INCOME TAX ACT, 1961

Section 72A r/w Rule 9C

Loss - Carry forward of brought forward losses of amalgamating company - Whether non-filing of requisite information in Form No. 62 for third assessment year after the date of merger is mandatory -

Question arose for consideration was whether non-filing of requisite information in Form No. 62 for the third assessment year after the date of merger could disentitle amalgamated company, i.e., assessee to the benefit of carry forward of brought forward losses of amalgamating company under section 72(A). Held: Section 72A read with rule 9C clearly stipulate that after merger, within four years, amalgamated company should achieve at least 50% of the installed capacity of production. The mark of 50% of installed capacity of production can be achieved at any point of time within four years after date of merger because exact date of crossing over the mark of 50% cannot be ascertainable and, therefore, requirement of filing of requisite information in Form No. 62 for the third assessment year can at best be said to only directory and not condition precedent and non-compliance thereof would not disentitle assessee to claim such carry forward of losses to be set off against profits of assessee company especially when there was no dispute to the fact of crossing of 50% of installed capacity of production in the fourth year.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2006-07

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