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

A High Court order sanctioning the amalgamation of Tara Ltd into Neel Ltd was issued on 12 August 2026. Tara Ltd had already furnished its return for a tax year to which the order applies. Under section 314 of the Income-tax Act, 2025, by what date must the successor furnish the modified return?

The modified return is due by 28 February 2027. Section 314 allows six months from the end of the month in which the order was issued; the order was in August 2026, so the period starts on 31 August 2026 and ends on 28 February 2027.

  1. A28 February 2027Correct
  2. B31 January 2027
  3. C12 February 2027
  4. D31 December 2026

Explanation

The modified return is due within six months from the end of the month in which the order was issued. The order month is August 2026, ending 31 August 2026; six months later is 28 February 2027. Counting from 12 August would give 12 February 2027, which is wrong because the period runs from the month end.

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