2023 (5) TMI 368 - HC - Income Tax

Validity of assessment order u/s 143 (3) read with 144B - notices were issued in the name of a non-existent company - scheme of amalgamation approved - HELD THAT - The factum of knowledge of amalgamation is not disputed by the Respondents Counsel Mr. Sharma nor is there any denial of information with regard to the amalgamation being received in the Affidavit in Reply dated 28th March 2023 filed by the Jurisdictional Assessment Officer. This Court in the case of CLSA India Private Limited vs DCIT-4(1)(1) 2023 (2) TMI 469 - BOMBAY HIGH COURT has held that an active PAN of a non-existent company cannot create an exception in favour of the revenue to dilute in any manner the principles enunciated by the following judgments Saraswati Industrial Syndicate Ltd. 1990 (9) TMI 1 - SUPREME COURT Spice Entertainment Ltd . 2011 (8) TMI 544 - DELHI HIGH COURT and Maruti Suzuki India Ltd. 2019 (7) TMI 1449 - Supreme Cour Considering the facts of the present case on the touchstone of the aforestated well settled propositions of law therefore the Order of assessment u/s 143(3) dated 28th September 2022 and consequential notices u/s 156 270A 271AAC(1) issued in the name of a non-existent entity are void.

Summary

Issues:
The judgment involves the quashing of an assessment order and related notices issued in the name of a non-existent company following an amalgamation.

Details:
The petitioner sought the quashing of the assessment order under section 143(3) along with notices of demand and penalty proceedings issued in the name of a non-existent company post-amalgamation.

The petitioner had amalgamated with another company as per the NCLT order, which was communicated to the authorities. Despite repeated communications regarding the amalgamation, the assessment order and notices were issued in the name of the non-existent company.

The Respondents did not dispute the knowledge of the amalgamation and the information received regarding the same.

Referring to previous judgments, the Court held that an active PAN of a non-existent company cannot dilute the legal principles regarding amalgamation. The Court cited judgments emphasizing that once amalgamation is notified to the authorities, any proceedings in the name of the non-existent entity would render the order void.

Based on established legal principles, the Court declared the assessment order and related notices issued in the name of the non-existent entity as void.

The Writ Petition was allowed, setting aside the impugned assessment order and related notices. The Respondents were given the liberty to issue fresh notices in compliance with the law.