Date Provided in Scheme of Amalgamation is Effective Date: SC Dismisses SLP [Read Judgement]

While dismissing a Special Leave Petition (SLP), the Supreme Court reiterated that the date provided in the scheme of amalgamation is the effective date.

Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Gujarat at Ahmedabad in Tax Appeal No. 311/2019, the Revenue preferred the Special Leave Petition. The respondent in the matter is Intas Pharmaceuticals Ltd.

From the impugned judgment and order passed by the High Court, it appears that the High Court has heavily relied upon the earlier decision of the High Court in the case of IRM Limited v. Deputy Commissioner of Income Tax, which was rendered after following the decision of this Court in Marshall Sons & Co. (India) Ltd. vs. Income Tax Officer.

In Marshall Sons & Co. (India) Ltd. vs. Income Tax Officer, the Supreme Court was considering a challenge to the notices issued by the Income Tax Officer to the amalgamating company for the period after the appointed date of amalgamation. After examining the provisions of the Companies Act, 1956 the Supreme Court held that the notices issued by the Income Tax Officer were not warranted in law.

In Marshall Sons & Co. (India) Ltd. vs. Income Tax Officer, the Supreme Court held that “every scheme of amalgamation has to necessarily provide a date with effect from which the amalgamation/transfer shall take place. The court further observed that it is also open for a court to modify the appointed date as it thinks appropriate in the facts and circumstances of the case but in a case where the court does not do so, the date as specified in the scheme would be the date on which the amalgamation would take effect.”

The Court of Justice MR Shah and Justice CT Ravikumar observed that “N Venkataraman, ASG appearing on behalf of the Revenue is not in a position to point out any contrary decision of the Court taking a contrary view than the view taken in the case of Marshall Sons & Co. (India) Ltd. The impugned judgment and order passed by the High Court does not require any interference of this Court.”

To Read the full text of the Order CLICK HERE

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THE PRINCIPAL COMMISSIONER OF INCOME TAX vs INTAS PHARMACEUTICALS LTD. , 2023 TAXSCAN (SC) 161 , Mr. N Venkataraman,Mr. Arijit Prasad,Mr. Raj Bahadur Yadav , Mr. Tushar Hemani,Ms. Anushree Prashit Kapadia,Ms. Ruchi Krishna Chauhan