Bombay High Court’s Order in Case of CG Power And Industrial Solutions Ltd Vs Assistant Commissioner of IT

The Bombay High Court has made a significant ruling in the case of CG Power and Industrial Solutions Ltd vs. Assistant Commissioner of Income Tax, where it rejected the CBDT’s order and allowed the taxpayer to file amended returns based on the recast of accounts under NCLT’s order.

The High Court quashed the CBDT’s order, stating that any assessment order passed under section 143(3) or 144C, as well as resulting notices or orders for assessment years where re-casted accounts have been filed, will not stand. The Division Bench of Justice K.R. Shriram and Justice Dr. Neela Gokhale questioned the Income Tax Department’s objections to condoning the delay in filing income returns based on the re-casted accounts accepted by NCLT and filed with the RoC under MCA.

The case involved the resignation of legal auditors of the taxpayer before completing their term, leading to an inquiry under the Companies Act, 2013. The MCA conducted a detailed inspection of the books of account and records, which revealed unauthorized transactions. Subsequently, NCLT allowed the reopening and recasting of the taxpayer’s books of accounts and its subsidiaries for five years.

Despite the CBDT’s rejection of the taxpayer’s application for condonation of delay in filing revised returns, the High Court emphasized the need to acknowledge genuine hardship and allow authorities to do substantial justice. The Court also noted the strange stand taken by PCCIT regarding the acceptance of re-casted financial statements.

In conclusion, the High Court granted the taxpayer’s petition, directing the Revenue Department to allow the Assessee to file amended returns based on the re-cast of books of account and financial statements for the relevant assessment years. This ruling sets a precedent for similar cases and emphasizes the importance of ensuring justice in tax matters.

For more details on the case, refer to the following information:

– Case Title: CG Power And Industrial Solutions Ltd Vs. Assistant Commissioner of Income Tax
– Citation: WRIT PETITION (L) NO. 8766 OF 2024
– Date: 30.04.2024
– Petitioner: Mr. J.D. Mistri, Senior Advocate A/W Mr. Nitesh Joshi I/B Mr. Atul K. Jasani
– Respondents: Mr. Devang Vyas, Ld. ASG A/W Mr. Suresh Kumar, Mr. Sheelang Shah, Ms.Vaibhavi Chowdary, Mr. Jalaj Prakash
– Bombay High Court: Read Order