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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BIREN VAISHNAV, DEVAN M. DESAI, JJ.
Anokhi Realty Private Limited – Petitioner
Versus
Income Tax Officer Ward 1(1)(3) - Respondent
R/Special Civil Application No. 17613 Of 2021
Decided On : 07-08-2023
Constitution of India, 1950 – Articles 226, 227 – Income Tax Act, 1961 – Section 148, 142(1) – Companies Act, 1956 – Section 394(2) – Income-tax – Scheme of amalgamation – Quashing and setting aside impugned – Court are conscious of fact that Income-tax Department had already been issued notice by Court at time of considering request for approving scheme of amalgamation, however, that would in no manner absolve any party of its obligation to intimate final order of amalgamation, as is otherwise expected under law – Statute since has not provided any format nor has any specified format otherwise prescribed this intimation in response to notice under Section142 of Income Tax Act should be construed as a sufficient compliance and hence, all petitions deserve to be allowed, quashing and setting aside show cause notices with consequential reliefs – Petition allowed.
JUDGMENT :
(Biren Vaishnav, J.)
1. The present petition under Articles 226 and 227 of the Constitution of India, has been filed with the following prayers:
8(b) The Hon’ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction quashing and setting aside the impugned notices issued u/s. 148 of the Income Tax Act by the Respondent (Annexure-D).”
2. Facts in brief are as under:
2.1 Satyasarthi Estate Organisers Private Limited along with three other companies ceased to exist with effect from 01.04.2009 subsequent to their amalgamation with the petitioner company being the transferee company. The amalgamation was effectuated vide scheme of amalgamation in accordance with the provisions of the Companies Act.
2.2 The erstwhile company therefore viz. Satyasarthi Estate Organisers Private Limited addressed a letter dated 07.08.2019 to the jurisdictional Assessing Officer intimating that it had amalgamated with Anokhi Reality Private Limited. A copy of the notice in form no.CAA with the draft scheme of amalgamation was enclosed for objections and suggestions.
2.3 Subsequently, Satyasarthi Estate Organisers Private Limited received notices under Section 148 of the Income Tax Act for the years 2014-15 to 2017-18 on various dates between 29.03.2021 and 31.03.2021. The erstwhile company submitted a reply on 30.01.2020 informing the officer of cancellation of the PAN card due to merger. On 05.07.2021, in response to the notices, the competent officer was informed that since Satyasarthi Estate Organisers Private Limited had merged with the petitioner company with effect from 01.04.2019, the company ceased to be in existence. Orders were passed disposing of objections raised by the erstwhile company for the assessment years 2014-15 to 2017-18 on various dates in July 2021. Notice under Section 142(1) of the Act was also issued on 03.09.2021.
3. Ms.Nupur Shah learned advocate appearing for the petitioner would make the following submissions:
3.1 The notices under Section 148 of the Income Tax Act, 1961, were issued upon a non-existent entity and therefore they were illegal.
3.2 She would invite the Court’s attention to the scheme of amalgamation and submit that as per the provisions of the scheme, the amalgamation was effective from 01.04.2019. In other words, the erstwhile company viz. Satyasarthi Estate Organisers Private Limited had ceased to exist where notices under Section 148 of the Income Tax Act were issued.
3.3 Ms.Shah would further submit that the jurisdictional officer was intimated of the amalgamation vide communications dated 07.08.2019 and 30.01.2020, and therefore the jurisdictional Assessing Officer had due knowledge about the aforesaid amalgamation.
3.4 The impugned notices for reopening of the assessment proceedings in the case of amalgamated company is impermissible as there is no provision in the Income Tax Act to make an assessment on a non-existent company.
3.5 Ms.Shah would rely on a definition of the term “assessee” and submit that it is evident that an assessee is a person by whom income tax or some other money is payable.
3.6 In support of her submissions, Ms.Shah would rely on the following decisions:
II. In case of Principal Commissioner of Income Tax, New Delhi reported in [2019] 107 taxmann.com 375 (SC)
III. In case of Adani Wilmar Ltd. v. Assistant Commissioner of Income-tax reported in [2023] 150 taxmann.com 178 (Gujarat)
IV. In case of Inox Wind Energy Ltd. v. Addition
An assessment notice issued against a non-existing entity post-amalgamation is void ab initio, reinforcing the principle that an amalgamated company ceases to exist legally.
Notices under Section 148 of the Income Tax Act cannot be issued to a non-existent entity following an amalgamation, as such actions lack legal jurisdiction.
The assessment framed by the Assessing Officer on a non-existent company is a nullity in the eyes of law and void, and the provisions of section 292B cannot rescue the department.
Notices issued under Section 148 of the Income Tax Act against non-existing companies post-amalgamation are invalid and without jurisdiction.
Assessments made under Section 153A against non-existent entities are void ab initio, confirming jurisdictional deficiencies invalidate the assessment process.
Proceedings against a dissolved company are void and cannot be sustained under the Central Goods and Services Tax Act.
Amalgamation of company – An assessment can always be made and is supposed to be made on Transferee Company taking into account income of both Transferor and Transferee Company.
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