2016 (11) TMI 1374 - HC - Income Tax

Validity of re-oping of assessment - Held that - Considering the documents on record it appears that the objections are raised against reopening by M/s. Accurate Finstock Pvt. Ltd. through its Authorized Signatory (which according to the petitioner is not in existence). Nothing is on record that the petitioner had raised any objection pointing out the aforesaid aspects. Under the circumstances, let the petitioner raise a specific objection pointing out the aforesaid facts to the Assessing Officer and it is directed that if such objection is raised within a period of one week from today, the same may be considered by the concerned Assessing Officer within a period of 10 days thereafter and if by assigning the reasons the Assessing Officer still is of the opinion that the impugned notice is not required to be quashed and set aside on the aforesaid ground or any other ground, in that case, the Assessing Officer may not proceed further with the reassessment for a period of two weeks from passing of such order which may be communicated to the petitioner forthwith.

Summary

Issues:
Reopening of assessment for Assessment Year 2009-10 against a non-existent company merged with another company.

Analysis:
The petition raises a grievance regarding the reopening of assessment for the Assessment Year 2009-10 against a non-existent company, Accurate Finstock Pvt. Ltd., which had been merged with another company and subsequently merged into the petitioner, Adani Properties Pvt. Ltd. The petitioner argues that initiating reassessment proceedings against a non-existent company is impermissible, citing precedents from the Gujarat High Court and the Delhi High Court. The notice under Section 148 of the Income Tax Act, 1961, dated 30.03.2016, is challenged to be quashed and set aside.

Upon hearing the petitioner's counsel and reviewing the documents, it is noted that objections were raised against the reopening by M/s. Accurate Finstock Pvt. Ltd. through its Authorized Signatory, which the petitioner claims is non-existent. However, there is no record of the petitioner raising objections highlighting this issue. The court directs the petitioner to specifically raise objections pointing out these facts to the Assessing Officer. The Assessing Officer is instructed to consider such objections within a specified timeframe and, if necessary, provide reasons for not quashing the notice.

The court orders the petitioner to raise specific objections within a week, and the Assessing Officer to consider them within 10 days thereafter. If the Assessing Officer decides not to quash the notice, the reassessment should not proceed for two weeks from the date of the decision. The court clarifies that no opinion on merits has been expressed in favor of either party, leaving the decision to the Assessing Officer in accordance with the law. The Special Civil Application is disposed of, with direct service permitted on the same day.