Deep Industries Limited v. Dy. Commissioner Of Income Tax, Circle 1(1)(1), Ahmedabad (Jao

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 11916 of 2021 ========================================================== DEEP INDUSTRIES LIMITED VersusDY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1)(1), AHMEDABAD(JAO) ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1MRS MAUNA M BHATT(174) for the Respondent(s) No. 1SERVED BY RPAD (N)(6) for the Respondent(s) No. 2========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANIandHONOURABLE MR. JUSTICE RAJENDRA M. SAREEN Date : 29/09/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1.The petitioner is before this Court seeking following reliefs: “7… (a) Direct the Respondents to accept and process therevised return of income of the Petitioner for AY 2018-19 as filed on 28.07.2020 at Annexure- ‘C3’ to thisPetition; (b) Pending the admission, hearing and final disposal ofthis petition, to direct the Respondents to accept andprocess the revised return of income of the Petitioner for AY 2018-19 as filed on 28.07.2020 at Annexure-‘C3’ to this Petition; (c) any other and further relief deemed just and properby granted in the interest of justice.” 2.Brief facts leading to the presentpetition are as follow: 2.1 The Deep Industries Limited was havingbusiness of Oil and Gas exploration andproduction and oil and Gas Services. Itdecided to demerge its Oil and Gas servicesbusiness therefore a scheme of arrangementwas formulated and a company applicationwas moved before the National Company LawTribunal (‘the NCLT’ hereinafter). Thescheme of arrangement was sanctioned on17.03.2020 with appointed date 01.04.2017.Certified copy of the scheme was receivedon 26.05.2020 and the same was filed with the Registrar of the Companies on20.06.2020. 2.2The petitioner-the then DeepIndustries Limited had filed originalreturn of income for Assessment Year 2018-19 on 30.03.2019 where the Scheme ofArrangement was not sanctioned by the NCLTat Rs.97,78,24,690/-. The return of incomewas filed successfully on line and on thesanction of the scheme being effective from01.04.2017 the erstwhile Deep IndustriesLimited’s assets, liabilities, incomes,etc. were deemed to be that of Deep CH4Limited later named as Deep IndustriesLimited-the petitioner herein. 2.3The petitioner sought to file therevised return for Assessment Year 2018-19; however, the time for the same has lapsed. There was no mechanism to file it online. 2.4The petitioner raised grievance on income tax portal on 26.06.2020 via e-Nivaran facility. Therefore, it physicallyfiled revised return along with the letterdated 28.07.2020 explaining the cause ofrevision. 2.5It is lamented by the petitionerthat the respondent no.2 did not processthe revised return of income filed by thepetitioner and has passed the AssessmentOrder in case of Deep Energy Resources on04.05.2021, the erstwhile Deep IndustriesLimited, on the protective basis addingRs.102,08,97,103/-. C/SCA/11916/2021 ORDER DATED: 29/09/2021 2.6 This is a major grievance on the part of the petitioner. According to whom,by the time, NCLT passed the order, thetime limit to file the revised return underSection 139(5) of the Act had expired andit was not possible for the petitioner tofile the revised return online and thoughit had attempted to so do it, it was notpermitted and this approach on the part ofthe respondent is sought to be challenged. 2.7Affidavit-in-reply is filed by therespondent urging inter alia that this wasprotective assessment in case of theassessee, which is permissible under thelaw and there was no scope for revisedreturn otherwise than via electronicmanner. C/SCA/11916/2021 ORDER DATED: 29/09/2021 2.6 This is a major grievance on the part of the petitioner. According to whom,by the time, NCLT passed the order, thetime limit to file the revised return underSection 139(5) of the Act had expired andit was not possible for the petitioner tofile the revised return online and thoughit had attempted to so do it, it was notpermitted and this approach on the part ofthe respondent is sought to be challenged. 2.7Affidavit-in-reply is filed by therespondent urging inter alia that this wasprotective assessment in case of theassessee, which is permissible under thelaw and there was no scope for revisedreturn otherwise than via electronicmanner. C/SCA/11916/2021 ORDER DATED: 29/09/2021 3.The case of Deep Energy Resources wasselected for scrutiny through ComputerAssisted Scrutiny Selection (CASS) andnotice under Section 143(2) had been issuedto the Assessee on 22.09.2019. Afterfollowing the due procedure of law mandatedin the Act, all statutory requirements werefollowed prior to the issuance of thenotice calling upon the relevant details,the notice under Section 142(1) was issuedon 27.11.2020, replies to which had beenfurnished on 03.10.2019 and 15.12.2020. Theshow cause notice on 22.02.2021 had beenissued during the scrutiny assessmentproceedings and reply to which has alsobeen duly considered. 4.According to the respondent, during thecourse of the assessment proceedings, the Assessee Company-M/s.Deep Energy ResourceLimited informed with the evidence that theAssessee Company has undergone the demergerfollowing the order of the NCLT, Ahmedabadon 17.03.2020. It was effective fromretrospective date of 01.04.2017. Therespondent has also given the vital pointsof order of the NCLT, Ahmedabad in itsreply; however, it has also further statedthat the revised return since was filedmanually and belatedly, it was constrainedinvalid as there is no provision under theAct to accept the revised return beyondlimitation period. 5.We have heard the learned advocate,Mr.Bandish Soparkar and the learned seniorstanding counsel, Ms.Mauna Bhatt. 6.According to the learned advocate,Mr.Bandish Soparkar, the issue of revisedreturn pursuant to the demerger on accountof the order of the NCLT no longer is resintegra. He has sought to rely on the decision of DALMIA POWER LIMITED VS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, TRICHY,reported in (2020) 420 ITR 339 (SC).According to him, the ApexCourt had examined the provision of Section 139(5) in particular to hold that the provision is not applicable since therevised returns were not filed on accountof omission or wrong statement. The delayoccurred on account of the time taken to obtain the sanction of the Schemes ofArrangement and Amalgamation from the NCLT,if it is to be construed then the veryprovision will not be applicable. 6.1He, therefore, has urged that thereis no question of any delay in filing therevised return. He has further sought to rely on the decision ofPrincipalCommissioner of Income-Tax & Others Vs.Babubhai Ramanbhai Patel, reported in 201784taxman.com 32 (GUJ) to urge that once therevised return within the prescribed timeis permitted, the original return underSection 139 would not survive. 7.Learned senior standing counsel,Ms.Mauna Bhatt has fairly stated that therevenue has already taken a stand that itwas not feasible to accept the revisedreturn manually as the same isimpermissible and the one which has beenfiled was not within the ordinary timelimit set for the same. She has urged that there can be no dispute with regard to the ration laid down in the decision of theApex Court and this Court. 8.Having heard the learned advocates on rely on the decision ofPrincipalCommissioner of Income-Tax & Others Vs.Babubhai Ramanbhai Patel, reported in 201784taxman.com 32 (GUJ) to urge that once therevised return within the prescribed timeis permitted, the original return underSection 139 would not survive. 7.Learned senior standing counsel,Ms.Mauna Bhatt has fairly stated that therevenue has already taken a stand that itwas not feasible to accept the revisedreturn manually as the same isimpermissible and the one which has beenfiled was not within the ordinary timelimit set for the same. She has urged that there can be no dispute with regard to the ration laid down in the decision of theApex Court and this Court. 8.Having heard the learned advocates on both the sides and having considered the chronology of events, it is quite clear that the petitioner-the then Deep CH4 Limited had filed return of income for theAssessment Year 2018-19 on 25.09.2018 andthe scheme of arrangement of the de-mergerof the company was sanctioned by the NCLT,Ahmedabad on 01.04.2017 being the appointed date; however, the order had come on17.03.2020. The time of revised return which was to be filed electronically had already lapsed by then. The petitioner had raised the grievance with the Income Tax Portal via e-Nivaran facility on 26.06.2020 and once there was no response,he physically filed the revised return on28.07.2020. 8.1The petitioner’s revised return wasnot considered obviously because that isimpermissible as the same was not filedelectronically. However, this was in complete disregard to the fact that theorder of the NCLT had come on 17.03.2020and therefore, it was not possible for thepetitioner to so do it within time framedas set under Section 139(5) of the Act asthe appointed date as per the order of theNCLT is fixed on 01.04.2017, the petitionerwould be entitled to file the revisedreturn and in wake of the decision of thisCourt in case of Principal Commissioner ofIncome-Tax & Others Vs. Babubhai Ramanbhai Patelthe original return under Section139(1) will pay insignificance and wouldnot survive. The respondent authoritytherefore not considered the revised returnand needs indulgence at the ends of theCourt. 9.Resultantly, the assessment which hasbeen finalized shall need to be quashedpermitting the respondent to processconsidering the revised return which hasbeen filed by the petitioner. If it is notfiled in an electronic manner as has beenreflected in the affidavit-in-reply, heshould be permitted to do that by aspecific order and granting him reasonabletime of minimum one week to so do it.Otherwise, his physical copy which he hasdispatchedshallbetakeninto consideration. 10.As a parting note the Court needsto make a mention that the matter hastravelled to this Court only because therevised return was not permitted beyond theprescribed time limit as set under Section139 (5) of the Act. Thus, the Apex Court incase of DALMIA POWER LIMITED (supra)hascategorically held and observed thatSection 119 of the IT Act in such mattersalso would not be applicable and therefore,when the respondents are desirous ofoperating in the regimes of electronic modeand faceless assessment, it shall need toimprovise the software and allow therevised return more particularly, when thelaw has been made quite clear by virtue ofthe direction of the Apex Court. Let the care be taken in improvising the software wherever necessary since its limitations have tendency to swell the Courtlitigation. The petitioner could have beensaved from this ordeal, had such a caretaken to permit the revised return in anelectronic mode once the direction of theNCLT was communicated along with thedecision of the Apex Court. 11. With the above directions, petitionstands allowed and disposed. Sd/- (SONIA GOKANI, J) M.M.MIRZA Sd/-(RAJENDRA M. SAREEN,J)