreme Court referred to the provisions of Section 139(5) of the Act and opined that the said provision would not be applicable in a case where revised return could not be filed on account of the time taken to grant sanction to the scheme of amalgamation by NCLT. Section 139(5) of the Act deals with filing of revised return within a period of one year upon discovery of an omission or wrong statement made in the initial return of income. Supreme Court also referred to Section 170 of the Act and held that it is incumbent upon the Income Tax Department to assess the total income of the successor company in respect of the previous assessment year after the date of succession. Income Tax Department is required to assess the income of the successor company after taking into account the revised return filed after amalgamation of the company. In the facts and circumstances of that case, Supreme Court directed the Income Tax Department to receive the revised return of income for the assessment year 2016-2017 filed by the appellants therein and to complete the assessment for the said assessment year after taking into account the scheme of amalgamation as sanctioned by the NCLT.
12. Upon thorough consideration, we are of the view that the decision of the Supreme Court in Dalmia Power Limited (supra) is squarely applicable to the facts of the present case. It is because of circumstances beyond the control of the petitioner that the revised return could not be filed before the due date. However, under Section 170 of the Act, Income Tax Department is obligated to assess the total income of the assessee of the previous assessment year post-amalgamation.
13. That being the position, we set aside the order of respondent No.1 dated 11.01.2023 and direct him to take on board, the revised return of income filed by the petitioner for the assessment year 2021-2022 on 23.12.2022 and thereafter to process the same in accordance with law.
14. Writ Petition is accordingly allowed. No costs.
As a sequel, miscellaneous petitions, pending if any, stand closed.
Notes:-
1 (2019) 112 Taxmann.com 252 (SC)
