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CMA Final · Direct Tax Laws and International Taxation · Assessment of Companies

A High Court order sanctioning an amalgamation applies to tax year 2025-26. Nilgiri Ltd, the predecessor, had furnished its return for that year before the order was issued in the month of August 2026. Within what time must the successor furnish a modified return under section 314 of the Income-tax Act, 2025?

The successor must furnish the modified return within six months from the end of the month in which the order was issued, so here six months from the end of August 2026. The period runs from month end, not from the date of the order.

  1. AWithin six months from the date of the order, being the day it was issued
  2. BWithin six months from the end of August 2026Correct
  3. CWithin three months from the end of August 2026
  4. DWithin one year from the end of the tax year 2026-27

Explanation

Section 314(1) requires the successor to furnish a modified return within six months from the end of the month in which the order was issued. The order was issued in August 2026, so the period runs from 31 August 2026. Counting from the actual date of the order is wrong because the period begins at month end.

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