Court upholds NCLT-approved scheme, permits revised tax returns post-deadline, stresses statutory force over circulars.

The court held that the scheme of amalgamation approved by the National Company Law Tribunal (NCLT) is binding on income tax authorities, allowing for the filing of revised returns beyond the stipulated period without incurring penalties. The court determined that Circular No. 9 of 2015 does not override the NCLT-approved scheme, emphasizing the statutory force of court-sanctioned schemes over administrative circulars. Additionally, the court found that the mandatory electronic filing requirement under Rule 12(3) of the Income Tax Rules should not hinder the filing of revised returns in exceptional cases like this, directing the income tax authorities to accept and process the revised returns within twelve weeks.

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Issues Involved:
1. Binding nature of the scheme of amalgamation approved by the National Company Law Tribunal (NCLT) on income tax authorities for filing revised returns beyond the period stipulated under Section 139(5) of the Income Tax Act, 1961.
2. Applicability of Circular No. 9 of 2015 issued under Section 119(2)(b) of the Income Tax Act, 1961 in overriding the scheme of amalgamation approved by the NCLT.
3. Mandatory nature of Rule 12(3) of the Income Tax Rules for electronic filing of revised returns and the possibility of exceptions.

Issue-wise Detailed Analysis:

1. Binding Nature of Scheme of Amalgamation:
The court examined whether the scheme of amalgamation approved by the NCLT under Section 391 of the Companies Act is binding on income tax authorities for filing revised returns beyond the stipulated period under Section 139(5) of the Income Tax Act, 1961. The court noted that the scheme of amalgamation, which was approved by the NCLT, permitted the petitioners to file revised returns even beyond the prescribed period. This was supported by paragraph 64(c) of the scheme, which allowed the filing of revised returns without incurring any liability on account of interest, penalty, or any other sum. The court held that Section 139(5) of the Income Tax Act, which deals with the discovery of omissions or wrong statements in the original return, is not applicable in this case since the revised returns were filed pursuant to the scheme of amalgamation. The court referenced the Supreme Court’s decision in Marshall Sons & Co. (India) Ltd. Vs. ITO, which established that once a scheme is sanctioned by the court, it comes into effect retrospectively from the appointed date and has statutory force. Therefore, the court concluded that the income tax authorities are bound to act according to the scheme approved by the NCLT.

2. Applicability of Circular No. 9 of 2015:
The court analyzed whether Circular No. 9 of 2015 issued under Section 119(2)(b) of the Income Tax Act overrides the scheme of amalgamation approved by the NCLT. The court observed that the circular was issued to avoid genuine hardship in cases where applications or claims for exemptions, deductions, refunds, or other reliefs are made after the expiry of the period specified by the Income Tax Act. However, in the present case, the revised returns were filed pursuant to the scheme of amalgamation approved by the NCLT, which has statutory force. The court held that the circular is not applicable in this context as it deals with cases of genuine hardship, whereas the revised returns in this case were necessitated by the amalgamation order. The court referenced the Supreme Court’s decision in J. K. Bombay (P) Ltd. Vs. New Kaiser-I Hind Spinning & Weaving Co., which established that a scheme sanctioned by the court has statutory force and overrides any administrative circulars issued by the Central Board of Direct Taxes (CBDT).

3. Mandatory Nature of Rule 12(3) of the Income Tax Rules:
The court examined whether Rule 12(3) of the Income Tax Rules, which mandates the electronic filing of revised returns, is applicable in this case. The court noted that the petitioners were unable to file the revised returns electronically due to the Income Tax Department’s website not allowing such filings beyond the prescribed period under Section 139(5) of the Income Tax Act. The court held that the petitioners cannot be rendered remediless due to the procedural requirements of electronic filing, especially when the revised returns were filed pursuant to the scheme of amalgamation approved by the NCLT. The court emphasized that procedural rules should serve the cause of justice and should not obstruct it. The court referenced the Supreme Court’s decision in Kailash Vs. Nanhku, which held that procedural laws are meant to aid justice and should not be interpreted in a manner that causes injustice. Therefore, the court concluded that Rule 12(3) does not bar the filing of revised returns manually in this exceptional case.

Conclusion:
The court quashed the impugned orders and directed the income tax authorities to receive the revised returns filed by the petitioners pursuant to the scheme of amalgamation approved by the NCLT and complete the assessment for the relevant assessment years within twelve weeks. The court allowed the writ petitions without any order as to costs.

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