M/S DALMIA POWER LTD. vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal Nos.9496­99 Of  2019 ( Arising out of SLP (C) Nos.19678­681 of 2019) M/S DALMIA POWER LIMITED & ANR.           …APPELLANTS Versus THE ASSISTANT COMMISSIONER  OF INCOME TAX CIRCLE 1, TRICHY   …RESPONDENT J U D G M E N T  INDU MALHOTRA, J.   Leave granted. 1.   The issue which arises for consideration in the present Civil Appeals is whether the Department ought to have permitted the   assessee   companies   to   file   the   revised   Income   Tax Returns for the Assessment Year 2016­2017 after the expiry of   the   due   date   prescribed   under   Section   139(5)   of   the Signature Not Verified Digitally signed by ARJUN BISHT Date: 2019.12.18 17:30:02 IST Reason: Income   Tax   Act,   1961   on   account   of   the   pendency   of 1 proceedings   for   amalgamation  of  the   assessee  companies with other companies in the group under Sections 230­232 of the Companies Act, 2013.   The factual background of this case briefly stated, is that: 2. 2.1 The Appellant No.1 ­ M/s Dalmia Power Limited and Appellant No.2 ­ M/s Dalmia Cement (Bharat) Limited are public limited companies, incorporated under the Companies   Act,   1956.   The   Appellants   have   their registered   offices   at   Dalmiapuram   Lalgudi   Taluk, Dalmiapuram, District Tiruchirappalli, Tamil Nadu. 2.2 The   Appellant   No.1   is   engaged   in   the   business   of building,   operating,   maintaining,   and   investing   in power   and   power   related   businesses,   directly   or through downstream companies. The Appellant No.2 is engaged in the business of manufacturing and selling of   cement,   generation   of   power,   maintaining   and operating   rail   systems   and   sold   waste   management system which provide services to the cement business.  2.3 The Appellant No.1 filed its original Return of Income under   Section   139   (1)   of   the   Income   Tax   Act   on 30.09.2016 for A.Y. 2016­2017 declaring a loss of Rs. 2 6,34,33,806/­.   Similarly,   Appellant   No.2   filed   its original Return of Income under Section 139 (1) of the Income   Tax   Act   on   30.11.2016   for   A.Y.   2016­2017 declaring NIL income (after setting off Brought Forward Loss amounting to Rs. 56,89,83,608/­ against Total income of Rs. 56,89,83,608/­).  2.4 With   a   view   to   restructure   and   consolidate   their businesses,   and   enable   better   realisation   of   the potential   of   their   businesses,   which   would   yield beneficial   results,   and   enhanced   value   creation   for their   shareholders,   better   security   to   their   creditors and   employees,   the   Appellants   (also   referred   to   as “Transferee Companies” or “Amalgamated Companies”) entered into 4 interconnected Schemes of Arrangement and Amalgamation with 9 companies   viz . DCB Power Ventures Ltd., Adwetha Cement Holdings Ltd., Odisha Cement   Ltd.,   OCL   India   Ltd.,   Dalmia   Cement   East Ltd.,   Dalmia   Bharat   Cements   Holdings   Ltd.,   Shri Rangam Securities & Holdings Ltd., Adhunik Cement Ltd., Adhunik MSP Cement  (Assam) Ltd. (also referred to   as   “Transferor   Companies”   or   “Amalgamating 3 Companies”)   and   their   respective   shareholders   and creditors.  The   Appointed   Date   of   the   Schemes   was 01.01.2015,   and   would   come   into   effect   from 30.10.2018. 2.5 The   Transferor   and   Transferee   Companies   filed Company Petitions under Sections 391 to 394 of the Companies Act, 1956 before the Madras and Guwahati High Courts. On the coming into force of the Companies Act, 2013,   the   Company   Petitions   were   transferred   to NCLT, Chennai and NCLT, Guwahati.  2.6 The Schemes were duly approved and sanctioned by the NCLT, Guwahati  vide  Orders dated 18.05.2017 and 30.08.2017. NCLT, Chennai sanctioned the Schemes vide   Orders   dated   16.10.2017,   20.10.2017, 26.10.2017, 28.12.2017, 10.01.2018, 20.04.2018 and 01.05.2018. 2.7 The Appellants/ Transferee Companies manually filed revised   Returns   of   Income   on   27.11.2018   with   the Department after the  Schemes were  sanctioned  and 4 approval   was   granted   by   the   NCLT.   The   revised Returns   were   based   on   the   revised   and   modified computation  of total  income and  tax liability of  the Transferor/Amalgamated   Companies.   In   the   revised Returns of Income, the Appellant No.1 claimed losses in the current year to be carried forward amounting to Rs.2,44,11,837/­;   whereas   Appellant   No.2   claimed losses   in   the   current   year,   to   be   carried   forward, amounting to Rs.1105,93,91,494/­. 2.8 The Appellants submit that the revised Returns were filed after the due date for filing revised Returns of Income   u/S.   139(5)   for   the   Assessment   Year   2016­ 2017   since   the   NCLT   passed   the   final   Order   on 01.05.2018. Consequentially, it was an impossibility to file the revised Returns before the prescribed date of 31.03.2018.  2.9 A   summary   of   the   dates   relevant   to   the   case   of Appellant No.1 are tabulated as under:

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2.10 A   summary   of   the   dates   relevant   to   the   case   of Appellant No.2 are tabulated as under:

2.11 On 04.12.2018, the Department issued a Notice under Section 143(2) of the Income Tax Act to give effect to the approval of the Scheme. 2.12 On   05.12.2018,   the   Department   recalled   the   Notice dated 04.12.2018 on the ground that the Appellants had   belatedly   filed   their   revised   Returns   without obtaining permission from the Central Board of Direct Taxes (“CBDT”) for condonation of delay under Section 6 119(2)(b) of the Income Tax Act, 1961 read with CBDT Circular No. 9/2015 dated 09.06.2015.  2.13 On   28.12.2018,   the   Department   passed   an Assessment Order u/S. 143(3) of the Income Tax Act, stating that in view of the Scheme of Arrangement and Amalgamation, the notice issued under Section 143(2), and the assessment proceedings for A.Y. 2016­2017 had   become   infructuous   with   respect   to   Appellant No.2. 2.14 The Appellants filed Writ Petitions before the Madras High Court praying for quashing of the Order dated 05.12.2018, and for a direction to the Department to complete the assessment for A.Y. 2015­2016 and A.Y. 2016­2017   after   taking   into   account   the   revised Income Tax Returns filed on 27.11.2018, as well as the Orders dated 20.04.2018 and 01.05.2018 passed by the   NCLT,   Chennai   approving   the   Schemes   of Arrangement and Amalgamation. 2.15 The learned Single Judge of the Madras High Court vide   common Judgment and Order dated 30.04.2019 allowed the Writ Petitions filed by the Appellants, and 7 quashed the Order dated 05.12.2018 passed by the Department. The Single Judge held that Clause 64 (c) of   the   Scheme   enabled   the   Appellants   to   file   their revised   Returns   of   Income   beyond   the   prescribed period   under   the   Income   Tax   Act.   The   Department could   not   override   an   approved   Scheme   of Arrangement and Amalgamation, which has statutory force, by rejecting the revised Returns of Income filed by the Appellants as being invalid.  The Department did not object to the Schemes notified under Section 230(5) of the Companies Act, 2013. Sections 139(5) and 119(2)(b) of the Income Tax Act as well as the Circular No. 9/2015 issued by the CBDT  are  not applicable  to  a case where a  revised Return of Income has been filed pursuant to a Scheme of  Arrangement and Amalgamation, which has been approved and sanctioned by the NCLT. The Department was not justified in rejecting the revised Return of Income on the ground that it had been   filed   manually,   instead   of   being   filed electronically.   Rule   12(3)   of   the   Income   Tax   Rules 8 requires   filing   of   revised   Returns   of   Income electronically, which is not  applicable  where  revised Returns of Income are filed by the assessee pursuant to   a   Scheme   of   Arrangement   and   Amalgamation approved and sanctioned by the NCLT.  Accordingly,   the   Single   Judge   directed   the Department   to   receive   the   revised   Returns   filed pursuant   to   the   approval   of   the   Schemes   of Arrangement and Amalgamation by the NCLT, Chennai and complete the assessment for A.Y. 2015­2016 and A.Y. 2016­2017 in accordance with law within a period of 12 weeks. 2.16 The Department filed Writ Appeals under Clause 15 of the   Letters   Patent   Act   challenging   the   Judgment   & Order dated 30.04.2019 passed by the Single Judge.  A Division Bench of the Madras High Court  vide the impugned Judgment dated 04.07.2019 allowed the Writ Appeals, and reversed the Judgment of the Single Judge. The Division Bench directed the Appellants to comply with the  procedure  for  filing  belated  revised Returns of Income, and  held that Clause 64 of the 9 Scheme can only be construed as an enabling clause. It cannot be inferred that the Department agreed to consider the revised Returns of Income, irrespective of whether it complies with the procedural and statutory requirements   under   the   Income   Tax   Act,   merely because Clause 64 of the Scheme was not objected to the   Department.   The   NCLT,   while   sanctioning   the Schemes,   clarified   that   the   Appellants   would   be required to approach the relevant statutory authorities for obtaining necessary permissions and compliances.  The   Department   did   not   consent   to   waive   the procedures or statutory requirements prescribed under S.139(5) and 119(2)(b) of the Income Tax Act in respect of filing of revised Returns of Income. 2.17 The Department  vide  letter dated 11.07.2019 informed the Appellants that in case they fail to file the revised Returns   before   the   expiry   of   the   limitation   period prescribed for completion of assessment in accordance with Explanation 1 to Section 153 r.w. Proviso (1) i.e. 60 days from the date of the impugned Judgment, the 10 assessment for A.Y. 2016­2017 would be conducted on the basis of the original Returns filed by them. 2.18 The Appellants made a representation on 22.07.2019 stating that subsequent to the approval and sanction of the Scheme of Arrangement and Amalgamation, the income   of   the   Transferor   companies   merged   in   the hands of the Appellants w.e.f. 01.01.2015, being the Appointed Date as the “date of succession” under S. 170 of the Act. Accordingly, the Appellants requested the Department to give cognizance to the Scheme, and accept   the   revised   Return   of   Income   filed   on 27.11.2018, while completing the assessment for the A.Y. 2016­2017. 2.19   The   Department   informed   the   Appellants   on 05.08.2019 that since the revised Returns were not in accordance with Sections 139(5), 139(3) of the Act r.w. Rule 12(3) of the Income Tax Rules, 1962, the revised Returns were invalid, and could not be considered in view   of   the   procedural   requirement   under   Section 119(2)(b) read with CBDT Circular No. 9 of 2015.  11 2.20 Aggrieved by the Judgment of the Division Bench, the Appellants   have   filed   the   present   common   Civil Appeals on 09.08.2019 before this Court.   We have heard Mr. S. Ganesh, Senior Counsel appearing for 3. the   Appellants,   and   Mr.   Arijit   Prasad,   Senior   Advocate appearing   for   the   Department.   We   have   perused   the pleadings and written submissions filed by the parties.  4.    Discussion and Analysis 4.1 A   perusal   of   Clause   63   (c)   of   the   Scheme   of Arrangement and Amalgamation between DCB Power Ventures   Ltd.,   Adwetha   Cement   Holdings   Ltd., Appellant No.1 and Appellant No.2 and their respective shareholders   and   creditors,   as   approved   and sanctioned by the NCLT, Chennai   vide   Orders dated 16.10.2017,   20.10.2017   and   Corrigendum   dated 26.10.2017 shows that the Appellants were entitled to file   revised   Returns   of   Income,   after   the   prescribed time limit for filing or revising the returns had lapsed, without incurring any liability on account of interest, penalty or any other sum.   12 Clause   63   (c)   of   the   said   Scheme   is   set   out hereinbelow for ready reference: “( c) DCBL   [Appellant   No.2]   shall   be   entitled   to, amongst others, file/or revise its income tax returns, TDS/TCS returns, wealth tax returns, service tax, excise duty, sales tax, value added tax, entry tax, cess, professional tax or any other statutory returns, if required, credit for advance tax paid, tax deducted at source, claim for sum prescribed under Section 43B of the Income Tax Act on payment basis, claim for deduction of provisions written back by DCBL previously disallowed in the hands of (i) DCB Power pertaining   to   Power   Undertakings   and   (ii)   ACHL and/or pertaining to Amalgamating Undertaking 1, under   the   Income   Tax   Act,   credit   of   tax   under Section   115JB   read   with   Section   115JAA   of   the Income   Tax   Act,   credit   of   foreign   taxes paid/withheld   etc.   if   any,   as   may   be   required consequent to implementation of this Scheme and where necessary to give effect to this Scheme, even if the prescribed time limits for filing or revising such returns have lapsed without incurring any liability on account of interest, penalty or any other sum. DCBL   shall   have   the   right   to   claim   refunds,   tax credits, set­offs and/or adjustments relating to its income or transactions entered into by it by virtue of this Scheme with effect from Appointed Date I and Appointed Date II, as applicable. The taxes or duties paid by, for, or on behalf of the Power Undertakings and   Amalgamating   Undertaking   1   relating   to   the period on or after Appointed Date I and Appointed Date II respectively shall be deemed to be the taxes or duties paid by DCBL, and accordingly DCBL shall be entitled to claim credit or refund for such taxes or duties.  DPL   [Appellant   No.1]   shall   be   entitled   to, amongst others, file/or revise its income tax returns, TDS/TCS returns, wealth tax returns, service tax, excise duty, sales tax, value added tax, entry tax, cess, professional tax or any other statutory returns, if required, credit for advance tax paid, tax deducted at source, claim for sum prescribed under Section 43B of the Income Tax Act on payment basis, claim 13 for   deduction   of   provisions   written   back   by   DPL previously disallowed in the hands of DCB Power pertaining   to   Amalgamating   Undertaking   2   under the   Income     Tax   Act,   credit   of   tax   under   Section 115JB read with Section 115JAA of the Income Tax Act, credit of tax under Section 115JB read with Section 115 JAA of the Income Tax Act, credit of foreign tax paid/withheld etc., if any, pertaining to Amalgamating Undertaking 2 as may be required consequent to implementation of this Scheme and where necessary to give effect to this Scheme, even if the prescribed time limits or revising such returns have   lapsed   without   incurring   any   liability   on account of interest, penalty or any other sum. DPL shall have the right to claim refunds, tax credits, set­ offs  and/or adjustments  relating to its  income or transactions   entered   into   by   it   by   virtue   of   this Scheme with effect from Appointed Date I. The taxes or   duties   paid   by,   for,   or   on   behalf   of   the Amalgamating Undertaking 2 relating to the period on or after Appointed Date I shall be deemed to be the taxes or duties paid by DPL, and accordingly DPL shall be entitled to claim credit or refund for such taxes or duties .” [emphasis supplied] 4.2 Similarly, Clause 64 (c) of the Scheme of Arrangement and Amalgamation between Odisha Cement Ltd., OCL India Limited, Dalmia Cement East Ltd., Shri Rangam Securities   &   Holdings   Ltd.,   Dalmia   Bharat   Cement Holdings Ltd., Appellant No.1 and Appellant No.2 and their   respective   shareholders   and   creditors,   as approved  and   sanctioned  by   the   NCLT,   Chennai  on 20.04.2018   and   01.05.2018,   shows   that   provisions were   incorporated   to   enable   the   Appellants   to   file 14 revised Returns even after the prescribed time limit for filing   or   revising   such   Returns   had   lapsed,   without incurring any liability on account of interest, penalty or any other sum.  Clause   64   (c)   of   the   said   Scheme   is   extracted hereinbelow for ready reference: “(c) Amalgamated   Company   and   Transferee [Appellant Nos. 1 and 2 ] Company shall be entitled to,   amongst   others,   file/or   revise   its   income   tax returns,   TDS/TCS   returns,   wealth   tax   returns, service tax, excise duty, sales tax, value added tax, entry   tax,   cess,   professional   tax   or   any   other statutory returns, if required, credit for advance tax paid,   tax   deducted   at   source,   claim   for   sum prescribed under Section 43B of the Income Tax Act on payment basis, claim for deduction of provisions written   back   by   Amalgamated   Company   and Transferee Company previously disallowed in the hands of Amalgamating Company and Transferor Company (relating to the Transferred Undertaking) respectively under the Income Tax Act, credit of tax under section 115JB read with section 115JAA of the   Income   Tax   Act,   credit   of   foreign   tax paid/withheld, if any, pertaining to Amalgamating Company and Transferor Company (relating to the Transferred   Undertaking)   as   may   be   required consequent to implementation of this Scheme and where necessary to give effect to this Scheme, even if the prescribed time limited for filing or revising such   returns   have   lapsed   without   incurring   any liability on account of interest, penalty or any other sum.   Amalgamated   Company   and   Transferee Company shall have the right to claim refunds, tax credits, set­offs and/or adjustments relating to the income   or   transactions   entered   into   by   them   by virtue   of   this   Scheme   with   effect   from   Appointed Date. The taxes or duties paid by, for, or on behalf of,   Amalgamating   Company   and   Transferor Company   (pertaining   to   Transferred   Undertaking) 15 relating to the period on or after Appointed Date, shall be deemed to be the taxes or duties paid by the   Amalgamated   Company   and   Transferee Company respectively and Amalgamated Company and Transferee Company shall be entitled to claim credit or refund for such taxes or duties.”  [emphasis supplied] 4.3 In compliance with Section 230(5) of the Companies Act, 2013, notices under Form No. CAA. 3 under sub­ Rule (1) of Rule 8 of the Companies (Compromises, Arrangements   and   Amalgamations)   Rules,2016   were sent to the Department.  Sub­Section (5) of Section 230 of the Companies Act, 2013 provides as under: “ (5) A notice under sub-section (3) along with all the documents in such form as may be prescribed shall also be sent to the Central Government, the income-tax authorities, the Reserve Bank of India, the Securities and Exchange Board, the Registrar, the respective stock exchanges, the Official Liquidator, the Competition Commission of India established under sub-section (1) of section 7 of the Competition Act, 2002, if necessary, and such other sectoral regulators or authorities which are likely to be affected by the compromise or arrangement and shall require that representations, if any, to be made by them shall be made within a period of thirty days from the date of receipt of such notice, failing which, it shall be presumed that they have no representations to make on the proposals . ” [emphasis supplied] Sub­section   (5)   of   Section   230   requires   that   a notice of the meeting under sub­section (3) of Section 16 230 along with all the documents pertaining to the scheme, shall be sent to the Central Government, and statutory   authorities   such   as   the   Income   Tax Department,   RBI,   SEBI,   ROC   etc.   and   such   other sectoral regulators or authorities which are likely to be affected   by   the   compromise   or   arrangement.   The statutory authorities could raise objections within 30 days   from   the   date   of   receipt   of   the   notice,   failing which,   it   would   be   presumed   that   they   had   no representation to make on the proposed schemes of compromise, arrangements and amalgamations.  4.4 Similarly, Rule 8(3) of the Companies (Compromises, Arrangements   and   Amalgamations)   Rules,   2016 provides that any representation made to the statutory authorities notified under Section 230(5), shall be sent to the NCLT within a period of thirty days from the date   of   receipt   of   such   notice,   and   a   copy   of   such representation   shall   simultaneously   be   sent   to   the concerned   companies.   In   case   no   representation   is received within thirty days, it shall be presumed that the   statutory   authorities   have   no   representation   to 17 make   on   the   proposed   scheme   of   compromise   or arrangement. Rule   8   of   the   Companies   (Compromises, Arrangements and Amalgamations) Rules, 2016 is set out hereinunder for ready reference: “(3) If the authorities referred to under sub-rule (1) desire to make any representation under sub-section (5) of section 230, the same shall be sent to the Tribunal within a period of thirty days from the date of receipt of such notice and copy of such representation shall simultaneously be sent to the concerned companies and in case no representation is received within the stated period of thirty days by the Tribunal, it shall be presumed that the authorities have no representation to make on the proposed scheme of compromise or arrangement.”    [emphasis supplied] 4.5 The Department did not raise any objection within the stipulated period of 30 days despite service of notice.  4.6 Pursuant thereto, the Schemes were sanctioned by the NCLT, Chennai   vide   Orders 16.10.2017, 20.10.2017, 26.10.2017, 28.12.2017, 10.01.2018, 20.04.2018 and 01.05.2018; and,   vide   Orders dated 18.05.2017 and 30.08.2017 by the NCLT, Guwahati. Accordingly, the 1 Schemes attained statutory force  not only  inter se  the Transferor and Transferee Companies, but also  in rem, 1 J.K. (Bombay) (P) Ltd. v. New Kaiser-I-Hind Spg. and Wvg. Co. Ltd. , (1969) 2 SCR 866 : AIR 1970 SC 1041 : (1970) 40 Comp Cas 689; 18 since   there   was   no   objection   raised   either   by   the statutory   authorities,   the   Department,   or   other regulators or authorities, likely to be affected by the Schemes.  4.7 As a consequence, when the companies merged and amalgamated   into   another,   the   amalgamating companies lost their separate identity and character, and ceased to exist upon the approval of the Schemes 2 of Amalgamation.   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.  This Court in  Marshall Sons & Co. (India) Ltd. v. 3 ITO  held that where the Court does not prescribe any specific   date   but   merely   sanctions   the   scheme 2 Pr. Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Limited , Civil Appeal No 5409 of 2019, decided on 25.07.2019 3 Marshall Sons & Co. (India) Ltd. v. ITO (1997) 2 SCC 302 19 presented,   it   would   follow   that   the   date   of amalgamation/date of transfer is the date specified in the scheme as “the transfer date”. It was held that: “14. Every scheme of amalgamation has to necessarily provide a date with effect from which the amalgamation/transfer shall take place. The scheme concerned herein does so provide viz. 1-1-1982. It is true that while sanctioning the scheme, it is open to the Court to modify the said date and prescribe such date of amalgamation/transfer as it thinks appropriate in the facts and circumstances of the case. If the Court so specifies a date, there is little doubt that such date would be the date of amalgamation/date of transfer. But where the Court does not prescribe any specific date but merely sanctions the scheme presented to it — as has happened in this case — it should follow that the date of amalgamation/date of transfer is the date specified in the scheme as “the transfer date”. It cannot be otherwise. It must be remembered that before applying to the Court under Section 391(1), a scheme has to be framed and such scheme has to contain a date of amalgamation/transfer. The proceedings before the Court may take some time; indeed, they are bound to take some time because several steps provided by Sections 391 to 394-A and the relevant Rules have to be followed and complied with. During the period the proceedings are pending before the Court, both the amalgamating units, i.e., the Transferor Company and the Transferee Company may carry on business, as has happened in this case but normally provision is made for this aspect also in the scheme of amalgamation.” It was further held that pursuant to the Scheme of Arrangement   and   Amalgamation,   the   assessment   of the Transferee Company must take into account the 20 income   of   both   the   Transferor   and   Transferee Companies. The Court observed as follows: “15. The counsel for the Revenue contended that if the aforesaid view is adopted then several complications will ensue in case the Court refuses to sanction the scheme of amalgamation. We do not see any basis for this apprehension. Firstly, an assessment can always be made and is supposed to be made on the Transferee Company taking into account the income of both the Transferor and Transferee Companies. Secondly, and probably the more advisable course from the point of view of the Revenue would be to make one assessment on the Transferee Company taking into account the income of both of Transferor or Transferee Companies and also to make separate protective assessments on both the Transferor and Transferee Companies separately. There may be a certain practical difficulty in adopting this course inasmuch as separate balance-sheets may not be available for the Transferor and Transferee Companies. But that may not be an insuperable problem inasmuch as assessment can always be made, on the available material, even without a balance-sheet. In certain cases, best judgment assessment may also be resorted to. Be that as it may, we need not pursue this line of enquiry because it does not arise for consideration in these cases directly.” 4.9 In the present case, Appellant Nos.1 and 2/Transferee Companies filed their original Returns of Income on 30.09.2016   and   30.11.2016   respectively.   Thereafter, they   entered   into   Schemes   of   Arrangement   and Amalgamation with 9 Transferor Companies in 2017. The Schemes were finally sanctioned and approved by the NCLT, Chennai  vide  final orders dated 20.04.2018 21 and   01.05.2018.   The   Appointed   Date   as   per   the Schemes   was   01.01.2015.   Consequently,   the Transferor/ Amalgamating Companies ceased to exist with effect from the Appointed Date, and the assets, profits and losses etc. were transferred to the books of the   Appellants/   Transferee   Companies/Amalgamated Companies.  The   Schemes   incorporated   provisions   for   filing the revised Returns beyond the prescribed time limit since   the   Schemes   would   come   into   force retrospectively   from   the   Appointed   Date   i.e. 01.01.2015.   Accordingly,   the   Appellants   filed   their   Revised Returns   on   27.11.2018.   The   re­computation   would have a bearing on the total income of the Appellants with   respect  to   the   A.Y.   2016­2018,   particularly   on matters   in   relation   to   carrying   forward   losses, unabsorbed depreciation etc. 5.   The counsel appearing for the Department relied on Section 139(5) and 119(2)(b) of the Income Tax Act r.w. Circular No.9   of   2015   issued   by   the   CBDT   to   contend   that   the 22 Appellant   ought   to   have   made   an   application   for condonation   of   delay,   and   sought   permission   from   the CBDT, before filing the revised Returns beyond the statutory period of 31.03.2018. The Appellants having belatedly filed their revised Returns on 27.11.2018, which was beyond the due date of 31.03.2018 for A.Y. 2016­2017, the assessment could only be done on the basis of the original Returns filed by the Appellants. 6. Section   139(5)  of   the  Income   Tax   Act,   as   it  stood   at   the relevant   time,   makes   it   clear   that   where   an   assessee furnishes a return under sub­section (1) or sub­section (4) of Section   139,   and   later   discovers   an   omission   or   mistake therein, he may furnish a revised Return at any time before the   expiry   of   one   year   from   the   end   of   the   relevant assessment year or before the completion of the assessment, whichever is earlier.  Section   139(5)   of   the   Income   Tax   Act   is   set   out hereinunder for ready reference: “ 139(5). If any person, having furnished a return under sub­section (1) or sub­section (4) of Section 139, discovers an omission or wrong statement therein, he may furnish a revised return at any time before the expiry of one year 23 from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier ” 7. In our view, this provision 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. 8. 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.   2016­2017   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. 9. 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 24 Act after the expiry of the stipulated period under the Income Tax Act.   Section 119(2)(b) of the Income Tax Act is reproduced hereinunder for ready reference: “ 119.  Instructions to subordinate authorities.   (2) Without prejudice to the generality of the foregoing power,— …  (b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any income­tax authority, not being a Commissioner (Appeals) to   admit   an   application   or   claim   for   any   exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law.” On a plain reading of Section 119(2)(b), we find 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 4 handmaiden   of   justice.   The   purpose   of   assessment proceedings   is   to   assess   the   tax   liability   of   an   assessee 5 correctly in accordance with law.   4 Kailash v Nankhu (2005) 4 SCC 480; State of Punjab v Shamlal Murari (1976) 1 SCC 719 5 National Thermal Power Co. Ltd. v. Commissioner of Income Tax , (1997) 7 SCC 489 25 10. Section   170(1)   of   the   Income   Tax   Act,   provides   that   the successor of an assessee shall be assessed in respect of the income   of   the   previous  year  after   the   date   of   succession. S.170(1) of the Income Tax Act provides as under: “170. Succession to business otherwise than on death. (1)  Where a person carrying on any business or profession (such person hereinafter in this section being referred to as the predecessor) has been succeeded therein by any other person (hereinafter in this section referred to as the successor)   who  continues  to   carry  on  that   business  or profession,­ (a)  the predecessor shall be assessed in respect of the income of the previous year in which the succession took place up to the date of succession; (b)  the   successor   shall   be   assessed   in   respect   of   the income of the previous year after the date of succession.” Sub­section (1) of Section 170 makes it clear that it is incumbent upon the Department to assess the total income of the successor in respect of the previous assessment year after the date of succession.  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 Department is required to assess the 26 income of the Appellants after taking into account the revised Returns filed after amalgamation of the companies. 11. In light of the aforesaid discussion, we find that the learned Single   Judge   had   rightly   allowed   the   Writ   Petitions.   We accordingly   set   aside   the   impugned   Judgment   and   Order dated 04.07.0219 passed by the learned Division Bench, and restore the judgment dated 30.04.2019 passed by the learned Single Judge. Accordingly, the Civil Appeals are allowed. The   Department   is   directed   to  receive   the   revised Returns of Income for A.Y. 2016­2017 filed by the Appellants, and complete the assessment for A.Y. 2016­2017 after taking into account the Schemes of Arrangement and Amalgamation as sanctioned by the NCLT.  12. Pending Applications, if any, are accordingly disposed of. Ordered accordingly. …..……...........................J. (UDAY UMESH LALIT) ..….……..........................J. (INDU MALHOTRA) New Delhi December 18, 2019 27