2020 (7) TMI 725 - HC - Income Tax

Maintainability of appeal - memo of appeal was filed in the name of the company which lost its identity after its merger - scheme duly sanctioned by the High Court under the provisions of the Companies Act - HELD THAT - By virtue of scheme of amalgamation all the existing and the future litigation of the transferor company will be transferred and continued in the name of transferee company viz., M/s.Accenture Services Private Limited with effect from 1st April 2012. This M/s. Accenture Services Private Limited has subsequently merged with the M/s. Accenture Solutions Private Limited. By virtue of this merger, all the litigations pursued against or by both M/s. Zenta Knowledge Services Private Limited and M/s.Accenture Services Private Limited shall automatically be transferred and will be continued in the name of transferee company viz., M/s. Accenture Solutions Private Limited. When such being the position, without considering the order of the High Court in the matter of amalgamation and the automatic transfer of litigations of transferor companies into transferee company, the Tribunal has simply rejected the appeal, on the ground that the appeal was filed in the name of non-existing person. We do not agree with the said finding of the Tribunal as the same is not legally sustainable. Therefore, we are inclined to set aside the order of the Tribunal dated 14 September 2016, with request to the Tribunal to decide the appeals of the assessee (M/s.Accenture Solutions Pvt. Ltd.,) and the Revenue and the cross appeal of the assessee, on merits and in accordance with law.

Summary

Issues:
Appeal rejection due to technical grounds - Validity of appeal filed in the name of a non-existent company post-merger.

Analysis:
The High Court addressed the grievance raised by the Assessee regarding the rejection of their appeal by the Tribunal on technical grounds. The Tribunal had dismissed the appeal as it was filed in the name of a company that ceased to exist after a merger. The High Court noted that the company in question had merged with another entity, and subsequently, the litigations were to be continued in the name of the transferee company. The Court emphasized that the Tribunal's decision to reject the appeal solely based on the name of the non-existent company was legally unsustainable.

The High Court highlighted the legal implications of the merger and the automatic transfer of litigations from the transferor company to the transferee company. It was pointed out that the Tribunal failed to consider the High Court's order regarding the amalgamation and the subsequent transfer of litigations. The Court disagreed with the Tribunal's finding and set aside its order dated 14 September 2016. The High Court directed the Tribunal to reconsider the appeals of the Assessee and the Revenue, along with the cross-appeal, on their merits and in accordance with the law.

In conclusion, the High Court disposed of the present appeal, emphasizing that both parties would have the opportunity to raise substantial questions of law under Section 260A of the Act after the Tribunal decides the appeals on their merits. The Court made it clear that the contentions of the parties were left open for consideration before the Tribunal. The judgment did not impose any costs on either party, concluding the matter with these observations.