New IT Rule 12AD/ Form ITR-A for Return u/s 170A and Amendment in Form ITR-6: CBDT Income Tax Notification 110/2022

The CBDT notifies the Income-tax (31st Amendment) Rules, 2022, to insert a new IT Rule 12AD/ Form ITR-A regarding the filing of a Return of Income by a Successor Entity under Section 170A, effective 01/11/2022. In addition, the CBDT has made necessary changes to Form ITR-6.

A new Income Tax Return Form ITR-A has been introduced for “successor entities under business reorganisation” to furnish their modified return of income pursuant to Section 170A of the Income Tax Act of 1961.

It should be noted that the Finance Act 2022 added a new section 170A to the Income Tax Act 1961. This new section allows entities undergoing a specific type of business reorganisation to file modified income tax returns (ITRs) for the time period spanning from the date the order went into effect until the competent authority issues their final order.New IT Rule 12AD/ Form ITR-A for Return by Successor Entity u/s 170A and Amendment in Form ITR-6: CBDT Income Tax Notification 110/2022

CBDT Income Tax Notification 110/2022 dt. 19/09/2022: New IT Rule 12AD/ Form ITR-A for Return u/s 170A, Amendment in Form ITR-6

Text of new IT Rule 12AD: Return of income under section 170A

(1) The modified return of income to be furnished by a successor entity to a business reorganisation, as referred to in section 170A, for an assessment year, shall be in the Form ITR-A and verified in the manner specified therein.

(2) The return of income referred to in sub-rule (1) shall be furnished electronically under digital signature.

(3) If the assessment or reassessment proceedings for an assessment year relevant to a previous year to which the order of the business reorganisation applies have been completed or are pending on the date of furnishing of the modified return in accordance with the provisions of section 170A, the Assessing Officer shall, pass an order modifying the total income of the relevant assessment year determined in such assessment or reassessment, or proceed to complete the assessment or reassessment proceedings, as the case may be, in accordance with the order of the business reorganisation and the modified return so furnished.

(4) The Principal Director-General of Income-tax (Systems) or Director-General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the return in the manner specified in sub-rule (2).

3. In the principal rules, in Appendix-II,–

(I) in Form ITR-6, for every assessment year commencing on 01/04/2022 or any earlier assessment year, in the Part A-GEN, for entries of serial number (A19)(a)(i), the following shall be substituted, namely:- (Please refer above attachment for details)

(II) after the ITR – Ack, the following Form ITR-A (ITR under section 170A) shall be inserted, namely:–

New Income Tax Return Form ITR-A u/s 170A for successor entities:

Form ITR-A*
(For successor entities to furnish return of income under section 170A consequent to business  reorganisation)

(Please see rule 12AD of the Income-tax Rules, 1962)

* Please refer above attachment for detailed format of Form ITR-A.

Text of Section 170A of Income Tax Act, 1961: Effect of order of tribunal or court in respect of business reorganisation

Section 170A of the Income Tax Act, 1961 has been inserted by the Finance Act 2022 w.e.f. 01/04/2022, is as under:

“Notwithstanding anything to the contrary contained in section 139, in a case of business reorganisation, where prior to the date of order of a High Court or tribunal or an Adjudicating Authority as defined in clause (1) of section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), as the case may be, any return of income has been furnished by the successor under the provisions of section 139 for any assessment year relevant to the previous year to which such order applies, such successor shall furnish, within a period of six months from the end of the month in which the said order was issued, a modified return in such form and manner, as may be prescribed, in accordance with and limited to the said order.

Explanation.- In this section, the expressions-

(i) “business reorganisation” means the reorganisation of business involving the amalgamation or demerger or merger of business of one or more persons;

(ii) “successor” means all resulting companies in a business reorganisation, whether or not the company was in existence prior to such business reorganisation.”

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CBDT Extends Timeline for ITR Filing by Successor Companies u/s 170A

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