Big Relief! HC Allows Late Filing of Revised ITR After Company Merger

The petitioner filed a writ under Articles 226 and 227 of the Constitution, challenging the order dated 05.09.2023, passed by the Chief Commissioner of Income Tax, rejecting condonation of delay for filing a revised return for AY 2019–20 under Section 119(2)(b) of the Income Tax Act, 1961.

The company had undergone a merger pursuant to an NCLT order dated 09.01.2020, effective from 01.04.2016. Due to this, revised books of accounts and tax returns were needed for AYs 2017–18 to 2019–20. An application to condone delay for all three years was filed in June 2020. The delay was condoned for AYs 2017-18 and 2018-19 but rejected for AY 2019-20.

The Income Tax Department has rejected the application of the petitioner for A.Y. 2019-20 on the ground that the petitioner had more than 10 months’ time from January 2020 to November,2020 to file revised return of income by preparing Book of Accounts and therefore, there was no genuine hardship to file revised return of income by the petitioner.

Issue Raised: Whether the rejection of condonation for delay solely for AY 2019-20 was justified, especially when the same reason applied to earlier years, whose delay was condoned.

High Court’s Decision:

The Court held that the explanation for the delay for the assessment year 2019-20 was identical to that of earlier years. Since the revised return for the year 2019-20 was contingent on completing prior years’ filings, denying condonation created genuine hardship and contradicted the principle laid down in Dalmia Power Ltd. v. ACIT.

Accordingly, the impugned order was quashed, and the delay for filing ITR for the AY 2019–20 was condoned. The petition was thus allowed without costs.