TaxTMI 
TaxTMI 
2026 (4) TMI 577
X X X X Extracts X X X X
X X X X Extracts X X X X
....t was pending on the date of filing the modified return of income, and therefore, while passing the order under Section 143(3) of the Act, the modified return of income was taken into consideration and the total income for A.Y. 2022-23 was determined. The Revenue has filed its Reply dated 20.02.2026 to the Petition, which is affirmed on behalf of Respondent No. 1 by one Mr. Deepak Kumar, DCIT, Circle-1, Nashik. 4. The pleadings are complete, and therefore, we have heard the Petition finally. 5. The facts and circumstances leading to the notices impugned in the present Petition are as follows: a) The Petitioner filed its return of income for A.Y. 2023-24 on 27.11.2023 declaring a total income of Rs. 5,32,85,870/-. b) Intimation under Section 143(1) was issued on 05.12.2023 without making any adjustment in the income declared. c) The Petitioner had filed an application for Amalgamation with NCLT on 28.12.2021 amalgamating its wholly owned subsidiary company, M/s. Promatics Solutions (I) Pvt. Ltd., for which the Appointed Date was fixed as 01.04.2021. d) The NCLT passed an order dated 05.07.2024 and approved the amalgamation of M/s. Promatics ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....manner as may be prescribed. As per sub-Section (2) of Section 170A of the Act, in so far as it is relevant for the present purpose, where the assessment proceedings for an assessment year, relevant to a previous year to which the order in respect of reorganisation applies, are completed on the date of furnishing of the modified return, the assessing officer is required to pass an order modifying 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. In the present case, the original return of income filed under Section 139(1) on 27.11.2023 [for A.Y. 2023-24], was accepted under Section 143(1) of the Act by issuing the Intimation on 05.12.2023. Thereafter a notice under Section 143(2) of the Act was not issued on or before 30.06.2024 as provided in proviso to Section 143(2) of the Act. Therefore, the assessment proceedings were completed and not pending at the time of filing of the modified return of income on 23.01.2025. Hence, as per Section 170A(2)(a) of the Act, Respondent No. 3 was under an obligation to pass the order modifying the total income of A.Y. 2023-24 dete....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 170A of the Act was introduced to enable the Assessing Officer to correctly assess the total income in cases of business reorganisation approved by a Court or Tribunal after the return of income for the relevant assessment year is filed. It was further pleaded by the learned Counsel for the Respondents that the return of income filed under Section 170A of the Act is to be verified by using the tools under the Act, and therefore, the interpretation suggested by the Petitioner would render Section 170A of the Act unfeasible. It was also submitted that the notice under Section 142(1) of the Act cannot be faulted merely because it seeks information beyond the amalgamation order of the NCLT. It was further submitted that it is incorrect to contend that issuance of notices under Sections 143(2) and 142(1) of the Act amounts to a back door reassessment. It was submitted that the Respondents have acted strictly within the framework of the Act and have not exceeded their jurisdiction. 9. In rejoinder, it was submitted by the learned Counsel for the Petitioner that the modified return of income filed is to be scrutinised as provided in sub-Section (2) of Section 170A of the Act and that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icer can scrutinise the return of income as if the original assessment is being carried out where the assessment was completed on the date of filing the modified return for the relevant assessment year, then no distinction will be left between cases covered by clause (a) and those covered by clause (b) of sub-Section (2) of Section 170A of the Act. 11. We have heard the rival submissions made by both parties. Since the issue arising for our consideration concerns interpretation of Section 170A of the I. T. Act, 1961, it would be appropriate to reproduce the same: "Effect of order of tribunal or court in respect of business reorganization. 170A. (1) Notwithstanding anything to the contrary contained in Section 139, in a case of business reorganization, where prior to the date of order of a High Court or tribunal or an Adjudicating Authority as defined in clause (1) of Section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016) (hereinafter referred to as order in respect of business reorganisation), as the case may be, any return of income has been furnished by an entity to which such order applies under the provisions of Section 139 for any assessment ye....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... business reorganisation within a period of six months from the end of the month in which the said order was issued. In the present case, the Petitioner had filed its original return of income for the A.Y. 2023-24 on 23.11.2023. The scheme of amalgamation of M/s. Promatics Solutions (I) Private Limited with the Petitioner was passed on 05.07.2024 by the NCLT. Therefore, the provisions of Section 170A(1) of the Act are applicable to the case of the Petitioner and accordingly the Petitioner filed the modified return of income on 23.01.2025. 13. Section 170A(2) of the IT Act makes a distinction between two scenarios, one being that covered by clause (a) thereof, where the assessment stood completed on the date of furnishing of the modified return of income, and the other being that covered by clause (b), where the assessment was pending on the date of furnishing of the modified return of income. In cases covered by clause (a), the assessing officer has to pass an order modifying the total income determined in the completed assessment in accordance with the order of reorganization and taking into account the modified return. In cases covered by clause (b), dealing with pending asses....