M/S DALMIA POWER LIMITED & ANR. versus THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1, TRICHY

Citation: [2019] 18 S.C.R. 1236 · Decided: 18-12-2019 · Supreme Court of India · Bench: UDAY UMESH LALIT, INDU MALHOTRA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 3 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 18 S.C.R.
M/S DALMIA POWER LIMITED & ANR.
v.
THE ASSISTANT COMMISSIONER
OF INCOME TAX CIRCLE 1, TRICHY
(Civil Appeal Nos. 9496-99 of  2019)
DECEMBER 18, 2019
[UDAY UMESH LALIT AND INDU MALHOTRA, JJ.]
Income Tax Act, 1961 – ss.139 (5), 143(2) – Companies Act,
2013 – ss.230-252 – Appellant Nos. 1 & 2 filed its original return
of Income u/s. 139(1) of the Act, 1961 for A.Y. 2016-17 on
30.09.2016 and 30.11.2016 respectively – The appellants entered
into schemes of arrangement and amalgamation with 9 companies
– The appointed date as per the schemes was 01.01.2015 – The
Schemes were sanctioned and approved by NCLT – Consequent to
which, the appellants/transferee companies manually filed revised
Returns of Income on 27.11.2018 with the Department – The
Department contended that the appellant did not file application
for condonation of delay and sought permission from CBDT, before
filing the revised Returns beyond the statutory period of 31.03.2018
– The notice issued by the Department u/s. 143(2) of the Act, 1961
to give effect to the approval of the scheme was also withdrawn –
Appellants filed writ petitions – The Single Judge of the High Court
enabled the appellants to file their revised Returns of Income beyond
the prescribed period under the Income Tax Act – However, the
Division Bench of the High Court reversed the Judgment of the
Single Judge – On appeal, held: The s.139 (5) of the Income Tax
Act is not applicable to the facts and circumstances of the case
since the revised returns were not filed on account of an omission
or wrong statement – The delay occurred on account of the time
taken to obtain sanction of the schemes of arrangement and
amalgamation from the NCLT – It was impossible for the assessee
companies to have filed the revised returns of Income for the A.Y.
2016-2017 before the due date of 31.03.2018, since the NCLT had
passed the last orders granting approval and sanction of the schemes
only on 22.04.2018 and 01.05.2018 – The Single Judge of the High
Court had rightly allowed the writ petitions – Accordingly, the
Judgment of the Division Bench of the High Court set aside.
[2019] 18 S.C.R. 1236
1236
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Allowing the appeals, the Court
HELD: 1. In view of this Court, this s.139(5) of the Income
Tax Act, 1961 is not applicable to the facts and circumstances of
the present case since the revised Returns were not filed on
account of an omission or wrong statement or omission contained
therein. The delay occurred on account of the time taken to obtain
sanction of the Schemes of Arrangement and Amalgamation from
the NCLT. [Para 7][1253-F]
2. In the facts of the present case, it was an impossibility
for the assessee companies to have filed the revised Returns of
Income for the A.Y. 2016-2017 before the due date of 31.03.2018,
since the NCLT had passed the last orders granting approval
and sanction of the Schemes only on 22.04.2018 and 01.05.2018.
[Para 8][1253-G]
3. The counsel appearing for 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. A perusal
of Section 119(2)(b) shows that it 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 of the
stipulated period under the Income Tax Act. [Para 9][1254-A-B]
4. On a plain reading of Section 119(2)(b), this Court finds
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. The purpose of
assessment proceedings is to assess the tax liability of an assessee
correctly in accordance with law. [Para 9][1254-E-F]
5. 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
M/S DALMIA POWER LTD. v. THE ASSISTANT COMMR. OF
INCOME TAX CIRCLE 1, TRICHY
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SUPREME COURT REPORTS
[2019] 18 S.C.R.
Department is required to assess the income of the Appellants
after taking into

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