Validity of manual revised returns after scheme of demerger approval; directs acceptance and assessment in line with scheme.

Where a sanctioned demerger or scheme of arrangement delays filing, revised income tax and indirect tax returns filed manually must be accepted and processed to give effect to the scheme; the court applied the Supreme Court precedent in Dalmia Power to reject reliance on a CBDT circular that barred late revised returns and directed acceptance of manual revised returns for the relevant assessment years with assessment orders to be completed within 12 weeks. The operative effect is mandatory processing of revised returns and assessment adjustments in conformity with the NCLT sanctioned scheme.

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Issues Involved:
1. Refusal to accept manual revised returns for Assessment Year 2014-15 to Assessment Year 2021-22.
2. Applicability of the Supreme Court judgment in Dalmia Power Ltd. vs. ACIT.
3. Relevance of CBDT Circular and section 119(2)(b) of the Income Tax Act.
4. Applicability of newly inserted section 170A of the Finance Act, 2022.

Summary:

Issue 1: Refusal to Accept Manual Revised Returns
The petitioner, a listed company, sought a writ of Mandamus to direct Respondent No. 1 to accept and process its manual revised returns for Assessment Year 2014-15 to Assessment Year 2021-22. The petitioner entered into a scheme of arrangement with Hind Lamps Limited, which required filing revised tax returns post-demerger. Due to the COVID-19 pandemic, the preparation of these documents was delayed, and the petitioner filed manual revised returns as the due date under section 139(5) had expired. Respondent No. 1 refused to accept these returns, citing the lack of electronic filing options and adherence to section 119 of the Act.

Issue 2: Applicability of Supreme Court Judgment in Dalmia Power Ltd.
The petitioner relied on the Supreme Court's decision in Dalmia Power Ltd. v. ACIT, which allowed the filing of revised returns post the due date due to the pendency of amalgamation proceedings. Respondent No. 1 acknowledged the relevance of this judgment but stated that he was bound by CBDT instructions.

Issue 3: Relevance of CBDT Circular and Section 119(2)(b)
Respondent No. 1 cited section 119(2)(b) and Circular No. 9 of 2015, suggesting that the petitioner should file an application before CBDT for relief as the refund claimed exceeded Rs. 50 lakhs. The court noted that Respondent No. 1 should not rely solely on the CBDT Circular when the Supreme Court judgment in Dalmia Power Ltd. was applicable.

Issue 4: Applicability of Section 170A of the Finance Act, 2022
Respondent No. 1 also referred to section 170A, inserted by the Finance Act, 2022, which was not applicable to the petitioner's case as it pertains to Assessment Year 2022-23 onwards. The court found this defense unacceptable since the petitioner's case involved Assessment Years 2014-15 to 2021-22.

Judgment:
The court set aside the impugned order dated 3rd June 2022 and directed Respondents to accept and process the petitioner's manual revised returns for Assessment Years 2014-15 to 2021-22 within 12 weeks. The jurisdictional AO was instructed to provide notice and a personal hearing to the petitioner if any variations prejudicial to the petitioner were proposed. The petition was disposed of with no observations on the merits of the revised returns being filed.

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