Section 170(2A)

Section 170(2A) — the law in short

What the courts have decided on section 170(2A), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Statutory position — s.170A as substituted from 1 April 2023: the successor's modified return within six months of the month of the order, in Form ITR-A under rule 12AD, and what the Assessing Officer must then do CBDT Circulars & InstructionsCuts both ways
  The NCLT has just sanctioned our merger, and it applies to two years for which returns were already filed and one of which is already assessed. How do I get those years re-done, how long have I got, and in what form?
  Section 170A, as substituted with effect from 1 April 2023, gives the successor a modified return. Where, before the date of an order of a High Court or tribunal or an Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016 in a business reorganisation, a return has been furnished under section 139 by an entity to which the order applies for an assessment year relevant to a previous year to which the order applies, the successor shall furnish a modified return within six months from the end of the month in which the order was issued, in the prescribed form and manner, in accordance with and limited to that order. Sub-section (2) then tells the Assessing Officer what to do: if the assessment or reassessment for that year is already complete when the modified return is filed, he passes an order modifying the total income already determined; if it is pending, he passes an order assessing or reassessing the total income in accordance with the reorganisation order and taking the modified return into account. Rule 12AD prescribes Form ITR-A, to be furnished electronically under digital signature.
• Statutory position — s.170(2A), in force from 1 April 2022: an assessment or proceeding made on the predecessor during the pendency of a succession is deemed to have been made on the successor CBDT Circulars & InstructionsCuts both ways
  Our merger was pending before the NCLT and the Assessing Officer went on assessing the transferor company. The scheme has now been sanctioned. Is that assessment void because it was made on a company that has since ceased to exist, or has something changed in the law?
  Something has changed, and the date matters. Sub-section (2A) was inserted in section 170 with effect from 1 April 2022 and provides that, notwithstanding sub-sections (1) and (2), where there is succession, an assessment or reassessment or any other proceedings made or initiated on the predecessor during the course of pendency of such succession shall be deemed to have been made or initiated on the successor. Its own Explanation defines 'pendency' as running from the date of filing of the application for the succession before the High Court or tribunal, or the date of admission of an application for corporate insolvency resolution by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016, and ending with the date on which the order of that High Court, tribunal or Adjudicating Authority is received by the Principal Commissioner or the Commissioner.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.