Revised Return can be Filed Belatedly by the Companies Incorporated under Schemes of Arrangement and Amalgamation: Supreme Court [Read Judgment]

In a significant ruling, the Supreme Court of India held that the companies incorporated under Schemes of Arrangement and Amalgamation can file revised return after the due date because delay occurred on account of the time taken to obtain the sanction of the Schemes of Arrangement and Amalgamation from the NCLT.

The Appellants M/S Dalmia Power Limited and M/S Dalmia Cement (Bharat) Limited are public limited companies, incorporated under the Companies Act, 1956. In the present case, Appellant /Transferee Companies filed their original Returns of Income. Thereafter, they entered into Schemes of arrangement and Amalgamation with Transfer or Companies in 2017. The Schemes were finally sanctioned and approved by the NCLT, Chennai. 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 Transferee Companies/Amalgamated Companies. The Schemes incorporated provisions for filing the revised Returns the prescribed time limit since the Schemes would come into force retrospectively from the Appointed Date. Accordingly, the Appellants filed their Revised Returns. The re­computation would have a bearing on the total income of the Appellants with respect to the A.Y. 2016­2018.

The Department submitted by virtue of Section 139(5) and 119(2)(b) of the Income Tax Act that the Appellant ought to have made an application for condonation of delay, and sought permission from the CBDT, before filing the revised Returns beyond the statutory period. The Appellants having belatedly filed their revised Returns beyond the due date for A.Y. 2016­2017, the assessment could only be done on the basis of the original Returns filed by the Appellants. Section 139(5) of the Income Tax Act, as it stood at the relevant time, makes it clear that where an assessee furnishes a return under sub­section (1) or sub­section (4) of Section 139, and later discovers an omission or mistake 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.

The appellant submitted that since the revised Returns were not filed on account of omission or wrong statement or omission contained therein. The delay occurred on account of the time taken to obtain the sanction of the Schemes of Arrangement and Amalgamation from the NCLT.

The two-judge bench comprising of Justice Uday Umesh Lalit and Justice Indu Malhotra held that impossibility for the assessee companies to have filed the revised Returns of Income before the due date since the NCLT take time for passing the last orders for granting approval and sanction of the Schemes. The Department submitted that the Appellants ought to have made a representation to the Board under Section 119(2)(b) of the Income Tax Act for condonation of delay while filing the revised Returns. But which is applicable in cases of genuine hardship to admit an application, claim any exemption, deduction, refund or any other relief under this Act after the expiry the stipulated period under the Income Tax Act. In the present case, the predecessor companies/transferor companies have been succeeded by the Appellants/transferee companies who have taken over their business along with all assets, liabilities, profits and losses etc. In view of the provisions of Section 170(1) of the Income Tax Act, the Department is required to assess the income of the Appellants after taking into account the revised Returns filed after the amalgamation of the companies.