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TMI Blog2020 (11) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... y Law Board - Notwithstanding the above, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this Tribunal will not come in the way of action being taken, albeit, in accordance with law, against the concerned persons, directors and officials of the petitioners. While approving the scheme as above, it is clarified 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, payment is due or required in accordance with law or in respect to any permission/compliance with any other requirement which may be specifically required under any law - Application allowed. - C. P. No. 99/CAA/2020 in C. A. No. 1156/CAA/2019 - - - Dated:- 9-7-2020 - R. Varadharajan (Judicial Member) And Anil Kumar (B.) (Technical Member) For the Applicants : Arvindh Pandian , Senior Advocate with Pawan Jhabakh For the Official Liquidator : B. Palani , Authorized Representative ORDER R. VARADHARAJAN (JUDICIAL MEMBER). - 1. The hearing of this petition has been conducted through video conferencing platform. 2. M/s. Az ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... safety stock of consumables, tools, stores, etc. (c) Increased operational efficiency on management and administration resulting in savings in fixed costs. (d) Consolidation of companies would strengthen the balance-sheet and key ratios considerably whereby the amalgamated entity will be better placed in terms of sourcing funds from market at competitive rates. (e) Reduction in various compliance requirements and related cost. (f) Better supervision and ease of doing business as these companies undertake job work only for one common customer. (g) Integration of synergies will be achieved as the business of the companies form part of different stages of the same supply chain. (h) Providing liquidity to shareholders. 5. In the second motion application filed by the petitioner-companies, this Tribunal vide order dated February 6, 2020 has directed the petitioner-companies to issue notice to the statutory/regulatory authorities, viz. (i) Regional Director (Southern Region), (ii) Registrar of Companies, Chennai, (iii) the Income-tax Department, (iv) Official liquidator and other sectoral regulators, who may govern the working of the respective companies, as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en stated that the transferee company would not be required to pay any further fee or stamp duty for the increase in the authorized capital and as such it is contrary to section 232(2)(i) of the Companies Act, 2013 which mandates the transferee company to pay the fees, if any, for the enhanced authorized capital subsequent to amalgamation. Under such circumstances, the RD has sought for a direction to the transferee company to comply with the above provision by making an application with the Registrar of Companies, Chennai for payment of the balance fee as applicable under the provisions of the Act and rules framed thereunder. 7.3. Apart from the above, the Regional Director has not made any objection to the Scheme. In reply to the said observation made by the RD, the petitioner-companies have filed an affidavit dated June 4, 2020 sworn by one Mr. S. Kesavan in the capacity as the director of the transferee company and has stated that the transferee company undertakes to comply with the requirements as specified in the report of the RD. 7.4. Official liquidator In relation to the official liquidator to whom the notice was issued in the first motion stage itself has filed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment In relation to the Department of Income-tax, upon notice being served, the Deputy Commissioner of Income-tax (in short DCIT ), vide notice dated February 28, 2020 intimated the transferor company No. 1 that an outstanding tax demand of ₹ 31,750 on account of interest payable for non-payment of dividend distribution tax (DDT) for the assessment year 2018-19 is appearing in their records and has requested for the payment of the same. Similarly, the Assistant Commissioner of Income-tax (in short ACIT ), vide their notice dated November 19, 2019 intimated transferor company No. 6 that a total outstanding of ₹ 1,95,000 for various assessment year is appearing in their records and has requested for the payment of the same. 7.7 In reply to the same, the petitioner-companies have filed an affidavit dated June 4, 2020 and stated in relation to the DCIT that transferor company No. 1 has paid the DDT within the stipulated time limit specified as per the provisions of the Income-tax Act, 1961 vide challan dated October 7, 2017 and submitted the relevant documents before the DCIT along with the relevant supporting documents and in respect to the same and in the cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right to recover the tax dues as determined by the Income-tax Appellate Tribunal or any other competent forum as the case may be, remains intact. 7.10. Further in Company petition C. A. A. No. 284/ND/2018 vide order dated November 12, 2018 the National Company Law Tribunal, New Delhi has made the following observations with regard to the right of the Income-tax Department in the scheme of amalgamation : . . . taking into consideration the clauses contained in the scheme in relation to liability to tax and also as insisted upon by the income-tax and in terms of the decision in Vodafone Essar Gujarat Ltd. v. DIT [2013] 176 Comp Cas 7 (Guj) ; [2013] 353 ITR 222 (Guj) and the same being also affirmed by the hon'ble Supreme Court and as reported in Department of Inocme-tax v. Vodafone Essar Gujarat Ltd. [2015] 190 Comp Cas 105 (SC) ; [2015] 373 ITR 525 (SC) ; [2016] 66 taxmann.com. 374 (SC) from which it is seen that at the time of declining the SLPs filed by the Revenue, however stating to the following effect vide its order dated April 15, 2015 that the Department is entitled to take out appropriate proceedings for recovery of any statutorily dues from the transferor or tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned senior counsel for the petitioner-companies have stated that the statutory auditors of the petitioner-companies have examined the Scheme and has certified that the petitioner-companies has complied with proviso to section 230(7)/section 232(3) and the accounting treatment contained in the proposed scheme of arrangement is in compliance with the applicable Indian Accounting Standards. The certificates issued by the statutory auditors certifying the accounting treatment of each petitioner companies are placed at pages 681 to 688 of the typed set filed along with the petition. 10. Observations of this Tribunal 10.1. After analyzing the scheme in detail, this Tribunal is of the considered view that the scheme as contemplated amongst the petitioner companies seems to be prima facie beneficial to the company and will not be in any way detrimental to the interest of the shareholders of the company. In view of absence of any other objections having been placed on record before this Tribunal and since all the requisite statutory compliances having been fulfilled, this Tribunal sanctions the scheme of arrangement appended as annexure A1 with the company petition as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d accordingly the same become the liabilities and duties of the transferee company. (vi) That the appointed date for the scheme shall be April 1, 2019 as specified in the scheme. (vii) That all proceedings now pending by or against transferor companies Nos. 1 to 6 be continued by or against the transferee company. (viii) That all the employees of transferor companies Nos. 1 to 6 in service on date immediately preceding the date on which the Scheme finally takes effect shall become the employees of the transferee company without any break or interruption in their service. (ix) That the transferee company do without further application allot to such members of the transferor company, as have not given such notice of dissent, as is required by clause 10.1 of Part C and clause 13.2 of Part D of the scheme herein the shares in the transferee company to which they are entitled under the said scheme. (x) That the transferee company shall file the revised memorandum and articles of association with the Registrar of Companies, Chennai and further make the requisite payments of the differential fee (if any) for the enhancement of authorized capital of the transferee company af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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