Condonation of Delay in Filing Revised Returns Allowed Based on Recasted Accounts

 Condonation of Delay in Filing Revised Returns Allowed Based on Recasted Accounts

Summary in Key Points:

• Issue: Whether the delay in filing revised income tax returns can be condoned when the delay is caused by the recasting of accounts ordered by the National Company Law Tribunal (NCLT).
• Facts: The assessee’s accounts were recasted and audited based on an NCLT order. The assessee filed an application for condonation of delay in filing revised returns, but the Central Board of Direct Taxes (CBDT) rejected the application. The High Court, however, allowed the assessee to file revised returns based on the recasted accounts.
• Decision: The Supreme Court dismissed the Special Leave Petition (SLP) filed by the revenue department against the High Court’s order, upholding the condonation of delay and allowing the assessee to file revised returns based on the recasted accounts.

ANALYSIS:

The Supreme Court dismissed the SLP filed by the revenue department, confirming the High Court’s decision. The court emphasized the following:

• Recasting of Accounts: The assessee’s accounts were recasted and audited under the order of the NCLT, which was initiated by the Ministry of Corporate Affairs (MCA).
• Acceptance by NCLT and RoC: The recasted accounts were accepted by the NCLT and filed with the Registrar of Companies (RoC) under the Ministry of Corporate Affairs.
• No Objection by Income Tax Department: Since the recasted accounts were accepted by the NCLT and filed with the RoC, the Income Tax Department could not object to the condonation of delay in filing revised returns based on these accounts.
• Assessment on Recasted Accounts: The court upheld the High Court’s directive to allow the assessee to file revised returns and to assess their income based on the recasted accounts.

Important Note: This case clarifies that when accounts are recasted under the order of a competent authority like the NCLT and accepted by the relevant regulatory bodies, the Income Tax Department cannot deny condonation of delay in filing revised returns based on those recasted accounts. This decision ensures that taxpayers are not penalized for delays caused by circumstances beyond their control, such as court-ordered recasting of accounts.