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2016 (9) TMI 1050 - HC - Companies LawSanction of the scheme of amalgamation - Held that:- The scope of the Company Court sitting over an application for sanctioning of amalgamation on an application under Sections 391 and 304 of the Act of 1956 is supervisory in nature and limited to ensure that in the process there is no violation of any statutory rule or prejudice to public interest. From the affidavit submitted by the Regional Director and the report of the Official Liquidator, on notice being sent to them on second motion under Sections 391 and 394 of the Act of 1956, it is quite apparent that no ground for denying the scheme of amalgamation is made out in the present case. The issue of Income Tax Clearance, to my mind, is a matter which does not directly flow from the language of Section 391 of the Act of 1956. Income Tax liability is a matter distinct from manner of carrying out of business. Income tax liability would hold as per law both for the period prior to the sanction of the scheme and thereafter. Even otherwise under the circular dated 15-1-2014, non response to the Regional Director's letter is required to be considered as a presumption that the Income Tax Department has no objection to the action of the merger/ demerger as the case may be under Sections 391-394 of the act of 1956. Having examined the scheme of amalgamation, this court find nothing prejudicial to the interest of creditors, members of both transferor companies and the transferee company or to public interest. All required procedures had been followed.
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