2023 (11) TMI 757 - HC - Income Tax

Seeking permission to file Modified return u/s 170A - Post amalgamation scheme sanctioned/approved by NCLT - Due date of filing of ITR has already expired - Apprehension of the revenue that, it could not process the return as it would be time barred - HELD THAT - Having regard to the position taken by the respondents/revenue and given the fact that the modified return, as noticed above, has already been filed by the petitioner, we are inclined to dispose of the writ petition with the following directions (i) The AO will have liberty to carry out scrutiny assessment; (ii) The time taken between the date when the proceedings were stayed and up until today will stand excluded; (iii) In terms of the first proviso appended to Explanation 1 of Section 153 of the Income Tax Act, 1961 in short, Act , the AO will have available to him 60 days for completion of assessment proceedings, which will commence from the date of receipt of a copy of the order passed today, and (iv) The assessment proceedings will be carried out having regard to the modified return filed by the petitioner.

Summary

Issues involved:
The interpretation of Section 170A of the Income Tax Act, 1961 in the context of a business reorganization and the obligation to file a modified return post-amalgamation.

First Issue:
The petitioner filed an original return before the amalgamation scheme was sanctioned, leading to the question of whether a modified return is required post-amalgamation under Section 170A of the Act.

The petitioner's counsel argued that Section 170A necessitates the filing of a modified return after the amalgamation scheme was approved, as 15 companies were amalgamated with the petitioner.

The counsel highlighted the time limit for completing the assessment under Section 153(1) of the Act and the CBDT order granting time to file the modified return until 31.03.2023.

The Court opined that the assessing officer cannot proceed with the assessment based on the pre-merger return and directed a stay on assessment proceedings until 31.03.2023 to allow time for filing the modified return as required by Section 170A.

Second Issue:
The subsequent filing of a modified return by the petitioner raised the question of whether the assessing officer can now proceed with the scrutiny assessment.

The petitioner's counsel contended that the modified return is now subject to assessment by the assessing officer.

The respondents/revenue supported this position, as reflected in paragraph 19 of the counter-affidavit, which suggested remitting the case for scrutiny assessment to the assessing officer.

The Court, considering the modified return already filed, directed the assessing officer to carry out the scrutiny assessment, excluding the period of stay, and granted 60 days for completion of assessment proceedings as per the first proviso of Section 153 of the Act.

The assessment proceedings were to be conducted based on the modified return filed by the petitioner, with parties instructed to act based on the digitally signed copy of the order.