Madrasdated High Court · 2025

W.P.Nos.1882 and 1888 of 2024Prayer: Writ Petition filed under Article 226 of the Constitution of India, for issuance of a Writ of Certiorari to call for the records in DIN No.ITBA/AST/F/144C/2023-24/1059217662(1) dated 29.12.2023 issued under 144 C(1) of the Income Tax Act, 1961 on the file of the Respondent for the Assessment Year 2021-22 and quash the same.W.P.No.1888 of 2024:M/s.Corrohealth Infotech Private Limited,Represented by its Authorised Signatory,Ms.Meena Srinath,DLF IT Park – SEZ, 1B, 3rd Floor,1/124, Shivaji Garden,Mount Poonamallee Road,Manapakkam, NandambakkamKudiyiruppu-600 089. ... Petitioner Vs.The Deputy Commissioner of Income Tax,Corporate Circle 1(1) CHE,Room No.611, Wanaparthy Block, VI-Floor,Chennai-Wanarpathy Block,121, Mahatma Gandhi Road,Nungambakkam,Chennai-600 034.... RespondentPrayer: Writ Petition filed under Article 226 of the Constitution of India, for issuance of a Writ of Certiorari to call for the records in DIN No.ITBA/GEA/M/170A/2023-24/1059225732(1) dated 30.12.2023 issued under 170A of the Income Tax Act, 1961 on the file of the Respondent for the Assessment Year 2021-22 and quash the same.2/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 2024For Petitioner : Mr.Percy J.Pardiwalla, Senior Advocatein both W.Ps., for Mr.Sandeep Bagmar.RFor Respondent: Mr.Avinash Krishnan Raviin both W.Ps., Junior Standing CounselCOMMON ORDERBy this Common Order, both these writ petitions are being disposed of.2. The petitioner in W.P.No.1882 of 2024, since merged with the petitioner in W.P.No.1888 of 2024 has challenged the impugned draft Assessment Order dated 29.12.2023, whereby the petitioner has been called upon to file its acceptance or objections before the Dispute Resolution Panel and indicate the same to the Assessment Officer within a period of 30 days from the date of receipt of draft assessment Order as is required under Section 144(C) of the Act.3. The challenge to the aforesaid Order is that the petitioner in W.P.No.1882 of 2024 has merged with the petitioner in W.P.No.1888 of 2024 by two separate orders of the National Company Law Tribunal, the Chennai Bench and the Mumbai Bench dated 13.10.2021 and 28.04.2022 respectively. 3/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 20244. It is submitted by the learned counsel for the petitioner that the petitioner in W.P.No.1882 of 2024 has ceased to exist as a company in terms sanctioned scheme of Amalgamation of an order of the Chennai and Mumbai Bench of the National Company Law Tribunal (NCLT), dated 13.10.2021 and 28.04.2022 respectively.5. It is submitted by the learned counsel for the petitioner that as a matter of fact, the petitioner in W.P.No.1888 of 2024 had also filed a revised Return of Income on 30.11.2022 for the Assessment Year 2020-21 as is required under Section 170A of the Income Tax Act, 1961, in view of the amalgamation of the two companies. 6. It is further submitted that the respondent in W.P.No.1888 of 2024 has however proceeded to pass the impugned giving effect Order dated 30.12.2023 by adding a sum of Rs.1,56,54,63,349/- as the income of the two companies pursuant to the merger. 7. It is submitted by the learned counsel for the petitioner that the impugned orders have been passed in violation of Principles of Natural Justice, as no notice has been issued before passing of the aforesaid giving 4/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 2024effect Order dated 30.12.2023 impugned in W.P.No.1888 of 2024.8. On behalf of the respondent, learned counsel for the respondent would submit that the petitioner in W.P.No.1882 of 2024 was the transferor Company and had filed a Return of Income on 15.03.2022 for the Assessment Year 2020-2021. It is submitted that the said Company had filed the Return of Income by declaring a taxable income of Rs.81,23,28,020/-. It is further submitted that subsequently, a notice was issued which culminated in intimation on 26.07.2022.9. By way of rejoinder, the learned Senior Counsel for the petitioner would submit that the intimation dated 26.07.2022 was never served on the transferor Company namely the petitioner in W.P.No.1882 of 2024.10. It is submitted by the learned junior standing counsel for the respondent that the Department was not informed about the amalgamation eventhough proceedings were pending before National Company Law Tribunal (NCLT). Hence, learned counsel for the respondent relied on the decisions of the Hon’ble Supreme Court and the Hon’ble Division Bench of 5/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 2024this Court as follows:-1.Integra Garments & Textiles Ltd., v. The Union of India and Others [W.P.No.430 of 2020].2.The Commissioner of Income Tax v. M/s.Shaw Wallace Properties Limited [Tax Case (Appeal) Nos.60 and 61 of 2015].3.Principal Commissioner of Income Tax (Central) – 2. v. Mahagun Realtors (P) Ltd., [2022] 443 ITR 194 (SC).4. Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Limited [2019] 416 ITR 613 (SC).11. The learned counsel for the respondent would further submit that the decision of the Hon’ble Supreme Court in Principal Commissioner of Income Tax vs. Maruthi Suzuki India Limited [AIRONLINE 2019 SC 714] was also distinguished in the above three decisions and the learned counsel also relied upon the recent decisions of this Court as follows:-Pallava Textiles Private Limited v. Assessment Unit, Income Tax Department, New Delhi and Others [2024] 467 ITR 539 (Mad).12. I have considered the submissions of the learned counsel for the petitioner and the learned counsel for the respondent and the scope of Section 170A of the Act.13. The impugned draft Assessment Order dated 29.12.2023 passed under Section 144(C)(1) of the Income Tax Act, 1961, was in the name of the Transferor Company namely M/s.Visionary RCM Infotech (India) Private 6/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 2024Limited, (the petitioner in W.P.No.1882 of 2024). The impugned giving effect Order dated 30.12.2023 was issued in the name of the Transferee Company namely M/s.Corrohealth Infotech Private Limited, (the petitioner in W.P.No.1888 of 2024) as the said Company ceased to be in existence. 14. The aforesaid impugned orders are unsustainable, particularly in the light of the Return of Income filed by the respective petitioners on 15.03.2022 and 14.03.2022 for the Assessment Year 2021-2022. These were filed after National Company Law Tribunal (NCLT), Chennai passed an Order on 13.10.2021. Thereafter, pursuant to the Order dated 28.04.2022 passed by National Company Law Tribunal (NCLT), Mumbai, the Transferee Company namely M/s.Corrohealth Infotech Private Limited filed a revised Return of Income on 30.11.2022. 15. By virtue of statutory intervention under Section 170A of the Act, w.e.f.01.04.2022 vide Finance Act, 2022 a Transferee Company had to file a Return of Income within a period of six months from the end of the month in which the said order was passed by High Court or Appellate Authority as defined in clause (1) of Section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), as the case may be. 7/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 202416. The said provision is further modified w.e.f. 01.04.2023 vide the Finance Act, 2023 by which time the Transferee Company namely M/s.Corrohealth Infotech Private Limited, (the petitioner in W.P.No.1888 of 2024) had already filed modified Return of Income on 30.11.2022. For the sake of clarity, Section 170A as it stood at the time of its incorporation in the Income Tax Act, 1961 and as it stands w.e.f. 01.04.2023 is reproduced below:-Section 170A of the Income Tax Act, 1961 (Prior to 01.04.2023)Section 170A of the Income Tax Act, 1961 (After 01.04.2023)“170A. Effect of order of tribunal or court in respect of business reorganisation.-(1) Notwithstanding anything to the contrary contained in section 139, in a case of business reorganisation, where prior to the date of order of a High Court or tribunal or an Adjudicating Authority as defined in clause (1) of section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), as the case may be, any return of income has been furnished by the successor under the provisions of section 139 for any assessment year relevant to the previous year to which such order applies, such successor shall furnish, within a period of six months from the end of the month in which the said order was issued, a “170A. Effect of order of tribunal or court in respect of business reorganisation.-(1) Notwithstanding anything to the contrary contained in section 139, in a case of business reorganisation, where prior to the date of order of a High Court or tribunal or an Adjudicating Authority as defined in clause (1) of section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), (hereinafter referred to as order in respect of business reorganisation) as the case may be, any return of income has been furnished by an entity to which such order applies under the provisions of section 139 for any assessment year relevant to the previous year to which such order applies, the successor shall furnish, 8/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 2024modified return in such form and manner, as may be prescribed, in accordance with and limited to the said order.Explanation.—In this section, the expressions—(i) “business reorganisation” means the reorganisation of business involving the amalgamation or demerger or merger of business of one or more persons;(ii) “successor” means all resulting companies in a business reorganisation, whether or not the company was in existence prior to such business reorganisation.within a period of six months from the end of the month in which the said order was issued, a modified return in such form and manner, as may be prescribed, in accordance with and limited to the said order.Explanation.—In this section, the expressions—(i) “business reorganisation” means the reorganisation of business involving the amalgamation or demerger or merger of business of one or more persons;(ii) “successor” means all resulting companies in a business reorganisation, whether or not the company was in existence prior to such business reorganisation.17. The purpose of incorporating Section 170A is to ensure that the transferee Company files the modified Return of Income in view of the merger/amalgamation. In fact, the said provision was incorporated taking note of the ratio of the decision of the Hon’ble Supreme Court in Dalmia Power Ltd., v. Assistant Commissioner of Income Tax, Circle-1, Trichy [2020] 420 ITR 339, wherein, in Paragraph Nos. 4.8, the Hon’ble Supreme 9/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 2024Court has observed as under:-“4.8. Every scheme of arrangement and amalgamation must provide for an Appointed Date. The Appointed Date is the date on which the assets and liabilities of the transferor company vest in and stand transferred to the transferee company. The Schemes come into effect from the Appointed Date, unless modified by the Court.”18. To give effect to Section 170A of the Act, Rule 12AD was also inserted into the Income Tax Rules,- vide Notification dated 19.09.2022 of Central Board of Direct Taxes in G.S.R 709(E), which reads as under:-“G.S.R 709(E).—In exercise of the powers conferred by section 170Aread with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend Income-tax Rules, 1962, namely:–1. Short title and commencement.—(1) These rules may be called the Income-tax (31stAmendment) Rules, 2022.(2) They shall come into force from the 1st day of November, 2022.2.In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), after rule 12AC, the following rule shall be inserted, namely:––‘12AD. Return of income under section 170A.—(1) The modified return of income to be furnished by a successor entity to a business reorganisation, as referred to in section 170A, for an assessment year, shall be in the Form ITR-A and verified in the manner specified therein.(2) The return of income referred to in sub-rule (1) shall be furnished electronically under digital signature.(3) If the assessment or reassessment proceedings for an assessment year relevant to a previous year to which the order of the business reorganisation applies have been completed or are pending on the date of furnishing of the modified return in accordance with the provisions of section 170A, the Assessing Officer shall, pass an order modifying 10/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 2024the total income of the relevant assessment year determined in such assessment or reassessment, or proceed to complete the assessment or reassessment proceedings, as the case may be, in accordance with the order of the business reorganisation and the modified return so furnished.(4) The Principal Director-General of Income-tax (Systems) or Director-General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the return in the manner specified in sub-rule (2).’.3.In the principal rules, in Appendix-II,––(I) in Form ITR-6, for every assessment year commencing on the 1st day of April, 2022 or any earlier assessment year, in the Part A-GEN, for entries of serial number (A19)(a)(i), the following shall be substituted, namely:—“(A19) (a)(i) Filed u/s(Tick)[Please see instructions]□139(1)-On or before due date, □139(4)-After due date, □139(5)-Revised return, □ 92CD-Modified return,□119(2)(b)-After condonation of delay, □170A-After order by the tribunal or court.”;19. Thus, the purpose of Section 170A of the Act would get defeated if the proceedings initiated against the Tranferor Company was carried independently. It can result in dual demand for taxation. i.e., one in the hands of the Transferee Company which no longer exists and one in the name of the Transferee Company which would have filed a modified Return of Income under Section 170A of the Act. 11/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 202420. In view of the above discussion, the Draft Assessment Order dated 29.12.2023 and also the giving effect Order dated 30.11.2023 for the Assessment Year 2020-2021 impugned in the respective writ petitions are quashed.21. Since the modified Return of Income has been filed on 30.11.2022 by the Transferor Company viz., the petitioner in W.P.No.1888 of 2024 for the said Assessment Year, the Transfer Pricing Officer is directed to look into the same and pass a fresh order on merits. Thereafter, it is for the petitioner to either approach the Dispute Resolution Panel in case the petitioner wants to challenge the same order or abide by the same. 22. These Writ Petitions stand disposed of with the above observations. No costs. Consequently, connected Writ Miscellaneous Petitions are closed.12.12.2025ssn Neutral Citation: Yes / No12/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 2024To:The Deputy Commissioner of Income Tax,Corporate Circle 1(1) CHE,Room Bo.611, Wanaparthy Block, VI-Floor,Chennai-Wanarpathy Block,121, Mahatma Gandhi Road,Nungambakkam,Chennai-600 034.13/14 https://www.mhc.tn.gov.in/judis W.P.Nos.1882 and 1888 of 2024C.SARAVANAN, J.,ssn W.P.Nos.1882 and 1888 of 2024and W.M.P.Nos.1961, 1966, 1970 and 1975 of 2024 andW.M.P.No.31886 of 202512.12.202514/14