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2023 (3) TMI 525 - HC - Income TaxReopening of assessment u/s 147 - Notice in the name of company amalgamated - HELD THAT - After issuance of the notice under section 148 A(b), the petitioner herein, in the objections to the reopening, did not specifically highlight the factum of amalgamation of M/s. Pinkhem Investment Co. Pvt. Ltd. which led to the passing of the order under section 148A(d) of the Act and subsequent notice under section 148 of the Act, yet, in our opinion, the same would not preclude the petitioner from challenging the validity of the notice under section 148 on the aforementioned ground, keeping in view the ratio of the judgment in the case of Maruti Suzuki India Ltd. 2019 (7) TMI 1449 - SUPREME COURT that participation in the proceedings would not operate as an estoppel against law, based upon the settled legal principle that the amalgamating entity had ceased to exist upon the scheme of amalgamation being approved. The petition is allowed. The impugned notice under section 148 AND the impugned order under section 148A(d) and all proceedings connected thereto are hereby quashed.
Issues:
The judgment involves the challenge to a notice issued under section 148 of the Income Tax Act, 1961, relevant to the assessment year 2013-14 on the ground that it was issued in the name of a non-existent company. Summary: The petitioner challenged the notice issued under section 148 of the Income Tax Act, 1961, relevant to the assessment year 2013-14, contending that it was issued in the name of a non-existent company, M/s. Pinkhem Investment Co. Pvt. Ltd., which had amalgamated with another company and ceased to exist. The petitioner had previously communicated the fact of amalgamation to the Assessing Officer. Despite this, a notice under section 148 was issued against the non-existent company. The petitioner argued that the re-assessment proceedings were unsustainable in law due to the company's amalgamation and non-existence. The court noted that the amalgamation of M/s. Pinkhem Investment Co. Pvt. Ltd. with another company had been approved by the court, and the former ceased to exist from the effective date of amalgamation. Referring to legal principles established in previous judgments, the court emphasized that once a company ceases to exist due to amalgamation, any proceedings initiated against it become untenable. The court cited the case of Saraswati Industrial Syndicate Ltd. v/s. CIT and the judgment in Spice Entertainment Ltd. v/s. CST, highlighting that proceedings against a non-existing company render any resulting order void. In light of the legal principles and precedents, the court allowed the petition, quashing the impugned notice under section 148 dated 31st July 2022, the order under section 148A(d) of the Act, and all connected proceedings. The court held that the petitioner's participation in the proceedings did not preclude them from challenging the validity of the notice based on the non-existence of the amalgamated company.
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