ITR-A FORM FOR MODIFIED TAX RETURN FILING
The CBDT) has issued a notification announcing the use of Form ITR-A for the filing of revised returns by a successor entity in the event of a business reorganization.
The CBDT has also specified that, under Section 170A, the successor entity must file their income return using Rule 12AD and Form ITR-A.
These rules, known as the Income-tax (31st Amendment) Rules 2022, will become effective on November 1, 2022.
Applicability of Form ITR A:
“The modified return required to be filed by a successor entity in the event of a business reorganization, as outlined in Section 170A, must be filed using Form ITR-A and must be verified in the manner specified in the form.”
- A business reorganization refers to the restructuring of a business through amalgamation, demerger, or merger. For example, the demerger of the plantation business of Tata Coffee Limited into TCPL Beverages & Foods Limited would be considered a business reorganization.
- In a business reorganization, the successor is the resulting company or companies, regardless of whether they were previously in existence. In the given example, TCPL Beverages & Foods Limited is the successor, and Tata Coffee Limited is the predecessor.
Insertion of New Rule 12AD in the Income Tax Rules, 1962
- The modified return of income required to be filed by a successor entity in the event of a business reorganization, as outlined in Section 170A, must be filed using Form ITR-A and must be verified in the manner specified in the form.
- The return of income referred to in sub-rule (1) shall be furnished electronically under digital signature.
- The Assessing Officer must either modify the total income determined in the assessment or reassessment for that year to reflect the business reorganisation, or continue the assessment or reassessment proceedings in accordance with the modified return if an assessment or reassessment for an assessment year relevant to a prior year affected by a business reorganisation has already been completed or is in progress at the time the modified return required by Section 170A is filed.
- The establishment of protocols, formats, and standards for the secure capture and transmission of data related to the filing of returns as described in sub-rule (2), as well as the development and implementation of appropriate security, archival, and retrieval policies for these returns, are the responsibility of the Principal Director-General of Income-tax (Systems) or Director-General of Income-tax (Systems).