Supreme Court clarifies on assessment of amalgamated entities
By Raghavan Ramabadran, Krithika Jaganathan and Vishal Sundar M.V.
The article in this issue of Corporate Amicus examines the rationale and thrust of a recent Supreme Court decision in the case of Mahagun Realtors (P) Ltd., wherein the Apex Court has clarified that an amalgamation would not per se invalidate an assessment order issued in the name of the transferor company. Discussing the facts of the case, the authors elaborate on the findings of the Court that notice issued in name of amalgamated entity is not always fatal to the proceedings. The Supreme Court analyzed mergers as dealt with in the Income Tax Act, 1961 to conclude that, the corporate death of an entity on amalgamation per se cannot invalidate an assessment order. According to the authors, after the decision of the Supreme Court, whether the assessment notice will survive when issued to an amalgamated entity is subject to the terms of the amalgamation and the facts of each case...
Notifications and Circulars
- ECB limits revised by RBI/
- Companies (Accounts) Fourth Amendment Rules, 2022 notified
- Companies (Incorporation) Third Amendment Rules 2022 notified
- SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2022 notified
- Enhanced guidelines for debenture trustees and listed issuer companies on security creation and initial due diligence
Ratio decidendi
- Insolvency – Earnest Money towards purchase of land is not ‘financial debt’ – NCLAT, New Delhi
- Arbitration – Depriving right to counter-claim or set-off may lead to parallel proceedings before various fora and offend the very purpose of Section 23 – Supreme Court
- Insolvency – Section 7(5)(b) of IBC, which requires the Adjudicating Authority to notify Financial Creditor before rejection of a claim, can be extended to appeals as well – Supreme Court
News Nuggets
- Insolvency – Entries in books of account of a company can be treated as acknowledgement of liability in respect of debt payable to a financial creditor
- Industrial Disputes Act, 1947 – Jurisdiction of civil court when is not ousted
- Insolvency – Interest when can be included in calculation of threshold of INR 1 Crore for initiating CIRP process
- Insolvency – One-time Settlement proposal is acknowledgment of debt
- Arbitration – Mere use of word ‘arbitration’ will not make an arbitration agreement
- Arbitration – Courts when can under Section 11 adjudicate on arbitrability of disputes
- Arbitration order can be set aside in case of improper interpretation of certain clauses of agreement
