This compendium gathers and reorganises a body of Nepali court and tribunal decisions connected with Section 57 of the Income Tax Act, 2058 – the provision governing a change in control of an entity. Every case retained here is reproduced in full: each brief preserves the parties, material facts, legal issue, the arguments of both sides, the holding, the reasoning, the final outcome, the ratio decidendi, the exact quotation where available, its relationship to earlier authority, its significance, and its bilingual keywords, together with a direct hyperlink to the original court or government source.
Across these decisions a fairly coherent doctrine of Section 57 emerges, with a few live tensions. First, on the trigger: the courts treat a shift of fifty percent or more in beneficial ownership as a change in control, and they read the threshold broadly – reaching new share issuances that dilute existing holders (Pioneer Global; MAW Earthmovers), transfers on the death of a shareholder (Rajesh Hardwares), and even indirect transfers effected at the level of an offshore parent (Bottlers Nepal). The principal counter-current is on measurement: Gabiionet holds that the threshold is the net percentage of ownership actually shifted, not the sum of exits and entries – a limiting principle against mechanical aggregation.
Second, on consequences: a triggering event produces a deemed disposal of assets and liabilities and a split income year under Section 57(3) (Bhudev Trading; The Nepal Distilleries on merger goodwill). But the tribunals temper the deeming fiction – tax must be assessed on actual computed gains rather than on the fiction at large (Bhudev Trading), and procedural compliance is policed: interest under Section 118 requires the Section 95(7) notice (Brihaspati Vidhyalaya), and the Section 57(3) filing obligation is enforced by penalty rather than by inventing income where no disposal occurred (Summit Hotel).
Third, on validity: a Section 57 assessment rises and falls with the transaction beneath it. Where the underlying share transfer is void or judicially reversed, the change-in-control consequences collapse (Vishal Agarwal; Pooja International). Fourth, in the merger context, Section 57 must be read with Section 47 (neutral transfers), Section 53 (capitalisation of profit as a deemed distribution) and Section 20 (loss carry-forward) – the two CG Foods decisions and Jagadamba Wires mapping the boundary between continuity of losses and taxable distribution.
Chapter 1 – Triggering a Change in Control – Thresholds, Measurement, and Triggering Events
Rule of thumb: a change of fifty percent or more in the underlying ownership of an entity triggers Section 57, whatever the mechanism – direct share sale, fresh issuance, inheritance, or an indirect transfer at the offshore parent level. How the threshold is measured (net shift versus cumulative movement) is itself contested.
C1. Large Taxpayers Office v. Himalayan Spring Water Pvt. Ltd.
Supreme Court of Nepal, Joint Bench · 2024-09-01 · 072-RB-0449
View judgment (court / government source)
Parties: Appellant: Large Taxpayers Office; Respondent: Himalayan Spring Water Pvt. Ltd.
Material facts: Company registration passed to a Korean entity. Large sums were transferred from the purchaser to the personal accounts of directors. The tax office argued this was company income from asset disposal under Section 57.
Legal issue: Whether advance payments to shareholders for share sales can be characterized as company income under Section 57; whether assets were disposed of leading to taxable gain for the entity.
Taxpayer’s argument: Shareholders and companies are distinct. Funds were advances for personal share sales, not company assets. Section 57 requires change in control, but income belongs to shareholders.
Revenue / government argument: The company sold total assets and revalued land to evade tax. Direct transfer of funds to directors proves income was hidden from the company’s accounts.
Holding / decision: The Supreme Court upheld the Revenue Tribunal’s decision that income belonged to shareholders, not the company.
Reasoning: A company is a separate legal entity. Section 57 involves deemed disposal of assets when control changes, but the office failed to prove funds were from asset disposal rather than share sales.
Final outcome: Assessment reversed
Ratio decidendi: The legal personality of a company and shareholders are distinct. Share sale income cannot be assessed as company business income; Section 57 applies to asset market values at control change.
Quotation from the decision: Income from the sale of shares belongs to the shareholder; share-related transactions do not equate to company income under Section 57, 41, or 40.
Relationship to prior authority: Distinguishes between company asset disposal and shareholder share disposal.
Academic / practical significance: Clarifies limitations in “piercing the corporate veil” to attribute shareholder gains to the corporate entity under Section 57.
Keywords (नेपाली / English): नियन्त्रणमा परिवर्तन (Change in Control), दफा ५७ (Section 57), शेयर विक्री (Share Sale), कानूनी व्यक्तित्व (Legal Personality)
C2. Bottlers Nepal Ltd. vs. Large Taxpayers Office and Inland Revenue Department
Revenue Tribunal, Kathmandu (Lalitpur Bench) · 2080-11-22 · 080-RB-0092 (Decision No. 745)
View judgment (court / government source)
Parties: Appellant: Bottlers Nepal Ltd. (represented by Pratima Verma); Respondents: Large Taxpayers Office, Hariharbhawan, Lalitpur and Inland Revenue Department, Kathmandu
Material facts: The Dubai-based Coca-Cola Sabco (Asia) Ltd, which held a 76.16% stake in Bottlers Nepal Ltd, saw its 100% shareholding transferred from Coca-Cola Sabco (Pty) Ltd (South Africa) to European Refreshment (Ireland) in October 2014. The tax authority argued this constituted a 50% or more change in control under Section 57, requiring separate tax filings for the pre- and post-transfer periods and deemed disposal of assets. The tax office performed a reassessment using Discounted Cash Flow (DCF) methods.
Legal issue: Whether an indirect change in shareholding at the parent company level (offshore indirect transaction) triggers the change in control provisions under Section 57 of the Income Tax Act, 2058, leading to a deemed disposal of assets and liabilities.
Taxpayer’s argument: The transaction happened between two foreign entities outside Nepal; there was no change in the shareholding structure of the resident entity itself. Section 57 does not explicitly include ‘intrinsic’ or ‘indirect’ ownership. The Ncell case logic should not apply as there were no intermediary shell companies. The valuation used by the tax authority was based on a flawed expert report that did not reflect actual market value.
Revenue / government argument: Bottlers Nepal Ltd is a ‘permanent establishment’ and a resident entity. The transfer of the parent company effectively transferred control over the Nepali entity’s assets and licenses. This is an offshore indirect transaction that resulted in a change of more than 50% ownership within 3 years. The failure to report this constituted fraud, justifying assessment outside the 4-year limit under Section 101(4).
Holding / decision: The Tribunal upheld that Section 57 was triggered. It ruled that ‘ownership’ includes both direct and indirect/intrinsic ownership. The transfer at the parent level resulted in the Irish entity gaining control over the assets and profits of Bottlers Nepal Ltd. Therefore, a deemed disposal under Section 41 (in conjunction with Sections 57 and 40) occurred.
Reasoning: Citing Supreme Court precedents (including the Ncell case), the Tribunal reasoned that indirect ownership transfers resulting in control shifts are taxable in Nepal. It justified the use of expert valuators under Section 132 because the taxpayer failed to provide a market value report for the date of transfer. Regarding penalties, the Tribunal adjusted the penalty under Section 120 from clause (b) 100% for intent to clause (a) 50% for error because the original decision text was inconsistent with the final tax notice.
Final outcome: Assessment upheld (Section 57 trigger and asset disposal logic), but partially allowed regarding penalties (reduced from 100% to 50% under Section 120).
Ratio decidendi: A change in control at the offshore parent company level of a Nepali resident entity constitutes a change in control under Section 57, triggering a deemed disposal of the resident entity’s assets and liabilities at market value.
Quotation from the decision: The legal arrangements of these legal systems, when interpreted collectively, mean that even if share transactions are made outside the country, they involve an indirect transaction of the resident entity’s assets (offshore indirect transaction), resulting in the disposal of intrinsic assets and liability for tax in Nepal.
Relationship to prior authority: Follows the legal principles established by the Supreme Court in the Ncell case (Writ No. 074-WO-0475).
Academic / practical significance: This case solidifies the application of Section 57 to offshore indirect transfers in Nepal’s tax jurisprudence beyond the telecommunications sector, specifically for multinational corporations.
Keywords (नेपाली / English): Section 57, Change in Control, Deemed Disposal, निहित स्वामित्व (Intrinsic Ownership), स्वामित्व परिवर्तन (Change in Ownership), बोटलर्स नेपाल (Bottlers Nepal)
C3. Rajesh Hardwares Pvt. Ltd. vs. Large Taxpayers Office and Inland Revenue Department
Revenue Tribunal Kathmandu · 2081/05/16 (B.S.) · 079-RB-0008, Decision No. 46
View judgment (court / government source)
Parties: Appellant: Rajesh Hardwares Pvt. Ltd. (Director Gopal Agrawal); Respondents: Large Taxpayers Office Lalitpur, Inland Revenue Department Kathmandu
Material facts: The company’s sole shareholder, Sanwarmal Agrawal, died on 2074/05/17. His shares (100%) were transferred to his son, Gopal Agrawal, on 2074/05/30. The tax authority invoked Section 57 of the Income Tax Act, claiming a change in control, and assessed capital gains by deeming a disposal of assets (land and shares).
Legal issue: Whether Section 57 of the Income Tax Act, 2058 is attracted in the case of share transfer resulting from the death of a natural person (inheritance/succession).
Taxpayer’s argument: Section 57 does not apply to share transfers caused by death. Such transfers are governed by Section 44 of the Act. Transfer between family members (father to son) should not trigger deemed disposal or taxes, as there is no actual sale or profit.
Revenue / government argument: If ownership changes by 50% or more within three years compared to the ownership three years prior, the entity is deemed to have disposed of its assets and liabilities under Section 57. The method of transfer (including death) is not specified as an exception in the law.
Holding / decision: Section 57 is attracted even when share ownership changes due to the death of a shareholder and subsequent transfer to an heir. However, since the transfer happened due to death and no actual consideration was received, capital gains tax is not applicable, but the deemed disposal for asset revaluation under Section 57 stands.
Reasoning: Section 57(1) applies when there is a change in ownership of 50% or more by any means. While shares are personal property, the company is a legal entity, and the law does not exempt inheritance from the calculation of ownership change. However, since it wasn’t a intentional tax-evading scheme, the 50% penalty under Section 120(a) was overturned.
Final outcome: Partially Allowed: The application of Section 57 was upheld regarding asset revaluation, but the penalty under Section 120(a) and interest under Sections 118/119 related to the Section 57 assessment were reversed.
Ratio decidendi: Deceased shareholder’s transfer to an heir counts towards the 50% threshold in Section 57 as it constitutes a change in the ‘control’ of the legal entity, regardless of the involuntary nature of the transfer.
Quotation from the decision: The process of share transfer is governed by special laws (Company Act) and since the company is a private limited entity, any change of 50% or more in ownership within three years, by whatever method, attracts Section 57.
Relationship to prior authority: n/a
Academic / practical significance: Clarifies the scope of ‘Change in Control’ provisions in the context of involuntary transfers (death/succession).
Keywords (नेपाली / English): Section 57 (दफा ५७), Change in Control (नियन्त्रणमा परिवर्तन), Deemed Disposal (निःसर्ग), Inheritance (अपुताली)
C4. Pioneer Global Pvt. Ltd. vs. Inland Revenue Office New Road and Inland Revenue Department
Revenue Tribunal Kathmandu · 2080/11/01 (B.S.) · 079-RB-0134, Decision No. 634
View judgment (court / government source)
Parties: Appellant: Pioneer Global Pvt. Ltd. (Chairman Pulkit Bhimsaria); Respondents: IRO New Road, Inland Revenue Department
Material facts: The company increased its capital and sold 100,000 shares to Apex Retail Holding Pvt. Ltd. on 2076/04/05. This resulted in the new entity holding 50% of the total shares. The tax office determined this was a change in control under Section 57 and assessed tax on the ‘Reserve and Surplus’ as deemed gain.
Legal issue: Whether a capital increase leading to a 50% shareholding by a new party constitutes a change in control under Section 57 and if ‘Reserve and Surplus’ can be taxed as deemed gain.
Taxpayer’s argument: The change was due to capital increase, not a direct sale between shareholders. Therefore, Section 57 should not be attracted. No actual profit was received by the company.
Revenue / government argument: The ownership structure changed by 50% compared to three years prior. Under Section 57(1), the entity is deemed to have disposed of its assets. The gains are calculated based on the market value (including reserves) at the time of change.
Holding / decision: The decision to apply Section 57 was upheld. The 100% penalty under Section 120(b) was also upheld due to the failure of the taxpayer to file separate tax returns for the periods before and after the control change as required by Section 57(3).
Reasoning: Section 57(1) clearly states that a 50% change in ownership within three years triggers deemed disposal. Since the new company acquired 50%, the threshold was met. Section 57(3) mandates treating the parts of the year before and after the change as separate income years, which the taxpayer failed to do.
Final outcome: Assessment Upheld
Ratio decidendi: A 50% shift in ownership, even via new share issuance, triggers Section 57. Failure to report this and file separate returns per Section 57(3) is treated as a deliberate concealment (fraudulent) attracting Section 120(b) penalties.
Quotation from the decision: The company sold shares to Apex Retail Holding, resulting in a 50% change in ownership; thus, Section 57(1) is attracted.
Relationship to prior authority: n/a
Academic / practical significance: Highlights the mandatory compliance of filing split-year returns under Section 57(3) upon a change in control.
Keywords (नेपाली / English): Section 57 (दफा ५७), Change in Control (नियन्त्रणमा परिवर्तन), Separate Income Year (छुट्टाछुट्टै आय वर्ष), Section 120(b) Penalty
C5. MAW Earthmovers Pvt. Ltd. vs. Large Taxpayers Office and Inland Revenue Department
Revenue Tribunal Kathmandu · 2080/03/12 (BS) · 077-RB-0165
View judgment (court / government source)
Parties: MAW Earthmovers Pvt. Ltd. (Appellant) vs. Large Taxpayers Office, Lalitpur and Inland Revenue Department (Respondent)
Material facts: The taxpayer increased its share capital from 35 million to 100 million. 650,000 new shares were issued to MAW Enterprises Pvt. Ltd. The tax office claimed this constituted a change in control over 50% under Section 57, treating it as a disposal of assets and liabilities resulting in a profit of NPR 2,505,524.
Legal issue: Whether a change in the shareholding structure exceeding 50% due to new share issuance to a related entity (MAW Enterprises) triggers the deemed disposal of assets and liabilities under Section 57 of the Income Tax Act 2058.
Taxpayer’s argument: The taxpayer argued that the ultimate ownership remains with Vishnu Kumar Agarwal (who holds 24% of MAW Enterprises), and thus the effective change in ownership is only 49.4%, which is less than the 50% threshold required for Section 57.
Revenue / government argument: The tax authority argued that MAW Earthmovers and MAW Enterprises are separate legal entities. Since 65% of shares are now held by a different entity (MAW Enterprises) compared to three years ago, Section 57 is legally attracted.
Holding / decision: The Tribunal upheld the tax authority’s decision regarding the application of Section 57.
Reasoning: The Tribunal reasoned that the two companies are distinct legal entities with separate Tax IDs (PAN). Since 65% of the shares were transferred/issued to a new entity, the statutory threshold of 50% change in control was met, regardless of the individual owners behind the holding company.
Final outcome: Assessment upheld (specifically for the Section 57 issue; other parts of the case regarding mismatch were remanded).
Ratio decidendi: The 50% change in control under Section 57 is measured by the immediate ownership of the entity. Holding companies and their subsidiaries are treated as distinct entities for the purpose of calculating ownership shift.
Quotation from the decision: n/a
Relationship to prior authority: Follows the general strict interpretation of Section 57 regarding legal entity ownership.
Academic / practical significance: Clarifies that ‘indirect ownership’ or ‘piercing the corporate veil’ is not typically applied by the tax administration when calculating the 50% threshold under Section 57 if the new owner is a separate registered company.
Keywords (नेपाली / English): Section 57 (दफा ५७), Change in Control (स्वामित्वमा परिवर्तन), Deemed Disposal (निसर्ग भएको मानिने), MAW Earthmovers.
C6. Gabiionet Environment Solution Pvt. Ltd. vs. Medium Level Taxpayers Office and Inland Revenue Department
Revenue Tribunal Kathmandu · 2080/11/10 · 079-RB-0306
View judgment (court / government source)
Parties: Gabiionet Environment Solution Pvt. Ltd. (Appellant) vs. Medium Level Taxpayers Office, Babarmahal and Inland Revenue Department (Respondents)
Material facts: The taxpayer company’s share ownership changed during the fiscal year. The tax authority (LTPO) concluded that ownership changed by 68% (34% decrease by old members and 34% increase by a new member), exceeding the 50% limit set in Section 57 of the Income Tax Act. Consequently, the authority disallowed the carry-forward of business losses amounting to Rs. 11,94,191.26.
Legal issue: Whether a cumulative calculation of share decreases and increases (34% + 34% = 68%) is legally valid under Section 57 to determine a ‘change in control’, and whether the disallowance of loss carry-forward was justified.
Taxpayer’s argument: The taxpayer argued that the total change in ownership was only 34%, as the 34% acquired by the new member was the same 34% relinquished by the old members. Therefore, since the change was below 50%, Section 57 should not apply and losses should be deductible.
Revenue / government argument: The authority maintained that a 34% reduction and a 34% addition constituted a 68% overall change in the ownership structure, triggering Section 57 restrictions.
Holding / decision: The Tribunal ruled in favor of the taxpayer. It held that the calculation of 68% was incorrect and that the actual change was only 34%.
Reasoning: The Tribunal observed that Section 57 is triggered when there is a change of 50% or more in ownership compared to the preceding three years. In this case, since one party sold 34% and another bought that same 34%, the net change in the underlying control of the entity is 34%, not a cumulative 68%. The tax authority’s logic of adding both exit and entry percentages was flawed.
Final outcome: Reversed/Remanded (The initial decision regarding Section 57 was overturned; the file was sent back to the tax office for reassessment based on the 34% change finding).
Ratio decidendi: For the purpose of Section 57, a change in control is measured by the net percentage of ownership shifted, not by summing the exit percentage and the entry percentage separately. Ownership changes must be verified against actual share records from the Office of the Company Registrar.
Quotation from the decision: The authority’s conclusion that a 68% change occurred when 34% decreased and 34% was added was not based on facts… the decision to disallow loss carry-forward under Section 57 is not found to be based on facts and is thus reversed.
Relationship to prior authority: n/a
Academic / practical significance: Clarifies the methodology for calculating the 50% ownership threshold under Section 57, preventing double-counting of the same transferred shares.
Keywords (नेपाली / English): Section 57 (दफा ५७), Change in Control (स्वामित्व परिवर्तन), Business Loss (व्यवसायको नोक्सानी), Share Ownership (शेयर स्वामित्व)
Chapter 2 – Consequences of a Control Change – Deemed Disposal, Capital Gains, and Separate Income Years (Section 57(3))
Rule of thumb: once triggered, Section 57 deems a disposal of the entity’s assets and liabilities and splits the income year in two under Section 57(3); but the tax payable must rest on actual computed gains and on compliant procedure, not on the deeming fiction alone.
C7. Bhudev Trading vs. Large Taxpayers Office and others (Income Tax)
Revenue Tribunal, Kathmandu Bench · 2079/04/22 · 075-RB-0245 (Internal Registration: 912)
View judgment (court / government source)
Parties: Appellant: Ravi Golchha on behalf of Bhudev Trading vs. Respondent: Large Taxpayers Office, Lalitpur and others
Material facts: The taxpayer company underwent a 60% change in share ownership during the fiscal year 2070/071. The Large Taxpayers Office (LTO) applied Section 57 of the Income Tax Act, treated the assets/liabilities as disposed of, and calculated a net profit based on a Net Worth Calculation Sheet, adding Rs. 10,07,524.08 to the income. The LTO also treated the pre-change and post-change periods as separate income years under Section 57(3).
Legal issue: Whether the LTO correctly applied Section 57 and Section 7(2) regarding change in control to determine capital gains and separate income years, and whether the resulting tax assessment was lawful.
Taxpayer’s argument: The taxpayer argued that share ownership change doesn’t automatically change purchase/sales/income figures; the LTO incorrectly used a Net Worth Calculation Sheet to estimate market value and deemed profit in a family transfer where no actual gain above face value was shown. They also challenged the procedural validity of issuing two different assessments based on a single decision.
Revenue / government argument: The authority maintained that per Section 57(1), a 50% or more ownership change triggers a deemed disposal of assets and liabilities. They argued that because of this change, Section 57(3) requires the fiscal year to be split into two separate years for tax purposes, and the calculated net profit from the deemed disposal must be included in income.
Holding / decision: The Tribunal held that while share ownership changed by 60%, the tax authority failed to accurately calculate actual income/gain resulting from the disposal of assets or liabilities under Section 57. The decision lacked proper evaluation of the actual gain according to established Supreme Court precedents.
Reasoning: Citing Supreme Court precedents (N.K.P 2076, Vol 1, No 10163), the Tribunal reasoned that income tax should only be levied on actual income/gains. The LTO’s use of Section 7(2) without confirming the actual gain from the deemed disposal under Section 57 was legally flawed. The split of the income year under Section 57(3) was noted but the underlying profit calculation was not substantiated with evidence.
Final outcome: Remanded (Decision reversed and sent back for re-assessment).
Ratio decidendi: Under Section 57, an ownership change of 50% or more requires a deemed disposal, but the resulting tax must be based on actual calculated gains/income from that disposal, not just hypothetical values. Fiscal years must be treated separately as per Section 57(3) once control changes.
Quotation from the decision: Income tax is only to be levied when there is income, and determining tax without confirming that income occurred or was proven is against legal principles.
Relationship to prior authority: Follows Supreme Court precedents: Dwarika Nath Dhungel vs Nepal Government (N.K.P. 2076, No. 10163) and Navaraj Bhandari vs Himal Hydro (N.K.P. 2067, No. 8485).
Academic / practical significance: This case clarifies the application of Section 57 (Change in Control) in Nepal, emphasizing that deemed disposal must result in ‘actual’ proven profit to be taxable under Section 7, and defines the split-year treatment required under Section 57(3).
Keywords (नेपाली / English): Section 57 (दफा ५७), Ownership Change (स्वामित्व परिवर्तन), Deemed Disposal (निःसर्ग), Income Year (आय वर्ष), Net Worth (नेटवर्थ)
C8. Summit Hotel Pvt. Ltd. v. Large Taxpayers Office, Lalitpur
Revenue Tribunal Kathmandu, Pulchowk Lalitpur Bench · 2082/08/21 · 081-RB-0179, Decision No. 71
View judgment (court / government source)
Parties: Appellant: Subarna Krishna Shrestha for Summit Hotel Pvt. Ltd. v. Respondent: Inland Revenue Office, Lalitpur
Material facts: The ownership of Summit Hotel changed on 2069/07/02. The tax authority deemed this a change in control under Section 57 of the Income Tax Act 2058. Consequently, they demanded an income return for the period 2069/04/01 to 2069/07/02 within 3 months, which the taxpayer failed to provide. The authority then conducted a revised tax assessment (revaluation of land at market price) and imposed capital gains tax and penalties.
Legal issue: Whether a change in control under Section 57 justifies treating unrealized gains on assets (land) as taxable income under Section 7(2) when no actual disposal occurred, and whether the assessment was within the statute of limitations.
Taxpayer’s argument: Section 57 is for the purpose of restricting tax benefits (loss carry-forwards, depreciation) rather than creating actual taxable income. Sections 5, 6, and 7 limit taxable income to actual gains. The ‘deemed disposal’ is for administrative purposes, and since the company received no payment, no capital gains tax should apply. Furthermore, capital gains tax was already paid by the sellers at the time of share transfer.
Revenue / government argument: As ownership changed by more than 50%, it constitutes a change in control under Section 57. The taxpayer failed to file the required return within 3 months per Section 57(3). Therefore, assets are deemed disposed of at market value, and the gain is taxable under Section 7(2)(c).
Holding / decision: The decision to tax unrealized capital gains on land based solely on a Section 57 change in control was reversed. However, a fine was upheld for failing to file the required notice.
Reasoning: The court found that the share transfer process involved valuation and actual capital gains tax was already paid by the sellers. Filing a Section 57(3) notice is a procedural requirement. Failure to file it allows for penalties under Section 128 (Rs. 5,000 to Rs. 30,000) but does not automatically justify taxing unrealized market value gains as income when actual tax on the share sale was already settled.
Final outcome: Assessment reversed; Penalty of Rs. 20,000 imposed under Section 128 for non-compliance with filing requirements.
Ratio decidendi: Non-compliance with the procedural requirement to file a notice under Section 57(3) of the Income Tax Act 2058 warrants a penalty under Section 128, but does not inherently create a new taxable income from deemed asset disposal if the capital gains on the transaction itself (share sale) have already been accounted for.
Quotation from the decision: The company’s land was evaluated at government market rates and taxed as capital gains solely because the taxpayer did not file the return per Section 57(3)… this does not legally align. (translated)
Relationship to prior authority: Follows the principles of procedural fairness and proportional penalty for non-filing.
Academic / practical significance: Clarifies the distinction between procedural non-compliance under Section 57 and the substantive creation of taxable income via deemed disposal.
Keywords (नेपाली / English): Section 57 (दफा ५७), Change in Control (नियन्त्रणमा परिवर्तन), Capital Gains (पुँजीगत लाभ), Deemed Disposal (मानिएको निसर्ग)
C9. The Nepal Distilleries Pvt. Ltd. vs Large Taxpayers Office, Lalitpur et al.
Revenue Tribunal Kathmandu Bench · 2082/09/06 · 081-RB-0015 (Decision No. 88)
View judgment (court / government source)
Parties: The Nepal Distilleries Pvt. Ltd. (Appellant) vs Large Taxpayers Office & Inland Revenue Department (Respondents)
Material facts: During FY 2074/75, the appellant merged with Pashupati Planners Pvt. Ltd. The merger resulted in a change of ownership of more than 50%. The tax office treated the ‘Acquired Goodwill’ amounting to Rs. 65,28,30,089.98 as a taxable gain due to the change in control.
Legal issue: Whether the recognition of ‘Acquired Goodwill’ during a merger resulting in a 50% change in control constitutes a taxable profit/gain under Section 7(2) and Section 57 of the Income Tax Act.
Taxpayer’s argument: Goodwill is a capital nature asset. Income should be recognized through amortization and revenue generation, not at the point of acquisition. The tax has already been paid on revenue generated from the goodwill.
Revenue / government argument: Under Section 57, a change of more than 50% ownership means the company has disposed of its assets and liabilities. The goodwill recognized in the accounts represents a gain from the disposal/acquisition process and must be included in profit and loss per Section 7(2)(c).
Holding / decision: The Tribunal upheld the tax office’s decision, confirming that the gain from the disposal of assets/liabilities (including goodwill) triggered by Section 57 is taxable.
Reasoning: Section 57 explicitly states that if ownership changes by more than 50%, the entity is deemed to have disposed of its assets and liabilities. The ‘Acquired Goodwill’ was disclosed in the financial notes as a gain. Attempting to amortize it over 10 years to avoid immediate tax is not legal.
Final outcome: Assessment Upheld (Regarding the Section 57/Goodwill issue).
Ratio decidendi: A change in control exceeding 50% (Section 57) results in a deemed disposal of assets and liabilities; any resulting gain or surplus (like goodwill) is taxable income under Section 7(2)(c).
Quotation from the decision: Any company’s ownership change of more than 50% leads to a deemed disposal of its assets or liabilities as per Section 57 of the Income Tax Act, 2058.
Relationship to prior authority: n/a
Academic / practical significance: Provides a significant precedent on the immediate taxability of goodwill arising from mergers and acquisitions under the ‘Change in Control’ provisions of Section 57.
Keywords (नेपाली / English): आयकर (Income Tax), दफा ५७ (Section 57), ख्याति (Goodwill), गाभिने (Merger), स्वामित्व परिवर्तन (Change in ownership)
C10. Brihaspati Vidhyalaya Byabasthapan Private Limited vs. Large Taxpayers Office and Inland Revenue Department
Revenue Tribunal Kathmandu, Bench at Pulchowk, Lalitpur · 2080-09-17 (2024-01-02) · 078-RB-0109 / Decision No. 339 (2080/81)
View judgment (court / government source)
Parties: Appellant: Rohit Shrestha (Finance Head, Brihaspati Vidhyalaya Byabasthapan Pvt. Ltd.) vs. Respondents: Internal Revenue Office Putalisadak, Inland Revenue Department
Material facts: The company underwent a change in control where more than 50% of the share ownership changed on 2074-03-02. Pursuant to Section 57 of the Income Tax Act, the taxpayer filed a separate tax return for the period 2073-04-01 to 2074-03-06. The tax authority assessed additional interest under Section 118 for underpayment of installment tax on deemed disposal gains.
Legal issue: Whether interest under Section 118 and Section 94 (Installment Tax) is applicable to gains arising from a deemed disposal of assets and liabilities due to a change in control under Section 57, especially when the gain is incidental and realized toward the end of the period.
Taxpayer’s argument: Incidental non-business gains arising from Section 57 do not attract installment tax under Section 94 or interest under Section 118. The first two installments were paid based on estimated income, and the gain from ownership change was not foreseeable at that time.
Revenue / government argument: Section 94 does not exempt companies undergoing ownership change from installment tax obligations. The income is part of the assessable income for the year, and since the tax paid was less than 90% of the assessed amount, interest under Section 118 is mandatory.
Holding / decision: Decision reversed and remanded.
Reasoning: The tax authority failed to follow the mandatory procedure under Section 101(6) and Section 95(7). The taxpayer was not given a prior written notice or an opportunity to defend against the specific imposition of interest under Section 118. Deemed disposal under Section 57 is an incidental gain, and the authority must evaluate if the criteria for Section 94 were realistically met before applying penalties.
Final outcome: Remanded for re-decision.
Ratio decidendi: Imposition of interest under Section 118 requires a specific notice under Section 95(7) to comply with natural justice. Deemed gains under Section 57 must be analyzed logically within the framework of estimated installment tax.
Quotation from the decision: Ownership in the company was transferred … Section 57 of the Income Tax Act was attracted … The tax administration failed to provide the opportunity for defense regarding Section 118 interest.
Relationship to prior authority: Follows the principle of clean hearing (Natural Justice) and correct procedural application of Sections 101(6) and 95(7).
Academic / practical significance: Clarifies that even in ‘deemed’ transactions under Section 57, the tax office cannot bypass procedural requirements of notice when calculating interest on underpaid estimated tax.
Keywords (नेपाली / English): स्वामित्व परिवर्तन (Change in Control), दफा ५७ (Section 57), किस्ताबन्दी कर (Installment Tax), प्राकृतिक न्याय (Natural Justice)
Chapter 3 – Mergers, Loss Carry-Forward, and Distributions
Rule of thumb: in mergers, Section 57 interacts with Section 47 (neutral transfers), Section 53 (distributions / deemed dividend on capitalisation) and Section 20 (loss carry-forward). Continuity of losses and the tax treatment of capitalised profits depend on which of these governs.
C11. CG Foods (Nepal) Pvt. Ltd. v. Large Taxpayers Office and Inland Revenue Department
Supreme Court, Joint Bench · 2023-02-28 · 073-RB-0053
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Parties: CG Foods (Nepal) Pvt. Ltd. (Appellant) v. Inland Revenue Department and Large Taxpayers Office (Respondents)
Material facts: The taxpayer merged three companies into a surviving entity. The tax office challenged the capitalization of accumulated losses of a merged entity (Gold Beverage Nepal) as a deemed dividend distribution.
Legal issue: Whether capitalization of accumulated losses of a merged entity into the surviving entity’s share capital constitutes a deemed dividend under Section 53 and how Section 57 (change in control) applies to mergers.
Taxpayer’s argument: The merger was approved by the Company Registrar. Under Section 47, the transfer of assets and liabilities is a neutral event, and Section 40 regarding disposal applies.
Revenue / government argument: Gold Beverage had losses reducing equity. Restoring share value to 100 million using profits of other merged companies capitalized those profits, constituting a “distribution” under Section 53(1)(b).
Holding / decision: The court held that under Section 57(3), income must be calculated separately before and after a change in control. Capitalization of profits to offset losses constitutes a taxable distribution under Section 53(1)(b).
Reasoning: Section 53(1)(b) explicitly includes profit capitalization as a distribution. Restoration of value in the merged entity using accumulated profits was a deemed dividend requiring withholding under Section 88.
Final outcome: Assessment upheld
Ratio decidendi: Capitalization of profits to increase paid-up value or offset capital losses during a merger constitutes a distribution subject to tax; Section 57(3) mandates separate accounting before/after control changes.
Quotation from the decision: Section 57(3) provides for separate income years before and after ownership changes. Section 53(1)(b) deems profit capitalization as a distribution.
Relationship to prior authority: Follows principles used in Probiyotech Industries Pvt. Ltd. v. LTO.
Academic / practical significance: Clarifies the interaction between Section 53 (Distributions) and Section 57 (Change in Control) during corporate restructuring.
Keywords (नेपाली / English): स्वामित्व परिवर्तन (Change in Control), मुनाफाको पुँजीकरण (Profit Capitalization), लाभांश कर (Dividend Tax), दफा ५७ (Section 57)
C12. CG Foods (Nepal) Pvt. Ltd. v. Large Taxpayers Office and Inland Revenue Department (FY 2061/62)
Supreme Court, Joint Bench · 2023-02-28 · 073-RB-0055
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Parties: CG Foods (Nepal) Pvt. Ltd. (Appellant) v. Inland Revenue Department and Large Taxpayers Office (Respondents)
Material facts: Following a merger, the surviving entity attempted to carry forward and deduct losses incurred by the merged entity (Gold Beverage Nepal) from previous years.
Legal issue: Whether a surviving entity can deduct past losses of a merged entity under Section 20(1)(b) and the impact of Sections 40, 47, and 57 on the continuity of loss carry-forwards.
Taxpayer’s argument: Since the merger involved the total transfer of all assets and liabilities, previous losses should be deductible by the new entity under Sections 20 and 47.
Revenue / government argument: Under Section 20(1)(b), only “that person” (the specific business) can deduct its losses. Since the merged entity ceased to exist, its losses cannot be utilized by a separate legal entity.
Holding / decision: The court held that if the surviving company takes on all assets/liabilities and there is no specific prohibition in Section 20 or 47, such losses could be deducted.
Reasoning: No specific restriction in Section 20(1)(b) or 47 prevented the carry-forward when all assets/liabilities are legally assumed under approved merger conditions.
Final outcome: Partially allowed
Ratio decidendi: Legal assumption of all assets and liabilities in a sanctioned merger allows continuity of loss deductions under Section 20, provided Section 57 restrictions are not triggered or are complied with.
Quotation from the decision: Section 57(3) requires separate accounting for periods before and after an ownership change. Loss carry-forward is permissible unless specifically restricted.
Relationship to prior authority: Follows the interpretation of Section 47 regarding neutral transfers in mergers.
Academic / practical significance: Significant for understanding the “continuity of business” principle versus “legal entity” principle in M&A contexts.
Keywords (नेपाली / English): गाभिने प्रक्रिया (Merger), नोक्सानी कट्टी (Loss Carry forward), दफा ५७ (Section 57), दफा ४७ (Section 47)
C13. Jagadamba Wires Pvt. Ltd. vs. Medium Level Taxpayers Office, Babarmahal and others
Revenue Tribunal, Kathmandu · 2080/10/14 · 078-RB-0196 / Decision No. 488
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Parties: Jagadamba Wires Pvt. Ltd. (Appellant) vs. Medium Level Taxpayers Office, Babarmahal and Inland Revenue Department (Respondents)
Material facts: The taxpayer reported a loss for FY 2069/070. During audit, the tax office found that there was a change in ownership exceeding 50% on 2069/08/03 and 2069/11/07. Based on Section 57, the office disallowed the carry-forward of previous losses and restricted depreciation deductions.
Legal issue: Whether the carry-forward of previous losses can be allowed under Section 57(2)(b) after a change in control of more than 50%, and how depreciation should be calculated under Section 57(1) and (3).
Taxpayer’s argument: The change in share ownership does not imply a disposal of all company assets. The company continues to own and use the assets for income generation. Disallowing depreciation and carry-forward of losses based on share transfer is not logical.
Revenue / government argument: As per Section 57(1), if ownership changes by 50% or more compared to three years prior, the entity is deemed to have disposed of its assets and liabilities. Under Section 57(2)(b), losses incurred before the change cannot be carried forward.
Holding / decision: The Tribunal upheld the tax assessment. It ruled that Section 57 is attracted because 100% of the shares were transferred, signifying a change in control.
Reasoning: Section 57(1) creates a legal fiction of asset disposal upon 50% or more ownership change. Consequently, Section 57(2)(b) prohibits the carry-forward of pre-change losses against post-change income. Since the share transfer was verified by the Office of the Company Registrar, the application of Section 57 is correct.
Final outcome: Assessment upheld.
Ratio decidendi: When a change in control (50% or more ownership change) occurs as per Section 57(1), the entity is deemed to have disposed of its assets. Pre-existing losses cannot be carried forward to subsequent periods following such change per Section 57(2)(b).
Quotation from the decision: आयकर ऐन, २०५८ को दफा ५७(१) को अवस्थाको विद्यमानता देखिएकोले दफा ५७ को उपदफा (२)(ख) बमोजिम स्वामित्व परिवर्तन हुन भन्दा अघि निज करदातालाई हुन गएको नोक्सानी दफा २० बमोजिम आय गणना गर्ने प्रयोजनको लागि कट्टी गर्नु नपाउने…
Relationship to prior authority: n/a
Academic / practical significance: This case reinforces the strict interpretation of ‘Change in Control’ provisions in Nepalese tax law, specifically how corporate identity for tax purposes is reset upon significant ownership shifts.
Keywords (नेपाली / English): Section 57, Change in Control, Ownership Change, Loss Carry-forward, दफा ५७, स्वामित्व परिवर्तन, नोक्सानी कट्टी
C14. Sigma Pvt. Ltd. vs. Large Taxpayers Office and Inland Revenue Department
Revenue Tribunal Kathmandu, Pulchowk Lalitpur Bench · 2080/12/19 · 080-RB-0282, Decision No. 826
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Parties: Appellant: Sigma Pvt. Ltd. (PAN 603501124); Respondent: Large Taxpayers Office Hariharbhawan Lalitpur, Inland Revenue Department
Material facts: The appellant underwent a change in control (ownership transfer of 100% shares from Piyush Ghiraiya and Rahul Sarawagi to Pawan Lal Pradhan and Srijana Maskey). Following Section 57(3), the period was treated as a separate income year. An income tax return was filed showing a surplus tax payment of Rs. 52,50,711.78. The tax office, in its amended assessment notice (but not in the original decision), restricted the carry-forward or refund of this excess tax citing Section 57(2).
Legal issue: Whether excess tax paid (surplus) on domestic income can be restricted from being carried forward or refunded under Section 57(2) of the Income Tax Act, 2058 following a change in control.
Taxpayer’s argument: Section 57 restricts specific items like losses and interest but does not prohibit the carry-forward or refund of excess tax paid on domestic income (Section 113). The restriction in Section 57(2)(h) applies only to foreign tax credits. Furthermore, the restriction was added to the notice without being part of the original decision and without providing an opportunity for defense (violating natural justice).
Revenue / government argument: Since a change in control occurred under Section 57, the entity is restricted from specific benefits, and the excess tax cannot be carried forward to the new ownership period.
Holding / decision: The Tribunal reversed the tax authority’s decision regarding the restriction on excess tax carry-forward/refund.
Reasoning: Section 57(2) lists exhaustive restrictions. Clause (h) specifically refers to foreign tax credits under Section 71(3). There is no provision in Section 57 that prohibits carrying forward or refunding excess tax paid on domestic income. Tax laws must be interpreted strictly as per the legislative intent. Additionally, the tax office failed to mention this restriction in the preliminary assessment notice and original decision, violating the principles of natural justice and Section 101(6).
Final outcome: Partially reversed (specifically reversed regarding the restriction on excess tax carry-forward).
Ratio decidendi: Section 57 of the Income Tax Act does not restrict the carry-forward or refund of excess tax paid on domestic source income; such restrictions only apply to specific items listed, including foreign tax credits.
Quotation from the decision: Income Tax Act, 2058 Section 57 regarding the change in control of an entity… does not prohibit the carry-forward or refund of amounts paid for domestic income. Therefore, the excess amount paid for domestic source income is not affected by the change in control.
Relationship to prior authority: Follows the principle of finality of tax liability and the right to refund under Section 113.
Academic / practical significance: Clarifies the scope of restrictions under Section 57(2), distinguishing between restricted carry-forwards (losses/interest/foreign tax credits) and general tax overpayments.
Keywords (नेपाली / English): Section 57 (दफा ५७), Change in Control (स्वामित्व परिवर्तन), Excess Tax Refund (बढी दाखिला कर फिर्ता), Deemed Fiscal Year, Natural Justice (प्राकृतिक न्याय)
Chapter 4 – Validity, Scope, and Limits of Section 57 Assessments
Rule of thumb: a Section 57 assessment is only as good as the transfer it rests on. Where the underlying transaction is void or judicially reversed, the change-in-control consequences fall away with it.
C15. Vishal Agarwal, Nikunj Agarwal and Trilok Chandra Agarwal vs. Inland Revenue Department and Large Taxpayers Office
Revenue Tribunal Kathmandu · 2023-03-26 · 077-RB-0326 / Decision No. 256
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Parties: Vishal Agarwal, Nikunj Agarwal and Trilok Chandra Agarwal (Shareholders of Pooja International Nepal Pvt. Ltd.) vs. Large Taxpayers Office, Lalitpur and Inland Revenue Department
Material facts: The Large Taxpayers Office assessed capital gains tax on the transfer of shares of Pooja International Nepal Pvt. Ltd. claiming a change in control under Section 57 of the Income Tax Act. However, the Morang District Court subsequently invalidated the share sale deed and reverted the ownership to the previous status.
Legal issue: Whether the tax assessment based on share transfer and change in control (Section 57) remains valid when the underlying share sale deed has been declared void by a court.
Taxpayer’s argument: The taxpayers argued that since the Morang District Court (Case No. 075-CP-2543) invalidated the share purchase/sale decisions and restored the status quo ante, the condition of change in control under Section 57 no longer exists, making the tax assessment baseless.
Revenue / government argument: The tax authority initially argued that the share transfer involved profit and triggered Section 57, and that at the time of assessment, the taxpayers had admitted to the ownership change in their statements.
Holding / decision: The Revenue Tribunal ruled that since the court of law invalidated the share transfer document, the tax assessment based on that transfer cannot be maintained.
Reasoning: The tribunal reasoned that tax liability is tied to the reality of the transaction. Since the legal document for the share sale was cancelled by a competent court (Morang District Court), the basis for applying Section 57 (Change in Control) and subsequent gains assessment disappeared.
Final outcome: Assessment reversed and remanded for reassessment based on actual share records.
Ratio decidendi: Tax assessments based on ownership changes (Section 57) must be based on valid legal transfers; if a court voids the transfer, the tax assessment based on that specific transfer must also be set aside.
Quotation from the decision: In the perspective that the share purchase-sale deed dated 2074.03.28 was cancelled by the Morang District Court in case 075-CP-2543 on 2076.12.05, the decision regarding the determination of capital gains tax at both levels does not appear appropriate and is hereby quashed.
Relationship to prior authority: Follows the principle that tax follows the legal reality established by court decrees regarding ownership.
Academic / practical significance: This case illustrates the intersection between civil litigation (share disputes) and tax law (Section 57), showing that tax authorities must adjust assessments if the underlying commercial transaction is legally annulled.
Keywords (नेपाली / English): Section 57, Change in Control, Share Transfer, Capital Gains Tax, दफा ५७, शेयर स्वामित्व, नियन्त्रणमा परिवर्तन
C16. Pooja International Nepal Pvt. Ltd. vs. Inland Revenue Department and Large Taxpayers Office
Revenue Tribunal Kathmandu · 2023-03-26 · 077-RB-0329 / Decision No. 258
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Parties: Pooja International Nepal Pvt. Ltd. (Represented by Vishal Agarwal) vs. Large Taxpayers Office, Lalitpur and Inland Revenue Department
Material facts: The company underwent assessment where depreciation and other expenses were disallowed following an alleged change in control under Section 57. The underlying share transfer was later voided by the Morang District Court.
Legal issue: Validity of disallowing depreciation and other deductions based on Section 57 when the control change itself was legally reversed.
Taxpayer’s argument: Disallowing depreciation on the grounds of Section 57 is incorrect because the share transfer that triggered the section was invalidated by a court decree.
Revenue / government argument: Initially applied Section 57 to treat the company as having disposed of its assets and liabilities at the time of the 50% change in ownership.
Holding / decision: Decision regarding Section 57 impacts (disallowance of depreciation) reversed due to the annulment of the share transfer.
Reasoning: Following the same reasoning as the linked case (077-RB-0326), the tribunal found that the legal basis for invoking Section 57 was removed by the court’s invalidation of the share sale.
Final outcome: Decision set aside for reassessment based on actual shareholding records.
Ratio decidendi: The tax consequences of Section 57 cannot be enforced if the change in control is nullified by a court of law.
Quotation from the decision: Since the share purchase-sale deed of 2074.03.28… was cancelled by the Morang District Court… the amended tax assessment order… does not appear appropriate and is quashed.
Relationship to prior authority: Directly linked to Case No. 077-RB-0326.
Academic / practical significance: Reinforces the necessity of a valid change in control for the application of Section 57.
Keywords (नेपाली / English): Section 57, Change in Control, Depreciation, दफा ५७, नियन्त्रणमा परिवर्तन, ह्रास कट्टी
C17. Dabur Nepal Pvt. Ltd. vs Large Taxpayers Office, Hariharbhawan Lalitpur et al.
Revenue Tribunal Kathmandu, Bench at Pulchowk Lalitpur · 2081/08/11 · 081-RB-0097 (Decision No. 251)
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Parties: Dabur Nepal Pvt. Ltd. (Appellant) vs Large Taxpayers Office & Inland Revenue Department (Respondents)
Material facts: The taxpayer was assessed for Income Tax for FY 2072/73. The tax administration challenged the valuation of bonus shares and the deductibility of specific expenses like repair/maintenance and foreign exchange losses. Central to the dispute was whether the taxpayer, who trades in securities as a primary business, should be taxed at 25% or 30% under Schedule 1, Section 2 of the Income Tax Act.
Legal issue: Whether the taxpayer’s securities trading constitutes ‘securities business’ taxable at 30% under Schedule 1 or a general business taxable at 25%, and the applicability of Section 57 regarding change in control and asset disposal.
Taxpayer’s argument: Bonus shares have a cost of Rs. 100 per share as per the Weighted Average Cost method. Trading in shares is the company’s primary objective, making shares ‘trading stock’. They argued the 30% tax rate applies only to licensed brokers/dealers, not private companies trading as natural persons.
Revenue / government argument: Bonus shares have no cost (zero consideration) and should not be allowed as a deduction. The taxpayer is engaged in ‘securities business’ and should be taxed at 30% under Schedule 1, Section 2(2).
Holding / decision: The Tribunal ruled in favor of the taxpayer regarding the tax rate and bonus share valuation. It held that the company is not a licensed ‘securities business’ and thus should be taxed at the general 25% rate.
Reasoning: Section 57 of the Income Tax Act 2058 provides that if there is a more than 50% change in ownership, the entity is treated as having disposed of its assets and liabilities. However, regarding the tax rate, the Tribunal noted that ‘securities business’ requires a license under the Securities Act 2063. Private companies trading on their own behalf are not ‘securities businesses’ for the purpose of the 30% rate.
Final outcome: Partially Allowed (Assessment reversed regarding 30% tax rate and bonus share cost; upheld regarding specific repair and maintenance limits).
Ratio decidendi: The special tax rate of 30% for ‘securities business’ applies only to entities licensed under the Securities Act 2063. Ownership changes under Section 57 trigger deemed disposal, but do not automatically reclassify a company’s business category for tax rates.
Quotation from the decision: Section 57 of the Income Tax Act, 2058 provides for a deemed disposal of assets or liabilities when more than 50% ownership changes.
Relationship to prior authority: Follows the principle from Large Taxpayers Office vs. Yak and Yeti Hotel Ltd. regarding the rights of commercial entities to invest in shares.
Academic / practical significance: Clarifies the definition of ‘securities business’ vs. ‘securities trading’ and interprets the interaction between Section 57 and tax rate schedules.
Keywords (नेपाली / English): आयकर (Income Tax), दफा ५७ (Section 57), धितोपत्र व्यवसाय (Securities Business), बोनस शेयर (Bonus Shares), नियन्त्रणमा परिवर्तन (Change in Control)
Concluding Synthesis
Measuring the threshold – Gabiionet treats the 50% trigger as a net shift in ownership and refuses to aggregate exits and entries (34% + 34%), whereas the issuance and dilution cases (Pioneer Global, MAW Earthmovers) read any movement (direct or indirect) reaching 50% as sufficient. Practitioners should expect argument over whether ownership change is measured net or cumulatively in terms of calculation and whether ownership change is measured based on direct or underlying ownership.
Reach of the trigger – Bottlers Nepal extends Section 57 to indirect, offshore parent-level transfers, and Rajesh Hardwares counts an inheritance on death toward the 50% threshold – both expansive readings. A narrowing counterweight comes from the validity line below.
Deeming fiction vs. actual gain – Bhudev Trading insists tax follow actual computed gains rather than the deemed-disposal figure at large; Summit Hotel declines to tax unrealised gains where no disposal occurred, penalising only the Section 57(3) filing default. Together they cabin the deeming mechanism.
Validity as a limit – Vishal Agarwal and Pooja International hold that a voided or reversed transfer defeats the assessment built on it.
Procedure and natural justice – Brihaspati Vidhyalaya conditions Section 118 interest on the Section 95(7) notice. Expect procedural-compliance challenges to accompany substantive Section 57 disputes.