ABC Ltd. was merged with XYZ Ltd. pursuant to an order of the High Court dated 10th August 2026. XYZ Ltd. had already filed its return of income for…

CA Final · Direct Tax Laws and International Taxation · RTP · January 2026
ABC Ltd. was merged with XYZ Ltd. pursuant to an order of the High Court dated 10th August 2026. XYZ Ltd. had already filed its return of income for A.Y. 2025-26 under section 139(1) before the date of the order. On the date of High Court order, the assessment for A.Y. 2025-26 was pending under section 143(3). Which of the following are the compliance obligations on the successor entity and what is the fate of pending assessment pursuant to merger: (i) The Assessing Officer will proceed to complete the assessment of A.Y. 2025-26, in line with the order of reorganisation and the modified return. (ii) XYZ Ltd. has to furnish a modified return, within six months from the end of August 2026. (iii) The pending assessment will abate on passing of High Court order. (iv) XYZ Ltd. has to furnish a modified return, within six months from the date of 10th August 2026. Choose the correct option:
(A) (i) & (iii)
(B) (i) & (iv)
(C) (i) & (ii)
(D) (ii) & (iii)

Suggested Answer and Working Notes:

Correct Answer: Option (C)

(i) & (ii)

Topics: Double Taxation Relief, Assessment Procedure, Non-Resident Taxation

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