TaxTMI 
TaxTMI 
2026 (2) TMI 643
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....s Act, 2013. It has two distinct business segments, viz., Consumer Products segment being (appliances, fans, lightings etc.) and Engineering Procurement and Construction (EPC) segment (illumination business, power transmission and power distribution, etc.). It filed its original return of income for the assessment year 2023-24 on 31.10.2023, declaring a total income of Rs. 175,66,76,180/-. 4. It entered into a Scheme of Arrangement with BAJEL Projects Limited for the demerger of its Power transmission and power distribution business to them. The said scheme was approved by the NCLT by its Order dated 08.06.2023. The appointed date of demerger was 01.04.2022, and the effective date, based on fulfillment of the conditions referred to in the scheme and the NCLT order, was 01.09.2023. Pursuant thereto, it prepared revised special purpose financial statements and Tax Audit report considering the effect of demerger and also filed its revised return of income for assessment year 2023-24 on 30.12.2023, declaring a total income of Rs. 183,45,46,964/-. 5. Subsequently, the Petitioner entered into a Scheme of amalgamation with Nirlep Appliances Pvt. Ltd. This Scheme was approved by the ....
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....roceedings initiated by issue of notice under Section 143(2) on the basis of such modified return. 8. In the course of assessment proceedings, notices dated 21.01.2025 and 25.02.2025 were issued seeking various information and clarifications. Question 4 of the notice dated 21.01.2025 specifically referred to the substantial amount of reduction of taxable income between the original and the revised computation after amalgamation with Nirlep Appliances Pvt. Ltd. The Petitioner was therefore requested to furnish a detailed comparative computation in this regard. Further, various clarifications sought therein were in respect of change in the closing value of balance sheet items for the earlier years and opening balance of such items for the current year. In response to the same, the Petitioner filed detailed submissions vide its letters dated 28.01.2025, 17.02.2025 and 21.02.2025. Apart from providing the statement explaining the difference between the original return of income filed on 31.10.2023, the revised return of income filed on 30.12.2023 and the modified return of income filed on 16.09.2024, an explanation was also given with respect to the carry forward and set off of brou....
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....ection of the said mistake, a rectification application dated 16.04.2025 has been filed by the Petitioner with Respondent No. 1, and the said issue has also been raised in the appeal filed by it before the Commissioner of Income-tax (Appeals) against the assessment order dated 26.03.2025. Respondent No. 2 and the CIT(A) will independently consider the said claim of the Petitioner in accordance with law. 11. However, the grievance raised by the Petitioner in the present Writ Petition concerns the issue of the impugned notice dated 24.06.2025 under Section 143(2) of the IT Act seeking to assess the modified return of income filed by it on 16.09.2024. Since the claims made in the said return of income already stood adjudicated in the assessment order dated 26.03.2025, and which was also in accordance with the provisions of Section 170A, the Petitioner requested Respondent No. 2 to drop the said proceedings as not in accordance with law. However, on 14.11.2025, another impugned notice was issued under Section 142(1) of the IT Act, seeking various clarifications and information. Aggrieved by these notices, the Petitioner has filed the present Writ Petition. 12. In this backdrop, t....
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....on 143(2) of the IT Act. That the impact of the modified return filed under Section 170A, including the issues connected therewith, will be considered in the said assessment proceedings. Lastly, it is also urged that the said Section 170A does not override the statutory obligation of the Assessing Officer to examine, verify and assess the correctness of the claim/s arising from such modified return in accordance with the provisions of the IT Act. 14. In the rejoinder, it was submitted that a bare perusal of the note from the office of the DDIT (Systems), Delhi, [as reproduced in paragraph 6 of the Affidavit-in-reply] shows that the impugned notice dated 24.06.2025 issued under Section 143(2) of the IT Act was without application of any mind and in a mechanical manner. Further, since Section 170A(2)(b) specifically mandates that the Assessing Officer shall pass an order assessing the total income of the relevant Assessment Year in accordance with the order of the business reorganisation, and taking into account the modified return, the Respondents have erred in urging that there is no express prohibition against selection of a modified return of income for scrutiny after passing ....
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....revious year to which such order applies, the successor shall furnish, within a period of six months from the end of the month in which the order was issued, a modified return in such form and manner, as may be prescribed, in accordance with and limited to the said order. (2) Where the assessment or reassessment proceedings for an assessment year relevant to a previous year to which the order in respect of the business reorganisation applies,- (a) have been completed on the date of furnishing of the modified return in accordance with the provisions of subsection (1), the Assessing Officer shall pass an order modifying the total income of the relevant assessment year determined in such assessment or reassessment, in accordance with such order and taking into account the modified return so furnished; (b) are pending on the date of furnishing of the modified return in accordance with the provisions of sub-section (1), the Assessing Officer shall pass an order assessing or reassessing the total income of the relevant assessment year in accordance with the order of the business reorganisation and taking into account the modified return so furnished. (....
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....ed in such assessment or reassessment in accordance with such order and taking into account the modified return so furnished. Therefore, an independent scrutiny of the modified return of income is contemplated only in such cases where the assessment stood completed on the date of furnishing of the modified return of income. In the present case, the modified Return of Income has been filed on 16.09.2024, and the assessment order has been passed thereafter on 26.03.2025. Hence, the said clause (a) has no application to the present case. In the present case, as referred to hereafter, clause (b) of Section 170A(2) will apply. 18. As per clause (b) thereof, in cases, where assessment proceedings for the relevant assessment year are pending on the date of furnishing of the modified return of income, the assessing officer has to pass an order assessing or reassessing the total income of the said assessment year in accordance with the order of the business reorganisation and taking into account the modified return so furnished. In the present case, the said clause will be applicable as the revised return of income filed on 30.12.2023 had been selected for scrutiny by issuance of notice ....