IMPORTANT POINT
Exceptional items from a resolution plan do not count as gross receipts under Section 44AB, thus invalidating the order declaring the return defective.

ORDER :

BHARGAV D. KARIA

1. Heard learned advocate Mr. Dhinal Shah for the petitioner and learned advocate Mr. Dev D. Patel for learned Senior Standing Counsel Mr. Varun Patel for the respondents.

2. Rule returnable forthwith. Learned advocate Mr. Patel waives service of notice of Rule for the respondents.

3. Having regard to the controversy in the narrow compass arising in this petition and with the consent of the respective learned advocates appearing for the parties, the matter is taken up for hearing.

4. The brief facts of the case are that the petitioner a public limited company registered under the provisions of the Companies Act filed return of income for the Assessment Year 2022-23 declaring total income of ‘Nil’. Subsequently, a revised return was filed on 31st December 2022.

4.1. It is the case of the petitioner that initially, the petitioner carried on business from Calcutta and subsequently, the petitioner was admitted under the Insolvency and Bankruptcy Resolution Plan under the provisions of Insolvency and Bankruptcy Code, 2016. Such plan was approved by the National Company Law Tribunal, Calcutta vide order dated 16th December 2021, by which the Meghmani Organics Limited was declared as successful resolution applicant and accordingly, the registered office of the petitioner was shifted to Ahmedabad, Gujarat.

4.2. It is also the case of the petitioner that along with return, the petitioner also filed audited financial statement.

4.3. The petitioner received a notice under Section 139(9) of the Income Tax Act, 1961 (for short, “the Act”) on 31st December 2022 from the respondent No.1 – Deputy Director of Income Tax, C.P.C. Bengaluru, Centralized Processing Centre raising the defect namely non-submission of tax audit report under Section 44AB of the Act with the return of income on the ground that total sales, turnover or gross receipt of the petitioner exceeded to more Rs.10 Crore.

4.4. In response to such notice, the petitioner files reply on 6th January 2023 stating that there was no total gross receipt, turnover or total sales exceeding Rs. 10 Crore. The petitioner thereafter received another notice on 23rd January 2023 pointing out the same defect in the return.

4.5. The petitioner thereafter received order dated 15th December 2023 stating that the response filed by the petitioner, return of income has been deemed to be invalid in accordance with the provisions of Section 139(9) of the Act.

5. Being aggrieved, the petitioner has preferred this petition with the following prayers:

“B. Your Lordships may be pleased to quash and aside the Defective Order dated 15/12/2023 marked as Annexure – C declaring the return of income tax filed on 31.12.2022 (revised return) as invalid by the petitioner along with all the consequential and incidental proceedings;

C. Your Lordships may be pleased to issue a writ of certiorari or in the nature of certiorari or any other appropriate writ, orders or directions to call for the record of proceedings, look into them and be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing the impugned Defective Order dated 15.12.2023 and the incidental proceedings thereby validating the revised return submitted on 31.12.2022 as the valid return under Section 139 of the Act.”

6. Learned advocate Mr. Dhinal Shah for the petitioner submitted that on perusal of the impugned order dated 15th December 2023 passed under Section 139(9) of the Act, the return of income filed by the petitioner is declared invalid for non-compliance of the provisions of Section 44AB of the Act.

6.1. It was submitted that such an order is without giving any opportunity of hearing and it is without jurisdiction and therefore, the petitioner has preferred this petition under Article 227 of the Constitution of India.

6.2. Learned advocate Mr. Shah invited the attention of this Court to the audited profit and loss account for the year ended on 31st March 2022 appearing at page no.256 of the paper bo