Income Tax Case

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT RESERVED ON : 23.04.2019 DELIVERED ON : 30.04.2019 CORAM: THE HONOURABLE MR.JUSTICE ABDUL QUDDHOSEW.P. Nos.25314, 25315, 25317 & 25318 of 2018 M/s.Dalmia Power Limited, Represented by its Authorised Signatory Shri.R.Gururajan,Dalmiapuram, Tiruchirapalli – 621 651. : Petitioner in W.P. Nos.25314 & 25315/18 M/s.Dalmia Cement (Bharat) Limited, Represented by its Deputy Executive Director (Finance),and authorised signatory Shri R.Gururajan,Dalmiapuram, Tiruchirapalli – 621 651. : Petitioner in W.P. Nos.25317 & 25318/18 Vs. Assistant Commissioner of Income-Tax Circle 1,Trichy, No.44, Williams Road, Cantonment,Tiruchirapalli – 620 001.: Respondent in all Writ Petitions PRAYER in W.P. No.25314 of 2018:Writ Petition filed underArticle 226 of the Constitution of India to issue Writ ofCertiorarified Mandamus, calling for the records on the file of therespondent in PAN: /Circle 1/TRY/2016-17 dated 05.12.2018,recalling the notice issued by the respondent pursuant to therevised return filed by the petitioner and quash the same anddirect the respondent to complete the assessment for the assessmentyear 2016-17 taking into account the revised return of income filedby the petitioner on 27.11.2018 and also the orders of the NationalCompany Law Tribunal approving the scheme of arrangement andamalgamation. PRAYER in W.P. No.25315 of 2018:Writ Petition filed underArticle 226 of the Constitution of India to issue Writ ofCertiorarified Mandamus, calling for the records on the file of therespondent in PAN: /Circle 1/TRY/2016-17 dated 17.12.2018for the Assessment Year 2015-16, rejecting the revised return ofincome filed by the petitioner, quash the same and direct therespondent to recompute the income of the petitioners, in respectof AY 2015-16 based on revised return of income filed by thepetitioner 27.11.2018 pursuant to the orders of the NationalCompany Law Tribunal, approving the schemes of arrangement andhttps://hcservices.ecourts.gov.in/hcservices/amalgamation. PRAYER in W.P. No.25317 of 2018:Writ Petition filed underArticle 226 of the Constitution of India to issue Writ ofCertiorarified Mandamus, calling for the records on the file of therespondent in PAN: /Circle 1/TRY/2016-17 dated 05.12.2018,recalling the notice issued by the respondent pursuant to therevised return filed by the petitioner and quash the same anddirect the respondent to complete the assessment for the assessmentyear 2016-17 taking into account the revised return of income filedby the petitioner on 27.11.2018 and also the orders of the NationalCompany Law Tribunal approving the scheme of arrangement andamalgamation. PRAYER in W.P. No.25318 of 2018:Writ Petition filed underArticle 226 of the Constitution of India to issue Writ ofCertiorarified Mandamus, calling for the records of the firstrespondent in order number PAN: /Circle 1/TRY/2016-17dated 17.12.2018 for the Assessment Year 2015-16, rejecting therevised return of income filed by the petitioner, quash the sameand direct the respondent to recompute the income of thepetitioners in respect of AY 2015-16 based on revised return ofincome filed by the petitioner on 27.11.2018 pursuant to the ordersof the National Company Law Tribunal, approving the schemes ofarrangement and amalgamation. For Petitioner : Mr.N.Venkatraman, Senior Counsel for Mr.N.V.Balaji For Respondent : Mr.G.Rajagopalan, Additional Solicitor General of India assisted by MR.N.Dilip Kumar [In all the Writ Petitions] COMMON ORDER ********************* The points for consideration in these Writ Petitions are asfollows: For Petitioner : Mr.N.Venkatraman, Senior Counsel for Mr.N.V.Balaji For Respondent : Mr.G.Rajagopalan, Additional Solicitor General of India assisted by MR.N.Dilip Kumar [In all the Writ Petitions] COMMON ORDER ********************* The points for consideration in these Writ Petitions are asfollows: a) Whether the scheme of amalgamation approved by theNational Company Law Tribunal under Section 391 of the CompaniesAct permitting the respective petitioners to file a revised returnof income, even beyond the prescribed period is binding on theincome tax authorities if the revised return of income has beenfiled beyond the prescribed period as stipulated under Section 139(5) of the Income Tax Act, 1961. b) Whether the circular issued under Section 119(2)(b) ofthe Income Tax Act namely Circular No.9 of 2015 overrides thescheme of amalgamation approved by the National Company LawTribunal under Section 391 of the Companies Act, permitting therespective petitioners to file the revised return of income afterthe due dates as prescribed under Section 139(5) of the Income TaxAct, 1961. https://hcservices.ecourts.gov.in/hcservices/c) Whether Rule 12(3) of the Income Tax Rules, whichrequires filing of revised return of income electronically is mandatory and whether there can be exceptions to the said Rule. 2.These batch of Writ Petitions have been filed challengingthe impugned orders of the respondent, recalling the notice underSection 143(2) of the Income Tax Act, for the following reasons: a) The revised return of income was filed by the respectivepetitioners after the due date for filing of revised return ofincome without obtaining condonation of delay in filing the revisedreturn from the appropriate authority as per Section 119(2)(b) readwith CBDT Circular No.9 of 2015 b) The revised return of income was filed in manual form. 3.Brief facts leading to the filing of these Writ Petitionsare as follows: 3.1.Dalmia Cement (Bharath) Limited has filed W.P. No.25318 of 2018 for the assessment year 2015-2016 and W.P. No.25317 of 2018 for the assessment year 2016-2017. “Dalmia Cement (Bharat) Limited, has entered into schemes ofarrangement and amalgamation, with effect from the Appointed Date,i.e., 01.01.2015, which has been duly approved by National CompanyLaw Tribunal . A brief factual matrix for A.Y. 2015-16 & A.Y.2016-17 is tabulated as under: 3.2.Dalmia Power Limited has filed W.P. No.25314 of 2018for the assessment year 2016-17 and W.P. No.25315 of 2018 forthe assessment year 2015-16.“Dalmia Power Limited has also entered into scheme ofhttps://hcservices.ecourts.gov.in/hcservices/amalgamation, with effect from the Appointed Date, i.e., 01-01-2015, which has been duly approved by NCLT, Chennai. A brief 4.According to the respective petitioners, the above factswere duly brought to the knowledge of the first respondent videletter dated 25.11.2018, filed on 27.11.2018 for both theassessment years. According to the respective petitioners,although, the scheme of amalgamation was sanctioned for DalmiaPower Limited in November 2017, but only to ensure filing of returnof income, the management took the conscious call to file therevised return of the amalgamated company that is Dalmia PowerLimited along with Dalmia Cements (Bharat) Limited, at the sametime so that proper effect is given to income and expenditure,credit of prepaid taxes. According to the respective petitioners,as per paragraph 64 (c) of the scheme of arrangement andamalgamation duly approved by National Company Law Tribunal, therespective petitioners were entitled to revise its return of incomeon the basis of the National Company Law Tribunal approved schemeof arrangement and amalgamation, even if the prescribed time limitfor revising such returns have lapsed. 5.According to the respective petitioners, the respondentought to have acted upon the revised returns of the respectivepetitioners, particularly when the scheme of arrangement andamalgamation approved by the National Company Law Tribunal provideshttps://hcservices.ecourts.gov.in/hcservices/for revision of the returns by the petitioners, even if it is filedbeyond the prescribed period. It is their case that the Central Board of Direct Taxes under Section 119(2)(b) of the Income Tax Actis exercising only an administrative authority and therefore, theBoard cannot sit on judgment over the statutory exercise of powerby the National Company Law Tribunal. 6.Counter affidavits have also been filed by the respondentin all these batch of Writ Petitions, wherein they have stated thatthe revised return of income filed by the respective petitionersbeyond the prescribed period as stipulated under Section 139(5) ofthe Income Tax Act, 1961, is invalid. Further, they havereiterated that the revised return of income filed by therespective petitioners manually is contrary to Rule 12(3) of theIncome Tax Rules, 1962, which makes it mandatory to file therevised return of income only electronically. 7.It is their case that without condonation of delay, as perthe provisions of Section 119(2)(b) read with CBDT Circular No.9 of2015, (F.No.312/22/2015-OT) dated 09.06.2015, the revised return ofincome filed by the respective petitioners for the respectiveassessment years is invalid. 8.Heard Mr.N.Venkatraman, learned Senior Counsel for thepetitioners and Mr.G.Rajagopalan, learned Additional SolicitorGeneral for the respondent. Submissions of the learned Counsels: 9.The learned Senior Counsel for the petitioners drew theattention of this Court to paragraph No.64 (c) of the scheme ofamalgamation dated 16.10.2017 approved by the National Company LawTribunal, Chennai and submitted that the respective petitionerswere entitled to file revised return of income even if theprescribed time limit for filing the revised income has lapsed.According to him, notice was issued to the respondent by theNational Company Law Tribunal before passing of the amalgamationorder under Section 391 of the Companies Act. But, despite serviceof notice, they failed to raise any objections for the passing ofthe amalgamation order. 10.The learned Senior Counsel for the petitioners submittedthat an order of amalgamation or merger by a Court has a validstatutory force. According to him, the amalgamation order passed bythe National Company Law Tribunal gives statutory force to therespective petitioners to file revised return of income andtherefore, a revised return of income beyond the prescribed periodas stipulated under Section 139(5) of the Income Tax Act, 1961 readwith Section 119(2)(b) of the Income Tax Act is not attracted forthe instant case. According to him, referring to Section 119(2)(b)of the Income Tax Act, 1961, it deals with cases of genuinehardship whereas the case on hand does not involve such asituation. But, a revised return of income was filed by thehttps://hcservices.ecourts.gov.in/hcservices/respective petitioners for the respective assessment years onlypursuant to the scheme of amalgamation approved by the National Company Law Tribunal which gives statutory force to the respectivepetitioners to file the revised return of income beyond theprescribed period as stipulated under Section 139(5) of the IncomeTax Act, 1961. Company Law Tribunal which gives statutory force to the respectivepetitioners to file the revised return of income beyond theprescribed period as stipulated under Section 139(5) of the IncomeTax Act, 1961. 11.According to the learned Senior Counsel, CBDT circularNo.9/2015 issued under Section 119(2)(b) of the Income Tax Act isnot applicable for the instant cases as in the instant cases,revision of returns have not been filed on the ground of genuinehardship but has been filed only pursuant to the amalgamation orderpassed by the National Company Law Tribunal. According to him, theCentral Board of Direct Taxes exercising powers to issue circularsunder Section 119(2)(b) of the Income Tax Act cannot sit on thejudgment of the National Company Law Tribunal which has passed theamalgamation order permitting the respective petitioners to filerevised return of income even if it is beyond the prescribed timelimit. 12.The learned Senior Counsel for the petitioner alsosubmitted that Section 139(3) of the Income Tax Act is also notapplicable to the case on hand. According to him, as per theprovisions of Section 139(3) of the Income Tax Act, business lossor capital loss shall not be carried forward unless the return isfiled within the time limit prescribed under Section 139(1) of theAct. However, according to him, in the present case, the originalreturn of income for assessment year 2015-2016 and for assessmentyear 2016-2017 has been filed well within the time limit asprescribed under Section 139(1) of the Act. 13.According to the learned Senior Counsel for thepetitioners, the provisions of Rule 12(3) of the Income Tax Rules,1962, which requires filing of return electronically could not becomplied with since the Income Tax website does not permit filingof the revised return electronically beyond the due date prescribedunder Section 139(5) of the Income Tax Act. He also submitted thatthe petitioner had filed the grievance petition before theCentralised Processing Center (CPC), Bengaluru, regarding theinability to file the return electronically. In response, theCentralised Processing Center, Bengaluru has also categoricallycommunicated to the petitioner that since the e-filed originalreturn has already been transferred to the jurisdictional assessingofficer and hence, for processing the revised return filedmanually, the jurisdiction lies with the jurisdictional assessingofficer and Centralised Processing Center has no role to play forprocessing revised return filed manually. 14.In support of his submissions, the learned Senior Counselfor the petitioner drew the attention of this Court to thefollowing authorities:https://hcservices.ecourts.gov.in/hcservices/a) Marshall Sons & Co. (India) Ltd. Vs. ITO reported in(1997) 223 ITR 809 (SC): Relying upon the said judgment, the learned Senior Counselsubmitted that once the scheme of amalgamation is sanctioned byCourt, it comes into effect retrospectively from the appointeddate. Appointed date is the date on which assets and liabilities ofthe transferor company vest in and has been transferred to thetransferee company. In particular, he referred to paragraph Nos.7and 8 of the said judgment. b) Pentamedia Graphics Ltd. Vs. ITO reported in (2010) 236CTR 204 (Mad): The learned Senior Counsel would submit that in an identicalmatter, following the judgment of the Hon'ble Supreme Court in thecase of Marshall Sons & Co. (India) Ltd., referred to supra, thelearned Single Judge of this Court has held that the revenue willhave to act as per the scheme of amalgamation approved by the HighCourt and return filed beyond the due date of filing revised returnof income cannot be ignored by applying Section 139(5) of theIncome Tax Act, 1961. c) JK Bombay (P) Ltd. Vs. New Kaiser-I Hind Spinning &Weaving Co. reported in AIR 1970 10414 (SC): b) Pentamedia Graphics Ltd. Vs. ITO reported in (2010) 236CTR 204 (Mad): The learned Senior Counsel would submit that in an identicalmatter, following the judgment of the Hon'ble Supreme Court in thecase of Marshall Sons & Co. (India) Ltd., referred to supra, thelearned Single Judge of this Court has held that the revenue willhave to act as per the scheme of amalgamation approved by the HighCourt and return filed beyond the due date of filing revised returnof income cannot be ignored by applying Section 139(5) of theIncome Tax Act, 1961. c) JK Bombay (P) Ltd. Vs. New Kaiser-I Hind Spinning &Weaving Co. reported in AIR 1970 10414 (SC): Relying upon the said judgment, the learned Senior Counselwould submit that once the scheme of arrangement and amalgamationhas been approved by the Court, the same does not operate as a merearrangement, but it becomes a statutory force. d) In Re: Telesound India Ltd., [Company Petition No.54 of1980 dated 05.12.1980, Delhi High Court: Relying upon the said judgment, the learned Senior Counselwould submit that a scheme of amalgamation approved by the HighCourt by virtue of the provisions of Section 391 to 394 of theCompanies Act has a statutory genesis and character and it iseffective and binding by virtue of statutory power. e) Hindustan Aeronautics Ltd., Vs. Commissioner of IncomeTax reported in (2000) 243 ITR 808 (SC): The learned Senior Counsel would submit that when theSupreme Court or the High Court has declared the law on thequestion arising for consideration, it will not be open to Court todirect that a circular should be given effect to and not the viewexpressed in a decision of the Supreme Court or the High Court.According to him, the amalgamation order passed by the NationalCompany Law Tribunal overrides the CBDT circular, as per theaforesaid decisions. 15.Per contra, Mr.G.Rajagopalan, learned AdditionalSolicitor General, would submit that the amalgamation order hasbeen passed under the Companies Act, whereas the impugned order waspassed rejecting the revised return of Income under the Income TaxAct on the ground that approval for condonation of delay for filinghttps://hcservices.ecourts.gov.in/hcservices/revised return of income beyond the prescribed period is requiredunder Section 119(2)(b) of the Income Tax Act read with CBDTCircular No.9 of 2015. According to him, the revised return of income filed by the respective petitioners were also returned fornot filing the same electronically in accordance with Rule 12(3) ofthe Income Tax Rules. According to the learned Additional SolicitorGeneral, revenue statutes like that of the Income Tax Act will haveto be construed strictly. He drew the attention of this Court toSection 139(5) of the Income Tax Act, 1961 and submitted that therevised return of income will have to be filed before the expiry ofone year from the end of the relevant assessment year or before thecompletion of the assessment, whichever is earlier. According tohim, in the instant case, admittedly, the revised return of incomehas been filed beyond the prescribed period as stipulated underSection 139(5) of the Income Tax Act, 1961 and hence, therespondent under the impugned orders have held the revised returnof income to be invalid. 16.The learned Additional Solicitor General also drew theattention of this Court to Section 119(2)(b) of the Income Tax Actand submitted that the income tax authority can admit anapplication or claim for any exemption, deduction, refund or anyother relief under the Income Tax Act after the expiry of theperiod only after getting approval from the Central Board of DirectTaxes. He also drew the attention of this Court to the CircularNo.9 of 2015, issued by the Central Board of Direct Taxes inexercising of its statutory powers under Section 119(2)(b) of theIncome Tax Act. 16.The learned Additional Solicitor General also drew theattention of this Court to Section 119(2)(b) of the Income Tax Actand submitted that the income tax authority can admit anapplication or claim for any exemption, deduction, refund or anyother relief under the Income Tax Act after the expiry of theperiod only after getting approval from the Central Board of DirectTaxes. He also drew the attention of this Court to the CircularNo.9 of 2015, issued by the Central Board of Direct Taxes inexercising of its statutory powers under Section 119(2)(b) of theIncome Tax Act. 17.According to him, the said circular governs the procedureto deal with applications for condonation of delay in filingreturns under Section 119(2)(b) of the Income Tax Act, claiming tocarry forward losses and set-off. According to him, since thepetitioner has not followed the mandatory procedure as per the CBDTcircular No.9 of 2015, by obtaining approval from the Board forfiling the revised return of income beyond the prescribed period,the respondent under the impugned orders has rightly held therevised return of income filed by the respective petitioners asinvalid. 18.The learned Additional Solicitor General then drew theattention of this Court to the following authorities in support ofhis submissions: a) Commissioner of Customs Vs. Indian Oil CorporationLimited reported in (2004) 267 ITR 272 (SC): Referring to the said judgment, the learned AdditionalSolicitor General submitted that the Hon'ble Supreme Court afterconsidering the judgment of the Hon'ble Supreme Court in the caseof Collector of Central Excise Vs. Dhiren Chemical Industriesreported in (2002) 254 ITR 554, Collector of Central Excise Vs.Dhiren Chemical Industries reported in (2002) 10 SCC 64 and SimplexCasting Ltd. Vs. Commissioner of Customs reported in (2003) 5 SCC528, has held that the circulars issued by the CBDT under thehttps://hcservices.ecourts.gov.in/hcservices/Income Tax Act, 1961, are held to be binding upon the revenue. b) Para Marketing Co-operative Society Vs. Union of Indiareported in (2008) 167 Taxman 238 (Kerala): Referring to the aforesaid decision of the Kerala HighCourt, the learned Additional Solicitor General would submit thatonly after the delay in filing the revised return of income isobtained from the Board under Section 119(2)(b) of the Income TaxAct, the return filed belatedly becomes a valid return and can bevalidly processed under Section 139(1) or 139(4) of the Income TaxAct. c) Commissioner of Income Tax-I, Chandigarh Vs. HarjinderKaur reported in (2009) 180 Taxman 23 (Punjab and Haryana): Referring to the aforesaid decision, the learned AdditionalSolicitor General would submit that the petitioners revised returnof income filed manually is an invalid return and no assessment canbe made based on an invalid return. According to him, only becauseof the invalid return, the respondent recalled the notice underSection 143(2) of the Income Tax Act, in respect of the revisedreturns of Income filed by the respective petitioners. d) Casby CFS (P) Ltd., In Re., reported in (2015) 56Taxmann.com 263: Referring to the aforesaid decision, the learned AdditionalSolicitor General would submit that it is well settled that thereis no estoppel against statute and consequently it is always opento the income tax department to point out that the scheme ofamalgamation is contrary to the provisions of the Income Tax Act.Hence, according to him, any income tax issue arising out of thescheme of amalgamation shall be subject to the final decision ofthe income tax authority and the approval of the scheme by theNational Company Law Tribunal will not deter the income taxauthority from scrutinising the income tax returns filed by therespective petitioners and the decision of the income tax authorityis binding on the petitioners. Referring to the aforesaid decision, the learned AdditionalSolicitor General would submit that it is well settled that thereis no estoppel against statute and consequently it is always opento the income tax department to point out that the scheme ofamalgamation is contrary to the provisions of the Income Tax Act.Hence, according to him, any income tax issue arising out of thescheme of amalgamation shall be subject to the final decision ofthe income tax authority and the approval of the scheme by theNational Company Law Tribunal will not deter the income taxauthority from scrutinising the income tax returns filed by therespective petitioners and the decision of the income tax authorityis binding on the petitioners. 19.According to the learned Additional Solicitor General,insofar as the learned Senior Counsel for the petitioners' relianceon the decision of the Hon'ble Supreme Court in the case ofMarshall Sons & Co. (India) Ltd., Vs. ITO reported in (1997) 223ITR 809 (SC) and the decision of the High Court of Madras in thecase of Pentamedia Graphics Ltd., Vs. ITO reported in (2010) 236CTR 204 (Mad), is concerned, he would submit that the saiddecisions are not applicable for the facts of the instant casesince the respective petitioners have filed invalid revised returnof income seeking to carry forward current year losses which is notin accordance with the provisions of Section 139(5) and 139(3) ofthe Income Tax Act and also not in accordance with Rule 12(3) ofthe Income Tax Rules, 1962 and the respective petitioners have alsonot complied with the procedural requirements in accordance withSection 119(2)(b) read with CBDT Circular No.9 of 2015 datedhttps://hcservices.ecourts.gov.in/hcservices/09.06.2015, which according to the learned Additional SolicitorGeneral is mandatory. In particular, he referred to paragraph 21of the judgment in the case of Pentamedia Graphics Ltd., Vs. ITO reported in (2010) 236 CTR 204 (Mad), wherein it has been observedthat the merits or otherwise on the returns filed, however is amatter of assessment for the authorities to consider and pass orderin accordance with law. 20.Concluding his submissions, the learned AdditionalSolicitor General would submit that since the revised returns ofincome have been filed beyond the prescribed period as stipulatedunder Section 139(5) of the Income Tax Act and condonation of delaywas not obtained from the Board in accordance with Section 119(2)(b) of the Income Tax Act read with CBDT Circular No.9 of 2015 andfurther the petitioner having not complied with Rule 12(3) of theIncome Tax Rules by filing the revised returns electronically, therespondent has rightly held the revised returns of income asinvalid. Discussion: 21.Paragraph 64 (c) of the scheme of arrangement andamalgamation approved by the National Company Law Tribunal permitsthe respective petitioners to file revised returns of income beyondthe prescribed period without incurring any liability on account ofinterest, penalty or any other sum. The relevant portion ofparagraph No.64(c) of the scheme approved by the National CompanyLaw Tribunal is extracted hereunder: “Amalgamated Company and Transferee Company shall be entitled to, amongst others, file/or Discussion: 21.Paragraph 64 (c) of the scheme of arrangement andamalgamation approved by the National Company Law Tribunal permitsthe respective petitioners to file revised returns of income beyondthe prescribed period without incurring any liability on account ofinterest, penalty or any other sum. The relevant portion ofparagraph No.64(c) of the scheme approved by the National CompanyLaw Tribunal is extracted hereunder: “Amalgamated Company and Transferee Company shall be entitled to, amongst others, file/or revise its income tax returns, TDS/TCS returns,wealth tax returns, service tax, excise duty, salestax, value added tax, entry tax, cess, professionaltax or any other statutory returns, if required,credit for advance tax paid, tax deducted atsource, claim for sum prescribed under section 43Bof the Income Tax Act on payment basis, claim fordeduction of provisions written back by AmalgamatedCompany and Transferee Company previouslydisallowed in the hands of Amalgamating Company andTransferor Company (relating to the TransferredUndertaking) respectively under the Income Tax Act,credit of tax under section 115JB read with section115JAA of the Income Tax Act, credit of foreigntaxes paid/withheld, if any, pertaining toAmalgamating Company and Transferor Company(relating to the Transferred Undertaking) as may berequired consequent to implementation of thisScheme and wherever necessary to give effect tothis Scheme,even if the prescribed time limits forfiling or revising such returns have lapsed withoutincurring any liability on account of interest,penalty or any other sum. Amalgamated Company andhttps://hcservices.ecourts.gov.in/hcservices/Transferee Company shall have the right to claimrefunds, tax credits, set-offs and/or adjustments relating to the income or transactions entered intoby them by virtue of this Scheme with effect fromAppointed Date. ….” 22.It is the case of the respondent that since the revisedreturn of income was filed beyond the prescribed period asstipulated under Section 139(5) of the Income Tax Act, 1961, therevised returns of income filed by the petitioners are invalid.Section 139(5) of the Income Tax Act, reads as follows: “Return of income: 139(5). If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrongstatement therein, he may furnish a revised returnat any time before [the expiry of one year from]the end of the relevant assessment year or beforethe completion of the assessment, whichever isearlier.]” 23.As seen from Section 139(5) of the Income Tax Act, 1961,they relate to cases where the assessee discovers any omission orany wrong statement in the original return of income. But in thecase on hand, the revised returns of income have been filedpursuant to the scheme of arrangement and amalgamation approved byNational Company Law under Section 391 of the Companies Act, 2013.Therefore, the submission made by the learned Additional SolicitorGeneral, that any revised return of income will have to be filedbefore the expiry of one year from the end of the relevantassessment year or before the completion of the assessment,whichever is earlier is not correct as Section 139(5) of the IncomeTax Act, 1961 is not applicable for the case on hand. 23.As seen from Section 139(5) of the Income Tax Act, 1961,they relate to cases where the assessee discovers any omission orany wrong statement in the original return of income. But in thecase on hand, the revised returns of income have been filedpursuant to the scheme of arrangement and amalgamation approved byNational Company Law under Section 391 of the Companies Act, 2013.Therefore, the submission made by the learned Additional SolicitorGeneral, that any revised return of income will have to be filedbefore the expiry of one year from the end of the relevantassessment year or before the completion of the assessment,whichever is earlier is not correct as Section 139(5) of the IncomeTax Act, 1961 is not applicable for the case on hand. 24.In the case on hand, as seen from paragraph 64 (c) of thescheme approved by the National Company Law Tribunal, thepetitioners are permitted to file revised returns of income beyondthe prescribed period. Further, the appointed date under the schemeis 01.01.2015, which means the scheme of amalgamation approved bythe National Company Law Tribunal is effective from 01.01.2015 forboth the companies. It is also seen that in the merger and de-merger proceedings before the National Company Law Tribunal,Chennai, notice was sent to the respondent by the respectivepetitioners in Form No.CAA 3, pursuant to Section 230 (5) of theCompanies Act, read with Rule 8 of the Company Court Rules whichwas also duly acknowledged by the respondent. Section 230(5) of theCompanies Act, 2013 reads as follows: “230(5). A notice under sub-section (3)along with all the documents in such form as may beprescribed shall also be sent to the CentralGovernment, the income-tax authorities, the Reservehttps://hcservices.ecourts.gov.in/hcservices/Bank of India, the Securities and Exchange Board,the Registrar, the respective stock exchanges, theOfficial Liquidator, the Competition Commission of India established under sub-section (1) of section7 of the Competition Act, 2002, if necessary, andsuch other sectoral regulators or authorities whichare likely to be affected by the compromise orarrangement and shall require that representations,if any, to be made by them shall be made within aperiod of thirty days from the date of receipt ofsuch notice, failing which, it shall be presumedthat they have no representations to make to theproposals.” 25.Eventhough notice was served on the respondent in themerger and de-merger proceedings before the National Company LawTribunal, Chennai, the respondents failed to object to the schemeof arrangement and amalgamation and subsequently the said scheme ofarrangement and amalgamation came to be approved by the NationalCompany Law Tribunal on 16.10.2017 and 26.10.2017 for Dalmia PowerLimited and on 20.04.2018 for Dalmia Cement (Bharat) Limited. 26.It is also an admitted fact that the scheme ofarrangement and amalgamation which enables the respectivepetitioners to file revised returns of income beyond the prescribedperiod has attained finality as no appeal has been filed as againstthe amalgamation order passed by the National Company Law Tribunal,Chennai. 27.In the case of Marshall Sons & Co. (India) Ltd. Vs. ITOreported in (1997) 223 ITR 809 (SC)., relied upon by the learnedSenior Counsel for the petitioners, the Hon'ble Supreme Court hasheld as follows: “a)Once the scheme is sanctioned by Court,it comes into effect retrospectively from theAppointed Date. The Appointed Date is the date onwhich assets and liabilities of the transferorcompany vest in and stand transferred to thetransferee company. b)Appointed Date is the date which isrelevant for the purpose of assessment of income ofthe transferor and transferee companies.c)Transferor Company ceases to exist fromAppointed Date and Transferee Company would beassessed to tax on the merged income from theAppointed Date.” 27.In the case of Marshall Sons & Co. (India) Ltd. Vs. ITOreported in (1997) 223 ITR 809 (SC)., relied upon by the learnedSenior Counsel for the petitioners, the Hon'ble Supreme Court hasheld as follows: “a)Once the scheme is sanctioned by Court,it comes into effect retrospectively from theAppointed Date. The Appointed Date is the date onwhich assets and liabilities of the transferorcompany vest in and stand transferred to thetransferee company. b)Appointed Date is the date which isrelevant for the purpose of assessment of income ofthe transferor and transferee companies.c)Transferor Company ceases to exist fromAppointed Date and Transferee Company would beassessed to tax on the merged income from theAppointed Date.” 28.In the case on hand, for both the companies, as per thescheme approved by the National Company Law Tribunal, the appointeddate is 01.01.2015. Therefore, necessarily for the assessment years2015-2016 and 2016-2017, revised return of income will have to befiled as the amalgamation order for Dalmia Power limited came to behttps://hcservices.ecourts.gov.in/hcservices/passed on 16.10.2017 and 26.10.2017 and for Dalmia Cement (Bharat)Limited, it came to be passed on 20.04.2018. Immediately after theapproval of the scheme of arrangement and amalgamation by the National Company Law Tribunal, the respective petitioners filed therevised return of income on 27.11.2018 for the assessment years2015-2016 and 2016-2017. 29.The original return of income was filed by Dalmia PowerLimited for the assessment year 2015-2016 on 17.09.2015 and for theassessment year 2016-2017, was filed on 30.09.2016. Similarly, theoriginal return of income was filed by Dalmia Cement (Bharat)Limited for the assessment year 2015-2016 on 30.11.2015 and for theassessment year 2016-2017 was filed on 30.11.2016. The appointeddate for both the petitioners under the scheme of arrangement andamalgamation approved by the National Company Law Tribunal is01.01.2015. Therefore, when the original return of income was filedby the respective petitioners for the assessment year 2015-2016, asper the scheme of arrangement and amalgamation approved by theNational Company Law Tribunal, the transferor company ceased toexist as the appointed date is 01.01.2015, which is the relevantdate for the purpose of assessment of income of the transferor andtransferee companies as held by the Hon'ble Supreme Court, in thecase of Marshall and sons & Co. (India) Ltd. Vs. ITO reported in(1997) 223 ITR 809 (SC). 30.The respective petitioners cannot be made remediless onthe basis of Section 139(5) of the Income Tax Act, 1961. The saidprovision is not applicable for the facts of the instant case asthe revised return of income has been filed pursuant to the schemeof arrangement and amalgamation approved by the National CompanyLaw Tribunal and not a case where there was discovery of anyomission or any wrong statement under the original return of incomefiled for the assessment years 2015-2016 and 2016-2017. The MadrasHigh Court following the judgment of the Hon'ble Supreme Court inthe case of Marshall and sons referred to supra, held in the caseof Pentamedia Graphics Ltd., Vs. ITO reported in (2010) 236 CTR 204(Mad), that the only course open to the revenue would be to act asper the scheme of amalgamation approved by the High Court effectivefrom the appointed date and the taxing authorities are bound totake note of the state of affairs of assessee as on the appointeddate and the return filed beyond the due date of filing revisedreturn of income cannot be ignored on the strength of Section 139(5) of the Income Tax Act. 31.The learned Single Judge of this Court in the aforesaiddecision in the case of Pentamedia Graphics referred to suprarejected the contention of the revenue that filing of revisedreturn of income pursuant to a scheme of arrangement approved bythe Court beyond the prescribed period stipulated under Section 139(5) of the Income Tax Act, 1961 is non-est in the eye of law. Inthe case on hand also, only based on the scheme of arrangement andamalgamation approved by the National Company Law Tribunal, therevised return of income was filed by the respective petitionershttps://hcservices.ecourts.gov.in/hcservices/beyond the normal prescribed period. As observed earlier, Section139(5) of the Income Tax Act, 1961, is not applicable for the factsof the instant case as there is no discovery of omission or any wrong statement under the original return of income filed by therespective petitioners, but the revised return of income wasnecessitated only due to the approval of the scheme of arrangementand amalgamation by the National Company Law Tribunal. 32.This Court is in agreement with the decision of thelearned Single Judge of this Court in the case of PentamediaGraphics referred to supra and therefore, is of the considered viewthat Section 139(5) of the Income Tax Act, 1961 is not applicablefor filing of revised return of income pursuant to a scheme ofarrangement and amalgamation approved by the Court and in theinstant case, it is the National Company Law Tribunal. 33.The approval of the scheme of arrangement andamalgamation under Section 391 of the Companies Act does notoperate as a mere arrangement but it becomes a statutory force.The Hon'ble Supreme Court in the case of J.K. Bombay (P) Ltd., Vs.New Kaiser-I Hind Spinning & Weaving Co. reported in AIR 1970 1041(SC), has held as follows: “The principle is that a scheme sanctionedby the court does not operate as a mere arrangementbetween the parties: it becomes binding on thecompany, the creditors and the shareholders and hasstatutory force, and therefore, the joint-debtorcould not invoke the principle of accord andsatisfaction. By virtue of the provisions of sec.391 of the Act, a scheme is statutorily bindingeven on creditors, and shareholders who dissentedfrom or opposed to its being sanctioned.” 34.The approved scheme of arrangement and amalgamationhaving a statutory force will necessarily override any circularissued by the Central Board of Direct Taxes prior to theamalgamation order. Further, the circular No.9 of 2015 dated09.06.2014 issued by the Central Board of Direct Taxes relied uponby the respondent is issued under Section 119(2)(b) of the IncomeTax Act, 1961, which reads as follows: “Instructions to subordinate authorities: 119(2)(b). the Board may, if it considers itdesirable or expedient so to do for avoiding genuinehardship in any case or class of cases, by generalor special order, authorise [any income-taxauthority, not being a Commissioner (Appeals)] toadmit an application or claim for any exemption,deduction, refund or any other relief under this Actafter the expiry of the period specified by or underthis Act for making such application or claim anddeal with the same on merits in accordance withlaw;”https://hcservices.ecourts.gov.in/hcservices/ 35.As seen from Section 119(2)(b) of the Income Tax Act, “Instructions to subordinate authorities: 119(2)(b). the Board may, if it considers itdesirable or expedient so to do for avoiding genuinehardship in any case or class of cases, by generalor special order, authorise [any income-taxauthority, not being a Commissioner (Appeals)] toadmit an application or claim for any exemption,deduction, refund or any other relief under this Actafter the expiry of the period specified by or underthis Act for making such application or claim anddeal with the same on merits in accordance withlaw;”https://hcservices.ecourts.gov.in/hcservices/ 35.As seen from Section 119(2)(b) of the Income Tax Act, 1961, the discretionary power under Section 119(2)(b) is to beexercised by the Board only in cases where it considers desirableor expedient so to do for avoiding genuine hardship in any case orclass of cases, by general or special order, authorise any incometax authority not being a Commissioner (Appeals) to admit anapplication or claim for any exemption, deduction, refund or anyother relief under the Income Tax Act after the expiry of theperiod specified by or under the Income Tax Act for making suchapplication or claim and deal with the same on merits in accordancewith law. 36.Section 119(2)(b) of the Income Tax Act has no relevanceto the facts of the instant case as the circular No.9 of 2015issued by the Central Board of Direct Taxes under Section 119(2)(b)of the Income Tax Act, 1961 has been issued only to avoid genuinehardship in any case or class of cases. But, in the instant case,the revised returns of income have been filed by the respectivepetitioners pursuant to the orders passed by the National CompanyLaw Tribunal approving the scheme of arrangement and amalgamationwhich permits the respective petitioners to file the revisedreturns of income beyond the prescribed period. 37.As observed earlier, following the decision of theHon'ble Supreme Court in the case of J.K. Bombay (P) Ltd., referredto supra, the approval of the scheme of arrangement andamalgamation by the National Company Law Tribunal gives statutoryforce to the said scheme. 38.The judgment relied upon by the learned AdditionalSolicitor General for the respondent in the case of Para MarketingCo-operative Society Vs. Union of India reported in (2008) 167Taxman 238 (Kerala), has no bearing for the facts of the instantcase since in that case, there was no amalgamation order approvingthe scheme of arrangement. Similarly, in the case of Commissionerof Income Tax-I, Chandigarh Vs. Harjinder Kaur reported in (2009)180 Taxman 23 (Punjab and Haryana) also relied upon by the learnedAdditional Solicitor General for the respondent there was noamalgamation order approving the scheme of arrangement and it was acase of a normal filing of revised return of income. 39.Insofar as the decision of the Bombay High Court in thecase of Casby CFS (P) Ltd., In Re., reported in (2015) 56Taxmann.com 263, relied upon by the learned Additional SolicitorGeneral is concerned, the said decision is also not applicable forthe instant case. In the said case, the Bombay High Court held thatrevised return of income pursuant to the scheme of amalgamationcould be filed only if the condition stipulated under Section 139(5) of the Income Tax Act, has been satisfied only due to the factthat the assessee company had agreed to delete the clause of thescheme which provided for filing of revised return beyond thestipulated time limit prescribed under the Income Tax Act, 1961.https://hcservices.ecourts.gov.in/hcservices/Further, in that decision, the Court was satisfied that the schemewas framed with the intention of contravening the provision of law.But, in the case on hand, it is not the case of the respondent that the scheme of arrangement and amalgamation approved by the NationalCompany Law Tribunal is contrary to law and the respectivepetitioners have misused the approved scheme for contravention ofany law. The only ground for rejection of the revised return ofincome filed by the respective petitioners by the respondent isthat it has been filed beyond the prescribed period withoutobtaining condonation of delay from the Central Board of directtaxes as per Circular No.9 of 201