2022 (11) TMI 829 - HC - Income Tax

Reopening of assessment u/s 147 - Notice issued in the name of non existing/transferor company - HELD THAT - This Court is of the view that not only the notice was issued in the name of the transferor company but the impugned order u/s 148A(d) as well as the notice u/s 148 have been issued on the PAN of the transferor company. This Court is also of the view that the primary argument advanced by the Petitioner that the transferee company had filed its return inclusive of the financial data/numbers of the transferor company has not been examined on merit inasmuch as the scrutiny assessment order dated 07th October, 2015 has not been dealt with. The impugned order passed u/s 148A(d) as well as the consequential notice issued under Section 148 of the Act for the Assessment Year 2013-14 are set aside and the notice issued under Section 148A(b) of the Act is deemed to have been issued to the transferee company i.e. the Petitioner. In the interest of justice, the Petitioner is given liberty to file its reply/response to the notice issued under Section 148A(b) of the Act along with all the relevant documents within two weeks from today.

Summary

Issues:
Challenging notice under Section 148 of the Income Tax Act, 1961, order under Section 148A(d), and subsequent notice for Assessment Year 2013-14.

Analysis:
1. The petitioner filed a writ petition challenging various notices and orders issued under the Income Tax Act. The petitioner argued that after a merger, there was no obligation for the dissolved company to file income tax returns. The petitioner emphasized that the amalgamated company had already filed its returns inclusive of the financial data of the dissolved company. The petitioner contended that the notices issued were invalid as they were in the name of a non-existing entity.

2. The respondent, representing the Revenue, argued that the procedural provisions of Sections 148A(b) and 148A(d) were followed correctly, and no prejudice was caused to the petitioner. The respondent stated that the final notice and order were issued to the correct legal entity, despite the initial notice being addressed to the transferor company.

3. After hearing both parties, the Court observed that the notices and orders were indeed issued in the name of the transferor company, and the PAN of the transferor company was used. The Court noted that the petitioner's argument regarding the filing of returns inclusive of the dissolved company's financial data had not been examined on merit, as the scrutiny assessment order was not considered.

4. Consequently, the Court set aside the impugned order under Section 148A(d) and the subsequent notice for the Assessment Year 2013-14. The notice issued under Section 148A(b) was deemed to have been issued to the transferee company (petitioner). The petitioner was granted two weeks to respond to the notice with relevant documents, and the Assessing Officer was directed to pass a fresh order within eight weeks.

5. The Court clarified that its decision did not comment on the merits of the controversy and left the rights and contentions of all parties open. The writ petition and pending application were disposed of with the provided liberty and directions, ensuring justice and adherence to the law.