TaxTMI 
TaxTMI 
TaxTMI 
2019 (5) TMI 558
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....pproved 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 2018 for the assessment year 2015-2016 and W. P. [MD]No. 25317 of 2018 ....
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....y 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 petitioners, the respondent ought to have acted upon the revised returns of the respective petitioners, particularly when the scheme of arrangement and amalgamation approved by th....
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....ile 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 returns have not been filed on the ground of genuine hardship but has been filed only pursuant to the amalgamation order passed by the National Company Law Tribunal. According to hi....
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....s 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 amalgamation has been approved by the Court, the same does not operate as a mere arrangement, but it becomes a statutory force. d) In Re: Telesound India Ltd. , [Company Petition No. 54 of 1980 dated 05. 12. 1980....
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....ome 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 orders has rightly held the revised return of income filed by the respective petitioners as invalid. 18. The learned Additional Solicitor General then drew the attention of this Court to the following authorities in support of his submissi....
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.... 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 also not in accordance with Rule 12(3) of the Income Tax Rules, 1962 and the respective petitioners have also not complied with the procedural requirements in accordance with Section 119(2)(b) read with CBDT Circular No. 9 of 2015 dated 09. 06. 2015, which according to the learned Additional....
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....ve 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 any wrong statement therein, he may furnish a revised return at any time before [the expiry of one year from] the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. ]" 23. As seen from Section 139(5) of the Income Tax Act, 1961, they relate to cases where the ....
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....l 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 as follows: "a) Once the scheme is sanctioned by Court, it comes into effect retrospectively from the Appointed Date. The Appointed Date is the date on which assets and liabilities of the transferor company vest in and stand transferred to the transferee company. b) Appointed Date is the date which is relevant for the....
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....y 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 Pentamedia Graphics referred to supra rejected the contention of the revenue that filing of revised return of income pursuant to a scheme of arrangement approved by the Court beyond the prescribed period stipulated under Section 139(5) of the Income Tax Act, 1961 is non-est in the eye of law. In the case on hand also, only based on the scheme of arr....
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....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 exemption, deduction, refund or any other relief under the Income Tax Act after the expiry of the period specified by or under the Income Tax Act for making such application or claim and deal with the same on merits in accordance with law. 36. Section 119(2)(b) of the Income Tax Act has no relevance to the facts of the instant case as the circular No. 9 of 2015 issued by ....
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....f 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 cannot be rendered remediless just because the income tax website did not allow a window to the respective petitioners for filing returns of income electronically as the revised returns of income were filed beyond the prescribed period as stipulated under Section 139(5) of the Income Tax Act, 1961. 41. As observed earlier, the revised return of income has not been filed ....
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....r 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 in cases where revised returns of income have been filed pursuant to the scheme of arrangement and amalgamation approved by the National Company Law Tribunal. The circular No. 9 of 2015 issued by the Central Board of Taxes under Section 119(2)(b) of the Income Tax Act, 1961, is not applicable in cases where revised returns of income have been filed pursuant to the scheme of arrangement and amalgamation appr....
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....egislature. 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 considered view that the respondent ought not to have rejected the filing of the revised return of income by the respective petitioners on the ground that the same has been filed manually instead of electronically. Therefore, Rule 12(3) of the Income Tax Rules, 1962 will not bar the respective petitioners to file the revised returns of income manually as the revised returns of income have been filed only pursuant to....