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IN THE HIGH COURT OF JHARKHAND AT RANCHI
HON’BLE MR. JUSTICE RONGON MUKHOPADHYAY, HON’BLE MR. JUSTICE DEEPAK ROSHAN, JJ.
Parikh Marketing Private Limited - Petitioner
Versus
Principal Commissioner of Income Tax, Dhanbad and Anr. - Respondents
W.P.(T) No. 2592 of 2023
Decided On : 06-02-2024
[QUASHING] - [INCOME TAX ACT] - [Section 148A(b), Section 148A(d), Section 148] - [The court discussed the provisions of the Income Tax Act, particularly sections 148A(b), 148A(d), and 148, which govern the issuance of notices for reopening assessments. The court emphasized that notices issued to a non-existent entity are void ab initio, highlighting the importance of jurisdiction and proper identification of the taxpayer. The court's decision was influenced by precedents that established the principle that an entity ceases to exist upon dissolution or amalgamation, thus invalidating the notices issued in this case.]
JUDGMENT :
Deepak Roshan, J.
The instant application has been preferred for the following reliefs:-
2. The brief facts of the case as disclosed in the instant writ application is that the petitioner is a Private Limited Company duly incorporated on 31.03.2008. Its main business is of wholesale and retail trading of electronic appliances etc. Up to AY 2009-10 the business was carried on by a partnership firm known as M/s Parikh Sales under its PAN AACFM7651D and it has filed its last income tax return for the Assessment year 2009-10 on 30.09.2009.
With effect from 01.04.2009, the aforesaid business carried on by the aforesaid partnership firm M/s Parikh Sales was acquired and taken over by the petitioner Private Limited Company, with its all assets, liabilities as a going concern, in pursuance of a Board resolution of the company passed on 01.04.2009.
On 20.04.2009, the aforesaid partnership firm M/s Parikh Sales has filed a Petition dated April 1, 2009, before it’s assessing officer, informing him regarding the change in constitution of the firm and conversion of the partnership business into Private Limited Company M/s Parikh Marketing Private Limited w.e.f. 01.04.2009 as a going concern.
For the AY 2014-15, the case of the Petitioner company was taken up for complete scrutiny and Assessment Order u/s 143(3) of the Income Tax Act, 1961 (hereinafter to be referred as the Act), was passed on 07.12.2016.
The case of the petitioner is that the alleged Axis Bank account No. 1720102000001076 standing in the name of aforesaid partnership firm M/s Parish Sales, was duly disclosed by the Petitioner company in its return filed and was accepted by the jurisdictional assessing officer, as if it was of the Petitioner company, since no adverse inference in this respect was made.
The petitioner Company filed its income tax return for the instant AY 2019-20 on 31.10.2019 by e-filing, wherein the said Axis Bank account No. 1720102000001076 standing in the name of aforesaid partnership firm M/s Parikh Sales was duly disclosed by the Petitioner company as its Bank account, as was being done in past also, after its acquisition/take over w.e.f. 01.04.2009.
On 03.03.2023, a Show Cause Notice u/s 148A(b) of the Act was issued by the Respondent No.2 in the name of erstwhile dissolved /non-existent partnership firm M/s Parikh Sales PAN: AACFM7651D regarding cash deposit in aforesaid Axis Bank Limited Account amounting to Rs. 2,48,68,510/- and to show cause why its case for the Assessment Year 2019-20 should not be reopened under section 147 of the IT Act, 1961.
On 16.03.2023, a reply was filed by the Petitioner before the Respondent No.2, requesting him to drop the proceedings stating the aforesaid facts of acquisition and take over and the disclosure of the aforesaid Axis Bank account in the return of the Petitioner company. On 31.03.2023, without any further clarification or without giving any opportunity of
Notices issued under the Income Tax Act to a non-existent entity are void ab initio, and proper jurisdiction must be established based on the current legal status of the taxpayer.
Reassessment proceedings initiated against a business entity that has ceased to exist due to dissolution are void ab initio and legally unenforceable, as jurisdictional notices cannot be issued again....
The impugned order and notice under Section 148 and 148A(d) of the Income Tax Act, issued against a non-extant entity, cannot be complied with, and were therefore set aside.
Reassessment u/s 147 invalid if notice issued to dissolved firm post-takeover by company despite AO's knowledge; wrong PAN/facts show non-application of mind; remit for verifying Form 26AS incomes in....
Notices issued in the name of a dissolved partnership firm are invalid, reaffirming the necessity for proper jurisdiction in tax assessments.
Notices issued under tax laws to a nonexistent entity are invalid; transactions must be correctly accounted for by the current entity.
The central legal point established in the judgment is that the notice issued in the name of a non-existent entity is bad in law, and human errors under Section 292B cannot nullify proceedings that a....
Notices issued under Section 148 of the Income Tax Act against non-existing companies post-amalgamation are invalid and without jurisdiction.
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