Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Online)(Tel) 38827

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
Sujoy Paul, Namavarapu Rajeshwar Rao, JJ
Jupally Real Estate Developers Private Limited – Appellant
Versus
Deputy Commissioner of Income Tax – Respondent
WRIT PETITON Nos.29026|29042|29143|29993|29994 OF 2023

Advocates:
For the Appellants/Petitioners: S. Ravi
For the Respondents: K. Mamata

In tax proceedings involving corporate amalgamation, notices issued to a transferor entity post-amalgamation are void. Consequently, the limitation period for assessment under Section 153B commences only when seized documents are handed over to the assessing officer having valid jurisdiction over the successor/transferee entity.

Headnote:(A) Income Tax Act, 1961 - Section 153B, 153C and 132 - Search and seizure - Assessment/reassessment limitation - Starting point of limitation for assessment - The proviso to Section 153B dictates that for an 'other person', the limitation is the later of the statutory periods or nine months from the end of the financial year in which documents/assets are handed over to the jurisdictional assessing officer - Notices issued to amalgamating entities post-amalgamation are void, and such proceedings fade into insignificance; thus, limitation should be calculated from the date of handover to the competent jurisdictional officer of the transferee/successor entity. (Paras 9, 10, 11, 12, 13)

(B) Interpretation of Statutes - Taxing statutes - Strict construction - Principle that there is no room for intendment or equity in taxing statutes - If language is plain and unambiguous, it must be given effect as written, irrespective of hardship or consequences. (Para 15)

Facts of the case:
Following a search and seizure operation, incriminating documents were found relating to certain entities which had previously undergone amalgamation with the petitioner. Initial notices under the relevant provisions were issued to the transferor companies. Upon realizing those companies had ceased to exist due to the amalgamation, the revenue issued fresh notices to the transferee/petitioner under the relevant act. The petitioner challenged these notices as barred by limitation, arguing that the limitation period should be reckoned from the date of the primary notices issued to the transferor companies rather than the date of handover of jurisdiction to the officer dealing with the transferee.

Findings of Court:
The court held that notices issued to non-existent (amalgamated) entities were void and did not trigger a limitation period. The limitation period under the proviso to Section 153B only commences upon the handover of seized documents to the assessing officer having valid jurisdiction over the relevant person. Since the earlier notices were void, the limitation period commenced from the date when the jurisdictional officer for the transferee was identified and the documents were handed over.

Issues: The central issue was determining the starting point for calculating the limitation period under Section 153B for an 'other person' in cases involving corporate amalgamation, and whether internal administrative transfers extend the prescribed limitation.

Ratio Decidendi: Taxing statutes must be interpreted strictly based on their plain language. Because the initial notices issued to the transferor entities were void, they did not constitute a valid 'handover' for the purpose of triggering limitation. The limitation period under the proviso to Section 153B is triggered only by the handover of seized material to the officer having valid jurisdiction over the actual assessee, and administrative centralization does not invalidate this mechanism.

Result: Writ petitions dismissed.

Table of Content
1. assessment proceedings post-amalgamation must target the surviving transferee entity. (Para 1 , 2 , 3)

<Gist :

>Head Note :

? Cases referred

1. AIRONLINE 2019 SC 714

2. [2024] 161 taxmann.com 604 (Madras)

3. (1869) LR 4 HL 100

4. (1921) 1 kb 64

5. JT 1999 (2) SC 272

6. (1951) 2 All ER 473

(Per Hon’ble Sri Justice Sujoy Paul)

JUDGMENT PRONOUNCED ON: 25.10.2024

1. Whether Reporters of Local newspapers may be allowed to see the Judgments? :

2. Whether the copies of judgment may be Marked to Law Reporters/Journals? :

3. Whether His Lordship wishes to see the fair copy of the Judgment? :

COMMON ORDER: (Per Hon’ble Justice Sujoy Paul)

In these petitions filed under Article 226 of the Constitution, the petitioner has taken exception to the orders dated 10.10.2023 whereby its representations against the office notices dated 30.12.2022 issued under Section 153C of the Income Tax Act, 1961 (for short, the Act) were rejected by the Commissioner of Income Tax, Central Circle, Hyderabad.

Facts:

Draped in brevity, the admitted facts between the parties are that a search and seizure operation under Section 132 of the Act was conducted in the group cases of M/s.Coastal Energy and M/s.Coastal Energen Private Limited at their premises located in Chennai. During that search operation, certain documents relating to ‘My Home Group’ i.e., (i) M/s.Spinoza Enterprises (P) Limited, (ii) M/s.JBM Resorts (P) Limited, (iii) M/s.JBM Agros International (P) Limited and (iv) M/s. JBM Exports were found and seized by the Department. The respective jurisdictional officers issued notices under Section 153C of the Act to the above assesses for the Assessment Years 2012-13 to 2017-18. The aforesaid four assessee companies submitted their reply by contending that M/s.Spinoza Enterprises (P) Limited, M/s.JBM Resorts (P) Limited, M/s.JBM Agros International (P) Limited and M/s. JBM Exports were amalgamated with M/s.Jupally Real Estate Developers Pvt. Limited, the petitioner herein, with effect from 05.09.2019 pursuant to an order of National Company Law Tribunal dated 05.09.2019. Since the aforesaid four companies stood amalgamated with the petitioner, no action can be taken against them. The Department, in view of judgment of the Supreme Court in Pr. Commissioner of Income Tax v. Maruti Suzuki India Limited ¹1 AIRONLINE 2019 SC 714, realised that notices issued against amalgamating entity after amalgamation is void because the said entity ceased to exist after amalgamation. Thus, the Department thought it proper to put the petitioner to notice. On 27.12.2022, the Commissioner of Income Tax, Central Circle-2(1), Hyderabad, vide impugned orders i.e., DIN Nos.ITBA/AST/F/17/2023-24/1056948714(1), ITBA/ AST/F/17/2023-24/1056948993(1), ITBA/AST/F/17/2023-24/1056949244(1), ITBA/AST/F/17/ 2023-24/1056948404(1) and ITBA/AST/F/17/2023-24/ 1056948563(1), notified the assessing officer who will be having jurisdiction. Accordingly, notices under Section 153C of the Act were issued for the Assessment Years 2012-13 to 2017-18 on 30.12.2022. The petitioner filed reply and raised objection against the said notices dated 30.12.2022. When no heed was paid to the representations/objections filed by the petitioner on the point of limitation, the petitioner filed W.P.No.16237 of 2023 which was disposed of by order dated 20.07.2023, directing the respondents to take an appropriate decision on the representations of the petitioner dealing with the question of limitation under Section 153C of the Act expeditiously preferably within a period of six weeks. In turn, by impugned orders dated 10.10.2023, such representations/objections were rejected. These orders are subject matter of challenge in this batch of Writ Petitions.

Contention of the petitioner:

Sri S.Ravi, learned Senior Counsel for the petitioner, submits that notices were issued to four entities as under:

S.No.	Company	A.O.	Notice U/S.153C
1.	M/s.JBM Resorts Private Limited	Respondent No.2	0

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2024 Supreme(Online)(Tel) 38827

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABADSujoy Paul, Namavarapu Rajeshwar Rao, JJJupally Real Estate Developers Private Limited – AppellantVersusDeputy Commissioner of Income Tax – RespondentWRIT PETITON Nos.29026|29042|29143|29993|29994 OF 2023

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
Sujoy Paul, Namavarapu Rajeshwar Rao, JJ
Jupally Real Estate Developers Private Limited – Appellant
Versus
Deputy Commissioner of Income Tax – Respondent
WRIT PETITON Nos.29026|29042|29143|29993|29994 OF 2023