CBDT Directive to Income Tax Department/ CIT for Their Comments/ Objections on the Schemes of Amalgmations
Central Board of Direct Tax (CBDT) vide its letter dated April 11th, 2014 addressed to all Chief Commissioner of Income Tax, noted that, recently, schemes of amalgamation, were designed, with retrospective dates, seeking set off of losses of loss making company with the Profits of the profit making company of the Groups and hence adversely impacting the public revenue. It further reiterated that, since the Income Tax Department has not been delegated power to scrutinize the documents, hence, its intervention in the Scheme, were rejected by the High Court as it has no locus standi to oppose such scheme.