TaxTMI 
TaxTMI 
2020 (12) TMI 373
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....nale of the proposed company scheme as described in the present company petition are stated as under : (1) Both the applicant-companies are under the same management group. The management is of the opinion that the merger will lead to synergies of operations and more particularly the following benefits : (a) Both the companies are under the same management group and it would be advantageous to combine the activities and operations in a single company. The amalgamation will provide synergistic linkages besides economies in costs by combining the total business functions and the related activities and operations and thus contribute to the profitability of the amalgamated company. (b) It would be advantageous to combine the activities and operations of both the applicant-companies into a single company for leveraging financial and operational resources and for the benefit of lesser compliance issues. (c) The scheme of amalgamation will result in cost saving for both the applicant companies and is expected to result in administrative efficiency and higher profitability levels for the transferee company. 4. The petitioner-companie....
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....019, was duly served by the petitioner-companies on the Income-tax authorities on November 24, 2018, on the Registrar of Companies, Madhya Pradesh at Gwalior and the Official Liquidator at Indore on November 24, 2018 and the Regional Director, North Western Region on November 24, 2018 and an affidavit of service and publication dated December 12, 2018, confirming the same has been placed on record. 9. In response to the notice of the Company Application No. 67/NCLT/ AHM/2018 served upon the office of Regional Director, North Western Region, Ahmedabad, the Regional Director has filed a representation dated October 10, 2018. 10. The Regional Director's observation in its representation in respect of the scheme of amalgamation and reply of the applicant companies to the said observations are as follow : RD's observation (s) Petitioners Petitioners' reply to the said observation(s) A B 2 (e) That, the Regional Director submits that it is observed from the clause 3.4 of the scheme that the appointed date is proposed in the scheme as March 15, 2018 and the petitioner-companies have submitted the copies of the audited balance-sheet as at March 31, 2018 to this ....
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....come-tax Department. In response to the query raised at paragraph 2(f), the petitioner has duly replied in the said clarificatory affidavit that, regarding service of notice to IT department, the Registrar of Companies MP has informed the learned Regional Director that Income-tax search and survey proceedings under section 133A of the Income-tax Act, 1961 have been conducted upon the petitioner and its key officials and in response to the said observation it is submitted that, the notices under section 230(5) of the Companies Act, 2013 have been issued and served on the Commissioner of Income-tax, Ujjain on August 3, 2018 and subsequently a second notice dated October 18, 2018, issued and served by authorized representative of the petitioner-companies pursuant to this Tribunal's order dated October 12, 2018. The petitioner has duly produced on record the acknowledgement receipts and delivery report at annexure R6 collectively to the affidavit. It is also submitted that, the petitioner has duly explained and made submission at paragraph 30 regarding the Income-tax search and survey proceedings have been conducted which is duly disclosed to show the bona fides of the petitioner. ....
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.... of the Regional Director for submitting this report and represent the matter on behalf of the Central Government, i.e., this Directorate may kindly be paid by the applicant company(ies) to the Central Government. Therefore, this hon'ble National Company Law Tribunal may be pleased to direct the applicant-company(ies) to pay such amount of legal fees/cost to the Central Government which may be considered appropriate by this hon'ble National Company Law Tribunal. 12. That, the report of the office of the Registrar of Companies, Madhya Pradesh, Gwalior has been received vide his letter No. ROC-G/230-232/ STA/2018/6182 dated September 28, 2018 and as per the said report, there are no complaints against the petitioner-companies and also there is no complaint/representation against the scheme of amalgamation of the companies. A copy of the Registrar of Companies report is enclosed and marked as annexure A to the representation. A copy of company's reply received on September 14, 2018, is also enclosed without enclosures and marked as annexure B to the re-presentation. 13. That, the Regional Director has no other observations /submissions except stated hereinabove, a....
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....ror due to inadvertence in his report mentioned the above for the year ended on March 31, 2017 and there is no prejudice caused to any concerned parties and such inadvertence needs to be ignored. In this regard, the official liquidator is of the humble opinion that necessary direction may kindly be issued to the transferor company to clarify the observation and submit their reply with respect to the aforesaid transactions in the interest of justice as per law. 16 That, the official liquidator has received a complaint from Income-tax Department against the proposed scheme of amalgamation. It is pertinent to mention herein that on perusal of the documents submitted by the transferor company, it was observed that a search/survey proceedings under sections 132(1) and 133A of the Income-tax Act, 1961 was carried out in the premises of the aforesaid transferor company, In this regard, this office had issued a letter dated October 3, 2018 to the Income-tax Department, Bhopal, Indore and Ujjain with request to offer their comment/objection in the aforesaid matter of amalgamation. Further, this office had also sent an Email dated October 23, 2018 to the transfer....
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....ied out after the survey proceedings. The IT Department can open the assessment proceedings against the assessee pursuant to the survey under section 133A only upon serving a notice under section 143(3) to the assessee for relevant assessment years whereas it is submitted by the petitioner that in the present matter the petitioner/transferor company has not received any notice till date. It is also submitted that there is no block assessment under section 158BC of the Income-tax Act, 1961 against the petitioner/transferor as the block assessment can only be initiated by IT Department only in case of search and seizure operations conducted under section 132 of the Income-tax Act, 1961. The petitioner at paragraph 8 of the detailed affidavit as referred above, submitted that, the search and seizure proceedings under section 132 has been carried out by the Income-tax Department against the petitioner/transferee and block assessment thereafter for the assessment year 2012-13 to assessment year 2018-19 initiated by the Income-tax Department against the petitioner/transferee. Further it is submitted that, an assessment order for assessment year 2011-12 under section 147 read....
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....nted date at the same terms as if, such assets and liabilities are that of the petitioner/transferee and once the scheme is approved the same shall always be subjected to the assessment/reassessment proceedings against the petitioner/transferor as a successor entity for the period up to the appointed date of the amalgamation as if, it is the liability of the petitioner/transferee under the provisions of section 170 of the Income-tax Act, 1961 hence it is contended that, such proposition of law is not tenable and there is no loss to the revenue if the scheme is sanctioned. The liabilities of the transferor is not going to the diluted even remotely. Further the petitioner/transferor at paragraph 13 strongly contended that, there is no assessment proceedings initiated against the assessment order for the AY 2011-12 under section 147/143(3) dated December 23, 2018 has already been passed as on date against the petitioner/transferee, allowing sanction of the present scheme would neither be prejudicial to the interest of any statutory body nor there would be any loss to the revenue and the petitioner also undertaken to take full responsibility to co-operate and extend full support to the....
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....ck assessment for AY 2012-13 to 2018-19 is also contemplated by virtue of search/seizure operations of Income-tax Department, have adopted same modus operandi and had filed following three other applications for the amalgamation before this hon'ble Tribunal which are under consideration. Sl. No. Case No. Transferor Companies Transferee Companies 01 CAA 64/2018 (i) Famous Vanijya P. Ltd. Dwarkesh Finance Ltd. (ii) Flag Synthetics Ltd. (iii) Navyug Vyapaar P. Ltd. 02 CAA 65/2018 Swati Commercial Pvt. Ltd. Vyanktesh Securities Pvt. Ltd. 03 CAA 66/2018 (i) Puma Plastopack P. Ltd. Shree Packers (MP) P. Ltd. (ii) Narsing Corrugators P. Ltd. (iii) Shriji Corrugator (Mandideep) P. Ltd. In view of the above, the official liquidator is of the humble opinion that necessary direction may kindly be issued to the transferor and transferee companies to clarify the above complaint as raised by Income-tax Department and submit their clarification/explanation, as in the aforesaid companies several assessment proceedings are pending. Therefore, keeping in view of the objection of Income....
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....amation on its merits and further in compliance with statutory provisions. 20. In order to examine the reasonableness and bona fide of the proposed company scheme, we place reliance on various judicial precedents including the decision of the hon'ble Supreme Court in the matter of Miheer H. Mafatlal v. Mafatlal Industries Ltd. [1996] 87 Comp Cas 792 at 813, 814 (SC) ; AIR 1997 SC 506, which may summarised as under : Basics of court's, function, power and discretion : The Supreme Court conducted a vast survey of authorities both from the judicial side as well as from legal text side and presented a summary of the scope and ambit of the jurisdiction of the company court as it has become earmarked in terms of the following broad 4 contours (page 819 of 87 Comp Cas) : "1. The sanctioning court has to see to it that all the requisite statutory procedure for supporting such a scheme has been complied with and that the requisite meetings as contemplated by section 391(1)(a) of the 1956 Act have been held. 2. That the scheme put up for sanction of the court is backed up by the requisite majority vote as required by section 391(2) of the 1956 Act. ....
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....eme rather than its supervisory jurisdiction." 21. Further by following the above stated decision in Gujarat Ambuja Exports Ltd., In re [2004] 118 Comp Cas 265 (Guj), the hon'ble Gujarat High Court refused to interfere with the commercial wisdom of the share-holders, who approved the scheme. For the sake of convenience, the relevant paragraph, i. e., paragraph 23, is being reproduced hereinbelow (page 278 of 118 Comp Cas) : "I have carefully considered the submissions. In my opinion, the observations of the Central Government has no basis. Firstly, as the letter reads, this was not an objection by the Central Government and it is merely an observation. The scheme is approved almost unanimously in the meetings of the shareholders of a company. Such approved scheme itself provides that those shareholders who do not send letters stating their willingness to continue with their holding, are to have deemed to be agreeable for purchase of their shares. This is an arrangement between the company and the shareholders and as pointed out by the Supreme Court of India in the case of Miheer H. Mafatlal v. Mafatlal Industries Ltd. [1996] 87 Comp Cas 792 (SC) ; AIR 1997 SC 506 th....
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....ed below : The proposed company scheme of arrangement, which is produced to the present joint company petition, (i) While approving the scheme, we make clear that this order should not be construed as an order in any way granting exemption from payment of stamp duty, taxes or any other charges, if any, and payment in accordance with law. (ii) The whole of the property, rights and powers of transferor company be transferred without further act or deed to the transferee company and accordingly the same shall pursuant to section 232 of the Companies Act, 2013, be transferred to and vest in the transferee company for all the state and interest of the transferor company therein but subject never the less to all charges now affecting the same ; and (iii) All liabilities including taxes and charges, if any, and duties of the transferor company be transferred without further act or deed to the transferee company and accordingly the same shall pursuant to section 232 of the Companies Act, 2013, be transferred to and become the liabilities and duties of the transferee company without in any way obstructing compliance of depositing outstanding tax dues, if ....