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DELHI HIGH COURT
MANMOHAN, MANMEET PRITAM SINGH ARORA
Karida Real Estates Private Limited – Appellant
Versus
Assistant Commissioner of Income Tax – Respondent
| Table of Content |
|---|
| 1. challenge to reassessment order under income tax act. (Para 1) |
| 2. invalidity of reassessment notice due to non-existent entity and violation of natural justice. (Para 2 , 3) |
| 3. acknowledgment of failure to consider petitioner's reply. (Para 4) |
| 4. court sets aside notice and order for non-consideration of reply. (Para 5) |
| 5. court's order and clarification on merits. (Para 6) |
JUDGMENT
Manmohan, J. (Oral)--Present writ petition has been filed challenging the order dated 4th April, 2022 passed by Respondent No.1 under Section 148A(d) of the Income Tax Act, 1961 [for short `the Act'] as well as the notice dated 4th April, 2022 issued under Section 148 of the Act for the Assessment Year 2018-19.
2. Learned counsel for the petitioner states that the reassessment proceedings are void ab initio as they have been issued in the name of "Damian Estate Developers Private Limited a non-existent entity as it had amalgamated with the Petitioner company with effect from 1st April, 2016 vide order dated 7th February, 2018 passed by the National Company Law Tribunal. She relies on the decision of the Supreme Court in Pr. Commissioner of Income Tax v. Maruti Suzuki India Limited, (2019
Issuance of a notice to a non-existing entity constitutes a substantive illegality, and failure to provide an opportunity for hearing violates natural justice principles.
A notice under Section 148 of the Income Tax Act is invalid if issued against a non-existent entity, confirming the need for valid recognition of a company's status post-amalgamation.
Violation of the principle of natural justice in assessment proceedings warrants setting aside the assessment orders and remanding the matter for fresh adjudication.
Reassessing without a hearing contravenes natural justice principles; proceedings must ensure opportunities for taxpayer representation.
The Court affirmed that vague show cause notices issued under Section 148A(b) lack compliance with natural justice, necessitating clear material for Assessee responses.
Assessing Officers must provide specific details in notices for effective response by Assessee, adhering to principles of natural justice.
Notices issued under Income Tax Act to a non-existent entity due to merger are void ab initio; reasoned orders are necessary for valid assessment proceedings.
A reassessment order is invalid if it violates natural justice by failing to provide a party the opportunity to respond to a notice before its compliance deadline.
A show cause notice under Section 148A(b) of the Income Tax Act must contain specific allegations of income escapement; its absence renders the assessment invalid.
The court established that failing to consider a taxpayer's submission violates procedural fairness in tax assessments, necessitating the annulment of prior notices.
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