2021 (6) TMI 109 - HC - Income Tax

Reopening of assessment u/s 147 - HELD THAT - The relief claimed in the writ petition is pivoted on the fact that Elegant Real Tech Private Limited, amongst other entities, stood merged with the petitioner, and that the amalgamation scheme filed in that behalf has received the seal of approval by this Court 2016 (4) TMI 1408 - DELHI HIGH COURT The petitioner claims that since Elegant Real Tech Private Limited ceased to exist upon the approval of the amalgamation scheme, the impugned notice could not have been issued qua the said entity. As, perhaps, for this reason, the respondent/revenue has taken a stand before us that it would drop the proceedings against Elegant Real Tech Private Limited, with liberty to initiate/continue the proceedings against the petitioner, as per law.

Summary

Issues:
1. Exemption from filing court-fee, attested affidavits, and vakalatnama
2. Stay on the operation of the impugned show cause notice under Section 148 of the Income Tax Act, 1961

Analysis:

Issue 1: Exemption from filing court-fee, attested affidavits, and vakalatnama
The petitioner sought exemption from filing the requisite court-fee, attested affidavits, and vakalatnama along with the writ petition. The court allowed the application subject to exceptions. The petitioner was directed to place on record the attested affidavits, vakalatnama, and deposit the court-fee within three days of the court resuming normal work patterns. This decision was made in CM APPL. 17130/2021.

Issue 2: Stay on the operation of the impugned show cause notice
In W.P.(C) 5521/2021 and CM APPL. 17128/2021, the petitioner filed an application seeking a stay on the operation of the impugned show cause notice issued under Section 148 of the Income Tax Act, 1961. The notice was dated 30.03.2021 and related to the assessment year 2015-2016. The petitioner argued that Elegant Real Tech Private Limited, which was the subject of the notice, had merged with the petitioner, and the amalgamation scheme had been approved by the court. The respondent/revenue informed the court that the proceedings against Elegant Real Tech Private Limited had been dropped. The respondent indicated the intention to proceed against the petitioner. The court noted the approval of the amalgamation scheme and the cessation of Elegant Real Tech Private Limited, leading to the closure of the writ petition. The respondent was granted liberty to initiate or continue proceedings against the petitioner as per the law. The statement of the senior standing counsel was recorded, and the writ petition was closed, along with the pending application.

In conclusion, the court granted exemption for filing court documents in one application and closed the writ petition regarding the stay on the show cause notice after considering the merger and approval of the amalgamation scheme, leading to the cessation of one entity and the continuation of proceedings against the petitioner.