Introduction:
It is observed from the recent judgments of National Company Law Tribunals (for brevity ‘NCLT’/’Tribunal’) that there is an ambiguity as to the extent the objections raised by Income Tax Department should be taken into consideration while the Tribunals sanction a scheme under the provisions of Section 230 – 232 of Companies Act (for brevity ‘Companies Act’).
Section 230(5) of Companies Act for instance stipulates that a notice with all the documents in the prescribed format has to be sent to the Central Government, the income tax authorities, the Reserve Bank of India, the Securities and Exchange Board of India, the Registrar of Companies, the respective stock exchanges, the official liquidator, the competition commission, if necessary, and such other sector regulators or authorities which are likely to be affected by the compromise or arrangement and shall require the representations to be made on the proposed scheme.
Read more: GAAR vis-à-vis Compromises or Arrangements under Companies Act