TaxTMI 
TaxTMI 
2019 (5) TMI 558
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....o. 9 of 2015 overrides the scheme of amalgamation approved by the National Company Law Tribunal under Section 391 of the Companies Act, permitting the respective petitioners to file the revised return of income after the due dates as prescribed under Section 139(5) of the Income Tax Act, 1961. c) Whether Rule 12(3) of the Income Tax Rules, which requires filing of revised return of income electronically is mandatory and whether there can be exceptions to the said Rule. 2. These batch of Writ Petitions have been filed challenging the impugned orders of the respondent, recalling the notice under Section 143(2) of the Income Tax Act, for the following reasons: a) The revised return of income was filed by the respective petitioners after the due date for filing of revised return of income without obtaining condonation of delay in filing the revised return from the appropriate authority as per Section 119(2) (b) read with CBDT Circular No. 9 of 2015 b) The revised return of income was filed in manual form. 3. Brief facts leading to the filing of these Writ Petitions are as follows: 3. 1. Dalmia Cement (Bharath) Limited has filed W. P. [MD]No. 25318 of....
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....g revised Return of Income to give effect to approval of the scheme. 27-11-2018 27-11-2018 4. According to the respective petitioners, the above facts were duly brought to the knowledge of the first respondent vide letter dated 25. 11. 2018, filed on 27. 11. 2018 for both the assessment years. According to the respective petitioners, although, the scheme of amalgamation was sanctioned for Dalmia Power Limited in November 2017, but only to ensure filing of return of income, the management took the conscious call to file the revised return of the amalgamated company that is Dalmia Power Limited along with Dalmia Cements (Bharat) Limited, at the same time so that proper effect is given to income and expenditure, credit of prepaid taxes. According to the respective petitioners, as per paragraph 64 (c) of the scheme of arrangement and amalgamation duly approved by National Company Law Tribunal, the respective petitioners were entitled to revise its return of income on the basis of the National Company Law Tribunal approved scheme of arrangement and amalgamation, even if the prescribed time limit for revising such returns have lapsed. 5. According to the respective petitioner....
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....ourt has a valid statutory force. According to him, the amalgamation order passed by the National Company Law Tribunal gives statutory force to the respective petitioners to file revised return of income and therefore, a revised return of income beyond the prescribed period as stipulated under Section 139(5) of the Income Tax Act, 1961 read with Section 119(2)(b) of the Income Tax Act is not attracted for the instant case. According to him, referring to Section 119(2) (b) of the Income Tax Act, 1961, it deals with cases of genuine hardship whereas the case on hand does not involve such a situation. But, a revised return of income was filed by the respective petitioners for the respective assessment years only pursuant to the scheme of amalgamation approved by the National Company Law Tribunal which gives statutory force to the respective petitioners to file the revised return of income beyond the prescribed period as stipulated under Section 139(5) of the Income Tax Act, 1961. 11. According to the learned Senior Counsel, CBDT circular No. 9/2015 issued under Section 119(2)(b) of the Income Tax Act is not applicable for the instant cases as in the instant cases, revision of retur....
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....said judgment, the learned Senior Counsel submitted that once the scheme of amalgamation is sanctioned by Court, it comes into effect retrospectively from the appointed date. Appointed date is the date on which assets and liabilities of the transferor company vest in and has been transferred to the transferee company. In particular, he referred to paragraph Nos. 7 and 8 of the said judgment. b) Pentamedia Graphics Ltd. Vs. ITO reported in (2010) 236 CTR 204 (Mad): The learned Senior Counsel would submit that in an identical matter, following the judgment of the Hon'ble Supreme Court in the case of Marshall Sons & Co. (India) Ltd. , referred to supra, the learned Single Judge of this Court has held that the revenue will have to act as per the scheme of amalgamation approved by the High Court and return filed beyond the due date of filing revised return of income cannot be ignored by applying Section 139(5) of the Income Tax Act, 1961. c) JK Bombay (P) Ltd. Vs. New Kaiser-I Hind Spinning & Weaving Co. reported in AIR 1970 10414 (SC): Relying upon the said judgment, the learned Senior Counsel would submit that once the scheme of arrangement and ....
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....ome Tax Act, 1961 and hence, the respondent under the impugned orders have held the revised return of income to be invalid. 16. The learned Additional Solicitor General also drew the attention of this Court to Section 119(2)(b) of the Income Tax Act and submitted that the income tax authority can admit an application or claim for any exemption, deduction, refund or any other relief under the Income Tax Act after the expiry of the period only after getting approval from the Central Board of Direct Taxes. He also drew the attention of this Court to the Circular No. 9 of 2015, issued by the Central Board of Direct Taxes in exercising of its statutory powers under Section 119(2)(b) of the Income Tax Act. 17. According to him, the said circular governs the procedure to deal with applications for condonation of delay in filing returns under Section 119(2)(b) of the Income Tax Act, claiming to carry forward losses and set-off. According to him, since the petitioner has not followed the mandatory procedure as per the CBDT circular No. 9 of 2015, by obtaining approval from the Board for filing the revised return of income beyond the prescribed period, the respondent under the impugned....
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....y to the provisions of the Income Tax Act. Hence, according to him, any income tax issue arising out of the scheme of amalgamation shall be subject to the final decision of the income tax authority and the approval of the scheme by the National Company Law Tribunal will not deter the income tax authority from scrutinising the income tax returns filed by the respective petitioners and the decision of the income tax authority is binding on the petitioners. 19. According to the learned Additional Solicitor General, insofar as the learned Senior Counsel for the petitioners' reliance on the decision of the Hon'ble Supreme Court in the case of Marshall Sons & Co. (India) Ltd. , Vs. ITO reported in (1997) 223 ITR 809 (SC) and the decision of the High Court of Madras in the case of Pentamedia Graphics Ltd. , Vs. ITO reported in (2010) 236 CTR 204 (Mad), is concerned, he would submit that the said decisions are not applicable for the facts of the instant case since the respective petitioners have filed invalid revised return of income seeking to carry forward current year losses which is not in accordance with the provisions of Section 139(5) and 139(3) of the Income Tax Act and ....
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.... section 115JB read with section 115JAA of the Income Tax Act, credit of foreign taxes paid/withheld, if any, pertaining to Amalgamating Company and Transferor Company (relating to the Transferred Undertaking) as may be required consequent to implementation of this Scheme and wherever necessary to give effect to this Scheme, even if the prescribed time limits for filing or revising such returns have lapsed without incurring any liability on account of interest, penalty or any other sum. Amalgamated Company and Transferee Company shall have the right to claim refunds, tax credits, set-offs and/or adjustments relating to the income or transactions entered into by them by virtue of this Scheme with effect from Appointed Date. .... " 22. It is the case of the respondent that since the revised return of income was filed beyond the prescribed period as stipulated under Section 139(5) of the Income Tax Act, 1961, the revised returns of income filed by the petitioners are invalid. Section 139(5) of the Income Tax Act, reads as follows: "Return of income: 139(5). If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or....
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....if any, to be made by them shall be made within a period of thirty days from the date of receipt of such notice, failing which, it shall be presumed that they have no representations to make to the proposals. " 25. Eventhough notice was served on the respondent in the merger and de-merger proceedings before the National Company Law Tribunal, Chennai, the respondents failed to object to the scheme of arrangement and amalgamation and subsequently the said scheme of arrangement and amalgamation came to be approved by the National Company Law Tribunal on 16. 10. 2017 and 26. 10. 2017 for Dalmia Power Limited and on 20. 04. 2018 for Dalmia Cement (Bharat) Limited. 26. It is also an admitted fact that the scheme of arrangement and amalgamation which enables the respective petitioners to file revised returns of income beyond the prescribed period has attained finality as no appeal has been filed as against the amalgamation order passed by the National Company Law Tribunal, Chennai. 27. In the case of Marshall Sons & Co. (India) Ltd. Vs. ITO reported in (1997) 223 ITR 809 (SC). , relied upon by the learned Senior Counsel for the petitioners, the Hon'ble Supreme Court has held ....
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....t be made remediless on the basis of Section 139(5) of the Income Tax Act, 1961. The said provision is not applicable for the facts of the instant case as the revised return of income has been filed pursuant to the scheme of arrangement and amalgamation approved by the National Company Law Tribunal and not a case where there was discovery of any omission or any wrong statement under the original return of income filed for the assessment years 2015-2016 and 2016-2017. The Madras High Court following the judgment of the Hon'ble Supreme Court in the case of Marshall and sons referred to supra, held in the case of Pentamedia Graphics Ltd. , Vs. ITO reported in (2010) 236 CTR 204 (Mad), that the only course open to the revenue would be to act as per the scheme of amalgamation approved by the High Court effective from the appointed date and the taxing authorities are bound to take note of the state of affairs of assessee as on the appointed date and the return filed beyond the due date of filing revised return of income cannot be ignored on the strength of Section 139(5) of the Income Tax Act. 31. The learned Single Judge of this Court in the aforesaid decision in the case of Pent....
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..... Further, the circular No. 9 of 2015 dated 09. 06. 2014 issued by the Central Board of Direct Taxes relied upon by the respondent is issued under Section 119(2)(b) of the Income Tax Act, 1961, which reads as follows: "Instructions to subordinate authorities: 119(2)(b). the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise [any income-tax authority, not being a Commissioner (Appeals)] to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law;" 35. As seen from Section 119(2)(b) of the Income Tax Act, 1961, the discretionary power under Section 119(2)(b) is to be exercised by the Board only in cases where it considers desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any income tax authority not being a Commissioner (Appeals) to admit an application or claim for any exempti....
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....ed to delete the clause of the scheme which provided for filing of revised return beyond the stipulated time limit prescribed under the Income Tax Act, 1961. Further, in that decision, the Court was satisfied that the scheme was framed with the intention of contravening the provision of law. But, in the case on hand, it is not the case of the respondent that the scheme of arrangement and amalgamation approved by the National Company Law Tribunal is contrary to law and the respective petitioners have misused the approved scheme for contravention of any law. The only ground for rejection of the revised return of income filed by the respective petitioners by the respondent is that it has been filed beyond the prescribed period without obtaining condonation of delay from the Central Board of direct taxes as per Circular No. 9 of 2015 and the returns have been filed manually. Therefore, the decision of the Bombay High Court relied upon by the learned Additional Solicitor General for the respondent, is not applicable for the facts of the instant case. 40. Insofar as Rule 12(3) of the Income Tax Rules, 1962, which requires filing of returns electronically is concerned, the petitioner c....
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.... mistress, a lubricant, not a resistant in the administration of justice. " 45. In another decision of the Hon'ble Supreme Court in the case of reported in Ghanshyam Dass Vs. Dominion of India reported in 1984 (3) SCC 46, the Hon'ble Supreme Court observed as follows: "the Court reiterated the need for interpreting a part of the adjective law dealing with procedure alone in such a manner as to subserve and advance the cause of justice rather than to defeat it as all the laws of procedure are based on this principle. " 46. In a leading English judgment, in the case of In Re Coles [1907] 1 K. B. 1, 4, 'while explaining the handmaid of justice', has observed "that a Court cannot conduct its business without a code of procedure, I think that the relation of rules of practice to the work of justice is intended to be that of a handmaid rather than mistress and the Court ought not to be so far bound and tied by rules, which are after all only intended as general rules of procedure, as to be compelled to do what will cause injustice in the particular case". 47. In the case on hand, as observed earlier, Section 139(5) of the Income Tax Act is not applicable....
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....o accept revised returns of income beyond the prescribed period as stipulated under Section 139(5) of the Income Tax Act, 1961, the respective petitioners in the normal circumstances would have been able to file the revised returns of income, pursuant to the approval of the scheme of arrangement and amalgamation by the National Company Law Tribunal. Procedures aid the effective implementation of the Act of the legislature. 51. Rule 12(3) of the Income Tax Rules stipulates that returns of income can be filed only electronically. But the case on hand is an exceptional case where it has necessitated the respective petitioners to file the revised returns of income manually since the website of the income tax department refuses to accept the returns of income which has been filed beyond the prescribed period under Section 139(5) of the Income Tax Act, 1961. As already observed, Section 139(5) of the Income Tax Act, is not applicable for the facts of the instant case. 52. As per the Heydon's Rule of interpretation, the construction of procedural provisions are to be construed in a manner that advances and does not subvert the cause of justice. Therefore, this Court is of the co....