2022 (5) TMI 630 - HC - Income Tax

Reopening of assessment u/s 147 - Notice u/s 148A(b) issued/passed in the name of Bioseed Research India Pvt. Ltd., yet the same had been served upon the successor entity i.e. DCM Shriram Ltd - HELD THAT - Having heard learned counsel for the parties, the admitted position is that the assessment of the petitioner company i.e. DCM Shriram Ltd. for the assessment year 2018-19 has not concluded yet and the same is pending adjudication before DRP. Consequently, this Court is in agreement with the submission of the petitioner that notice for reassessment could not have been issued to the petitioner for the assessment year 2018-19. Accordingly, on this short ground alone, the present writ petition and application are allowed. If the law permits the respondent/revenue to take further steps in the matter, it shall be at liberty to do so.

Summary

Issues:
Challenging Notice under Section 148 of Income Tax Act, 1961 for a non-existent company amalgamated with the petitioner company; Validity of notice issued in the name of a non-existent company; Assessment pending adjudication before the Dispute Resolution Panel for the petitioner company for the Assessment Year 2018-19.

Analysis:
The petitioner filed a writ petition challenging a Notice dated 4th April, 2022 issued under Section 148 of the Income Tax Act, 1961, in the name of a non-existent company, Bioseed Research India Pvt. Ltd., which had been amalgamated with the petitioner company. The petitioner contended that the notice was issued based on a previous notice sent to the non-existent company, and the respondent was informed of the amalgamation and that the transactions referred to in the notice were accounted for by the petitioner company. Despite this communication, the respondent issued an order and subsequent notice in the name of the petitioner company with the PAN of the non-existent company.

The petitioner argued that the assessment for the Assessment Year 2018-19 was still pending before the Dispute Resolution Panel, and therefore, a reassessment notice could not have been issued. The respondent, however, claimed that the correct entity, DCM Shriram Ltd., was well aware of the proceedings and there was no violation of natural justice. The Court noted that the assessment for the petitioner company had not concluded, and hence, agreed that the reassessment notice for the Assessment Year 2018-19 was not valid.

As a result, the Court allowed the writ petition and application on the grounds that the reassessment notice could not have been issued for the assessment year in question. The respondent was granted liberty to take further steps if permitted by law, with the petitioner retaining the right to seek remedies in accordance with the law if aggrieved by any future actions taken by the revenue authorities.