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2023 (10) TMI 1038 - HC - Income TaxValidity of reassessment notice in the name of the non-existing Company - scheme of amalgamation approved - HELD THAT - We are of the considered view that the present is also the case which squarely stands covered by the decision of Maruti Suzuki (India) Limited 2019 (7) TMI 1449 - SUPREME COURT and the recent decision of the High Court of Bombay in the case of CLSA INDIA (P) LTD. 2023 (2) TMI 469 - BOMBAY HIGH COURT and the earlier judgment of Spice Infotainment 2011 (8) TMI 544 - DELHI HIGH COURT The present Writ Petition deserves to be and is accordingly allowed, holding that the notice issued Section 148A(d) of the Act and the consequential notice of the same date under Section 148 of the Act, both being bad in law, are set aside, as the entire proceedings itself is against a non-existing Company - Decided in favour of assessee.
Issues involved:
The judgment deals with the legality of a notice issued under Section 148A(d) of the Income Tax Act, 1961, against a company that had been dissolved due to amalgamation, and the subsequent challenge to the notice. Summary: The petitioner challenged an order passed by the Income Tax Officer, issuing a notice under Section 148A(d) of the Income Tax Act, 1961, for the assessment year 2016-2017 against a company that had been dissolved through amalgamation. The High Court had approved the scheme of amalgamation, resulting in the dissolution of the transferor company and its merger with the transferee company. Despite the dissolution of the transferor company, a notice was issued against it for alleged income escapement. The petitioner objected to the notice, citing that the dissolved company no longer existed. The respondent authorities proceeded with reassessment despite the objections raised by the petitioner. The petitioner contended that initiating proceedings against a non-existing company post-amalgamation is impermissible under the law, citing a Supreme Court decision in a similar case. The petitioner argued that once a company is merged, the transferor company ceases to exist, and only the transferee company remains. The respondent authorities were criticized for issuing a notice to a non-existing company and disregarding the amalgamation. In response, the Income Tax Department argued that the petitioner failed to inform the authorities of the amalgamation, thereby keeping the companies legally in existence. They maintained that the notices were valid, and the petitioner could raise objections during the proceedings. The Department emphasized the necessity of obtaining a No Objection Certificate for amalgamation approval and the lack of communication regarding the amalgamation. The High Court, after considering the arguments, referred to a Supreme Court decision and previous judgments, including one from the High Court of Delhi. It concluded that any proceedings against an amalgamated company are null and void in the eyes of the law. The Court highlighted the importance of consistency and certainty in tax litigation, dismissing the appeal and setting aside the notices issued against the dissolved company. The judgment aligned with previous decisions, ensuring adherence to legal principles regarding amalgamated companies. Ultimately, the High Court allowed the writ petition, declaring the notices issued under the Income Tax Act as invalid and setting them aside due to the dissolved company's non-existence. The Court emphasized that the entire proceedings were against a non-existing entity and closed any pending petitions. End of Summary
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