A company amalgamated into another retains its previous year's assessment for tax purposes; re-assessment for amalgamation without new facts is impermissible.

1. The four appeals arise from the very same period spanning 27 months, due to the peculiar facts and circumstances of two companies having been amalgamated.

2. We would first notice the background facts arising in the above cases and would deal with the documents as produced in ITA No.108/2002. There were two Companies incorporated under the English Companies Act; M/s.Harrisons & Crossfield (I) Ltd. (HCL) and M/s.Malayalam Plantations (I) Ltd. (MPL). HCL was amalgamated with MPL w.e.f. 01/01/1983. The scheme of amalgamation, which had the approval of this Court, is produced as Annexure - D. While HCL was following the calendar year for the purpose of income tax assessment, MPL was following the financial year. Hence, when the two Companies got amalgamated, MPL applied for change of previous year relevant to the assessment year by Annexure - E and the change was permitted by Annexure - F. The application is seen filed by HCL itself. The 18 months comprised between 01/01/1983 and 30/06/1984 was, by Annexure - F, permitted to be the previous year of the assessment year 1985-86, since, 30/06/1984 was the date on which MPL closed its accounts. When the assessment was made for the assessment year 1985-86, the previous year had a total of 27 months from 01/01/1983 to 31/03/1985. The assessment is seen at Annexure - G.

3. A claim was made under S.80HHC of the Income Tax Act, 1961 ('Act', for brevity), which was allowed. Later, a rectification was made under S.154 by the Assessing Officer (AO), which is the subject of challenge in ITA No.102/2002. The rectification was on the premise that M/s.Harrisons Malayalam Limited, the new company formed, cannot be said to have a previous year to the previous year relevant for the assessment year 1985-86. In such circumstances, there could be no claim made under sub-Clause (b) of S.80HHC(1) of the Act, since there is no previous year to the relevant previous year. The rectification went on the premise that M/s.Harrisons Malayalam Limited is a new Company which does not have a previous year to claim benefit under sub-Clause (b) of S.80HHC(1) of the Act. S.154 order dated 12/02/1992, which went up in appeal and second appeal, eventually has reached this Court in ITA No.102/2002.

4. Subsequently, a re - assessment under S.147 was attempted by the AO by issuance of a notice under S.148. S.148 notice was issued on 30/03/1993, after the rectification under S.154. The notice under S.148 was issued on the premise that HCL did not have any assessment for the assessment years 1983-84 and 1984-85 and the AO had allowed the change of previous year and permitted closure of the books on 30/06/1983 without being aware of any amalgamation. The AO found that the income of HCL in the three years has to be assessed at the hands of M/s.Harrisons Malayalam Limited and hence, computed the income for the three separate assessment years of 1983-84, 1984-85 and 1985-86. The first year comprising of a previous year of three months and two other years comprising of a previous year of 12 months each. The assessee filed appeals from the orders under S.147, which was overturned by the Commissioner of Income Tax. The first appellate authority found that there can be no re - assessment under S.147, since the entire facts were within the knowledge of the AO, who also completed the assessment resorting to scrutiny under S.143(3) of the Act. The first appellate authority also found that the assessment completed for the year 1985-86 was comprised of a relevant previous year of 27 months. The first appellate authority was of the opinion that the re - assessment attempted to be made, would not come within the scope of S.147. The Tribunal upheld the order of the Commissioner (