' This is a writ petition calling in question some proceedings of the Income-tax Authorities. It has yet to come up in motion for admission.
2. Presently, the relief sought is to restrain the Inspecting Assistant Commissioner, Income-tax Range-I, Central Zone, Lahore, respondent No, 3, from re-opening assessment of the Petitioner Company for the assessm ent year 1982-83 and asking its former subsidiary namely, Messrs Ujala Cotton Mills Limited, to file their own return for the same year. The contention was that earlier these two companies had merged and that after merger the petitioner-Company had filed its return for the said year; that the same was examined by the Income-tax Officer, Central Circle VIII, Lahore, and had thereby become final for all purposes.
3. The grievance was that after the return was accepted by the said I.-T.O., the case could not have been transferred to respondent No, 3 and the latter could not possibly bypass the judgment of this Court, dated 19-1-1983, by which judgment the merger of the two companies was approved with retrospective effect, namely 30-6-1981. Counsel says that it was not open to respondent No, 3 to ignore the said judgment and ask the two companies to file either fresh or original returns, respectively.
4. I have gone through the judgment of my learned brother A.S. Salem, J., dated 19-1-1983 and find that the merger was approved from back date. It requires to be seen if the respondent could ignore it by citing certain authorities including some of foreign jurisdiction. Counsel tried. To distinguish those authorities from the facts of the present case. The respondents are restrained subject to notice till 15th November, 1983, from re-assessing the petitioner-Company for the year and to ask Messrs Ujala Cotton Mills Ltd., to file their return for the same year.
5. This order will lapse after the said terminal date if the same is not extended or otherwise confirmed.
' The writ petition to be put up in motion before said date.
[14-11-1983].--The writ petition itself was admitted last time. The sole question for which the case came up today was if there was justification for extending the order of status quo.
2. The two companies were merged by an order of this Court dated 19-1-1983 taking effect from a back date, viz. 30-6-1981. The merger was earlier accepted by the then Income-tax Officer but subsequently perhaps her succeeding incumbent re-opened it taking altogether a different view.
He thought that the merger did not take away the liabilities of Messrs Ujala Cotton Mills Limited of filing return for the assessm ent year 1982-83. According to him, the order of the High Court did not mean the transfer of liabilities to the succeeding company and ordered the re-opening of the assessm ent.
3. The learned Deputy Attorney-General as also counsel for respondents Nos. 2 and 3, contended that since Messrs Ujala Cotton Mills Limited existed as an assessee on 1-7-1981, they were under an obligation to file the return and pay tax, if due.
4. The fact that the predecessor I.-T.O. Had accepted the merger as ordered by the High Court, is in itself quite significant. It has to be seen if the succeeding officer could take entirely diametrically opposed view and re-open what may be termed as a closed transaction. Besides, subsection (2) of section 153-A of the Companies Act seems to be in point. It places premium on the orders of the High Court by virtue of which the properties as also the liabilities of the vanishing company shall pass on to the succeeding company. Apparently, the obligation to file the return or to pay income- tax appears to be a liability and hence will have passed on to the succeeding company as a result of the merger. Accordingly, status quo shall continue till further orders.
Writ admitted. Stay order issued.