TaxTMI 
TaxTMI 
2019 (12) TMI 991
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.... 2013. 2. The factual background of this case briefly stated, is that: 2.1 The Appellant No.1 M/ s Dalmia Power Limited and Appellant No.2 M/ s Dalmia Cement (Bharat) Limited are public limited companies, incorporated under the Companies Act, 1956. The Appellants have their registered offices at Dalmiapuram Lalgudi Taluk, Dalmiapuram, District Tiruchirappalli, Tamil Nadu. 2.2 The Appellant No.1 is engaged in the business of building, operating, maintaining, and investing in power and power related businesses, directly or through downstream companies. The Appellant No.2 is engaged in the business of manufacturing and selling of cement, generation of power, maintaining and operating rail systems and sold waste management system which provide services to the cement business. 2.3 The Appellant No.1 filed its original Return of Income under Section 139 (1) of the Income Tax Act on 30.09.2016 for A.Y. 2016-2017 declaring a loss of Rs. 6,34,33,806/. Similarly, Appellant No.2 filed its original Return of Income under Section 139 (1) of the Income Tax Act on 30.11.2016 for A.Y. 2016-2017 declaring NIL income (after setting off Brought Forward Loss amounting to ....
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....ity to file the revised Returns before the prescribed date of 31.03.2018. 2.9 A summary of the dates relevant to the case of Appellant No.1 are tabulated as under: Sl. No. Particulars A.Y. 2016-17 1. Appointed Date of the Scheme 01.01.2015 2. Filing of original Return of Income under Section 139 (1) 3 0.09.2016 3. Due date for filing revised Return of Income u/s 139(5) 31.03.2018 4. Effective Date of the Scheme 30.10.2018 5. Date of filing revised Return of Income to give effect to approval of the scheme 27.11.2018 2.10 A summary of the dates relevant to the case of Appellant No.2 are tabulated as under: Sl. No. Particulars A.Y. 2016-17 1. Appointed Date of the Scheme 01.01.2015 2. Filing of original Return of Income 30.11.2016 3. Due date for filing revised Return of Income u/s 139(5) 31.03.2018 4. Effective Date of the Scheme 30.10.2018 5. Date of filing revised Return of Income to give effect to approval of the scheme 27.11.2018 2.11 On 04.12.2018, the Department issued a Notice under Section 143(2) of the Income Tax Act to give effect to the approval of the Schem....
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....sed Returns of Income are filed by the assessee pursuant to a Scheme of Arrangement and Amalgamation approved and sanctioned by the NCLT. Accordingly, the Single Judge directed the Department to receive the revised Returns filed pursuant to the approval of the Schemes of Arrangement and Amalgamation by the NCLT, Chennai and complete the assessment for A.Y. 2015-2016 and A.Y. 2016-2017 in accordance with law within a period of 12 weeks. 2.16 The Department filed Writ Appeals under Clause 15 of the Letters Patent Act challenging the Judgment & Order dated 30.04.2019 passed by the Single Judge. A Division Bench of the Madras High Court vide the impugned Judgment dated 04.07.2019 allowed the Writ Appeals, and reversed the Judgment of the Single Judge. The Division Bench directed the Appellants to comply with the procedure for filing belated revised Returns of Income, and held that Clause 64 of the Scheme can only be construed as an enabling clause. It cannot be inferred that the Department agreed to consider the revised Returns of Income, irrespective of whether it complies with the procedural and statutory requirements under the Income Tax Act, merely because Clause 64 of the....
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....proved and sanctioned by the NCLT, Chennai vide Orders dated 16.10.2017, 20.10.2017 and Corrigendum dated 26.10.2017 shows that the Appellants were entitled to file revised Returns of Income, after the prescribed time limit for filing or revising the returns had lapsed, without incurring any liability on account of interest, penalty or any other sum. Clause 63 (c) of the said Scheme is set out hereinbelow for ready reference: "(c) DCBL [Appellant No.2] shall be entitled to, amongst others, file/or revise its income tax returns, TDS/TCS returns, wealth tax returns, service tax, excise duty, sales tax, value added tax, entry tax, cess, professional tax or any other statutory returns, if required, credit for advance tax paid, tax deducted at source, claim for sum prescribed under Section 43B of the Income Tax Act on payment basis, claim for deduction of provisions written back by DCBL previously disallowed in the hands of (i) DCB Power pertaining to Power Undertakings and (ii) ACHL and/or pertaining to Amalgamating Undertaking 1, under the Income Tax Act, credit of tax under Section 115JB read with Section 115JAA of the Income Tax Act, credit of foreign taxes paid/withheld....
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....ed to claim credit or refund for such taxes or duties." [emphasis supplied] 4.2 Similarly, Clause 64 (c) of the Scheme of Arrangement and Amalgamation between Odisha Cement Ltd., OCL India Limited, Dalmia Cement East Ltd., Shri Rangam Securities & Holdings Ltd., Dalmia Bharat Cement Holdings Ltd., Appellant No.1 and Appellant No.2 and their respective shareholders and creditors, as approved and sanctioned by the NCLT, Chennai on 20.04.2018 and 01.05.2018, shows that provisions were incorporated to enable the Appellants to file revised Returns even after the prescribed time limit for filing or revising such Returns had lapsed, without incurring any liability on account of interest, penalty or any other sum. Clause 64 (c) of the said Scheme is extracted here-in-below for ready reference: "(c) Amalgamated Company and Transferee [Appellant Nos. 1 and 2 ] Company shall be entitled to, amongst others, file/or revise its income tax returns, TDS/TCS returns, wealth tax returns, service tax, excise duty, sales tax, value added tax, entry tax, cess, professional tax or any other statutory returns, if required, credit for advance tax paid, tax deducted at source, claim....
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....ll require that representations, 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 on the proposals." [ emphasis supplied ] Sub-section (5) of Section 230 requires that a notice of the meeting under subsection (3) of Section 230 along with all the documents pertaining to the scheme, shall be sent to the Central Government, and statutory authorities such as the Income Tax Department, RBI, SEBI, ROC etc. and such other sectoral regulators or authorities which are likely to be affected by the compromise or arrangement. The statutory authorities could raise objections within 30 days from the date of receipt of the notice, failing which, it would be presumed that they had no representation to make on the proposed schemes of compromise, arrangements and amalgamations. 4.4 Similarly, Rule 8(3) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 provides that any representation made to the statutory authorities notified under Section 230(5), shall be sent to the NCLT within a period of thirty days from the date of....
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....The Schemes come into effect from the Appointed Date, unless modified by the Court. This Court in Marshall Sons & Co. (India) Ltd. v. ITO Marshall Sons & Co. (India) Ltd. v. ITO (1997) 2 SCC 302 held that where the Court does not prescribe any specific date but merely sanctions the scheme presented, it would follow that the date of amalgamation/date of transfer is the date specified in the scheme as "the transfer date". It was held that: "14. Every scheme of amalgamation has to necessarily provide a date with effect from which the amalgamation/transfer shall take place. The scheme concerned herein does so provide viz. 1-1-1982. It is true that while sanctioning the scheme, it is open to the Court to modify the said date and prescribe such date of amalgamation/transfer as it thinks appropriate in the facts and circumstances of the case. If the Court so specifies a date, there is little doubt that such date would be the date of amalgamation/date of transfer. But where the Court does not prescribe any specific date but merely sanctions the scheme presented to it - as has happened in this case - it should follow that the date of amalgamation/date of transfer is the date specif....
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....ered into Schemes of Arrangement and Amalgamation with 9 Transferor Companies in 2017. The Schemes were finally sanctioned and approved by the NCLT, Chennai vide final orders dated 20.04.2018 and 01.05.2018. The Appointed Date as per the Schemes was 01.01.2015. Consequently, the Transferor/ Amalgamating Companies ceased to exist with effect from the Appointed Date, and the assets, profits and losses etc. were transferred to the books of the Appellants/ Transferee Companies/Amalgamated Companies. The Schemes incorporated provisions for filing the revised Returns beyond the prescribed time limit since the Schemes would come into force retrospectively from the Appointed Date i.e. 01.01.2015. Accordingly, the Appellants filed their Revised Returns on 27.11.2018. The re-computation would have a bearing on the total income of the Appellants with respect to the A.Y. 2016-2018, particularly on matters in relation to carrying forward losses, unabsorbed depreciation etc. 5. The counsel appearing for the Department relied on Section 139(5) and 119(2)(b) of the Income Tax Act r.w. Circular No.9 of 2015 issued by the CBDT to contend that the Appellant ought to have made an application ....
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....119(2)(b) of the Income Tax Act is reproduced here-in-under for ready reference: "119. Instructions to subordinate authorities. (2) Without prejudice to the generality of the foregoing power,- ... (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." On a plain reading of Section 119(2)(b), we find that this provision would not be applicable where an assessee has restructured their business, and filed a revised Return of Income with the prior approval and sanction of the NCLT, without any objection from the Department. Rules of procedure have been construed to be the handmaiden of justice. Kailash v Nankhu (2005) 4 SCC 480; State of Punjab v Shamlal Murari (1976) 1 SCC 719 The purpose of assessment proceedings....