Law:

Section:

Section 222 of the Income-tax Act, 1961 read with section 153A of Companies Act, 1913 and section 647 of Companies Act, 1956 - Collection and Recovery of tax - Assessment year 1953-54 - Under a Scheme of arrangement for amalgamation there was absorption of Respondent No. 2 company into respondent No. 1 company Government had large claims of recovery of tax liability against Respondent No.2 - Whether absorption of transferor-company into transferee-company and consequential transfer of assets and liabilities of transferor company to that of transferee-company did not depend or could be said to be incomplete without discharge of such liability by transferee-company and liability of transferee company to pay creditors of transferor-company could not be a step in aid to amalgamation but would be a consequence of it - Held, yes - Whether a petition under section 153A(1)(f) of Companies Act, 1913 was maintainable in Court directing to provide for payment and discharge of aforesaid liability of respondent No. 2 by respondent No. 1 - Held, no FACTS Respondent No's. 1 and 2 companies belonged to the same group Respondent No. 2 was in voluntary liquidation. The Liquidator proposed a scheme of arrangement under section 153 of the companies Act 1913 for its amalgamation with respondent No. 1 and in statutory meeting of the members the scheme had been approved. The scheme was also sanctioned by the District Judge. By a subsequent order District Judge in exercise of powers conferred on it further directed that the whole property of the transferor-company , that is respondent No. 2, would stand transferred to and vest in the transferee-company, that is respondent No. 1, and that all the liabilities of the transferor-company would, by virtue of the said order, become the liabilities of the transferee-company. The Government had a large claim against respondent No. 2 on account of tax liability. The filed petition under section 153(1)(f) of the Companies Act, 1913 read with section 647 of the Companies Act, 1956, in the Court of the District Judge, praying an order "providing for payment and discharge of the said liability of respondent No. 2 by respondent No. 1 and/or by…

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