Section 72A undertaking requirement in amalgamation schemes left open for fresh NCLT reconsideration.

An amalgamation scheme was rejected because no undertaking was initially included to satisfy the section 72A Income-tax Act conditions for retention of fixed assets, continuation of business, and carry forward of losses and unabsorbed depreciation. On appeal, the transferee company filed an undertaking stating that it would comply with those statutory conditions. The matter was left open for the National Company Law Tribunal to consider a fresh undertaking under section 72A and pass appropriate orders expeditiously in accordance with law.

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Issues: Whether the dismissal of the amalgamation application for want of an undertaking in compliance with section 72A of the Income-tax Act, 1961 was justified, and whether the scheme could be reconsidered on filing of a fresh undertaking before the National Company Law Tribunal.

Analysis: The scheme approval application had been rejected because no undertaking was initially incorporated in the scheme to satisfy the conditions attached to section 72A of the Income-tax Act, 1961 concerning retention of fixed assets, continuation of business, and compliance with the statutory conditions for carry forward and set off of losses and unabsorbed depreciation. During the appeal, the transferee company placed on record an undertaking stating that it would comply with those conditions. In that background, the appeal was disposed of with a direction that if a fresh undertaking in terms of section 72A is filed before the National Company Law Tribunal, the tribunal may consider it and pass appropriate orders expeditiously in accordance with law.

Conclusion: The original dismissal of the application was not found erroneous, but the matter was left open for reconsideration by the National Company Law Tribunal upon filing of a fresh undertaking.

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