| Question And Answer | |
|---|---|
| Subject: | Refund procedure in case of demerger |
| Category: | Income-Tax |
| Querist: | TR Ramanathan |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | demerger, Refund |
| Date: | March 8, 2022 |
There is demerger of one undertaking (out of 3). Transferor co. paying Self assessment tax while filing pre-merger position return. Revised the return for post-merger position to be filed after receipt of NCLT order.
While filing revised return, there is going to be a refund in the transferor company and tax to be paid additionally for the transferee company. We want to make use of the tax paid earlier by the Transferor company, (relating to the demerger undertaking) for the Transferee company so that no need to pay tax once again nor refund is claimed.
What is the procedure to transfer Tax credit from one company to another. A department’s instruction is enclosed which is meant for officers to follow the procedure and procedure for the assessee is not clear.
It is a well settled position by the Hon’ble Supreme Court in the case of Dalmia Power Ltd. v. ACIT [2019] (2019) 112 taxmann.com 252/ (2020) 312 CTR 113/ 420 ITR 339 / 185 DTR 1 (SC) where it was held that where pursuant to scheme of amalgamation approved by NCLT, transferor companies had been succeeded by appellants/transferee companies after due date for filing revised return, Department was to consider revised returns filed beyond prescribed timeline after taking into account scheme of amalgamation as sanctioned by NCLT.
Therefore, the Assessee can file a revised return in light of the terms & conditions in the scheme of amalgamation.