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TMI Blog2016 (8) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... not file the return. Thus, for the period of ten years nothing was turned up and suddenly the notice was issued, which in the opinion of this Court is bad in law. The act of reopening of notice is not within the period of limitation. The petitions deserve to be allowed and the same are allowed. The impugned notice dated 09/03/2005 (ExhibitB to the petition) issued under Section 10 of the Interest Act, 1974 by the respondent is hereby quashed and set aside. Rule is made absolute. - SPECIAL CIVIL APPLICATION NO. 24566 of 2005 WITH SPECIAL CIVIL APPLICATION NO. 2483 of 2006 WITH SPECIAL CIVIL APPLICATION NO. 2499 TO 2500 of 2006 - - - Dated:- 1-8-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE PETITIONER : MR MANISH J SHAH, ADVOCATE FOR THE RESPONDENT : MR SUDHIR M MEHTA, ADVOCATE COMMON ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) Since the common issue involved in this group of petitions, they are being heard and decided by this common oral judgment. 1.1 By way of this writ petitions, the petitioners have challenged the notice dated 09/03/2005 issued under Section 10 of the Interest Act, 1974 issued by the respondent. 2. The sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was therefore time barred and therefore the said notice deserves to be quashed and set aside. 3.2 Learned Counsel for the petitioner has also contended that the requirement of the provisions of Section 2(5A) read with Section 2(5B) of the Act are not fulfilled and therefore also the impugned notice may be quashed set aside. 3.3 Learned Counsel for the petitioner has also contended that the petitioner had already filed letter dated 28/11/1995 to the respondent pointing out that the petitioner was not liable under the Act, however the same was not considered and therefore also the impugned notice may be quashed and set aside. 3.4 In support of his submissions, learned Counsel for the petitioner has relied upon a decision of this Court in case of Khurana Engineering Ltd. v. Deputy Commissioner of Income-Tax (OSD) [2014] 364 ITR 600 (Guj) and relied upon paragraphs No.6 to 8 which reads thus: 6. Having heard the learned counsel for the parties, it emerges from the record that the transferor company had merged in transferee company with effect from 1.4.09. The High Court did not provide for any modification in the appointed date as envisaged in the merger scheme its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, of the opinion that the notices issued by the Income-Tax Officer (impugned in the writ petition) were not warranted in law. The business carried on by the Transferor Company (Subsidiary Company) should be deemed to have been carried on for and on behalf of the Transferee Company. This is the necessary and the logical consequence of the Court sanctioning the scheme of amalgamation as presented to it. The order of the Court, sanctioning the scheme, the filing of the certified copies of the orders of the Court before the Registrar of Companies, the allotment of shares etc. may have all taken place subsequent to the date of amalgamation/transfer, yet the date of amalgamation in the circumstances of this case would be January 1, 1982 . This is also the ratio of the decision of the Privy Council in Raghubar Dayal, v. Bank of Upper India Ltd., AIR 1919 PC 9. Counsel for the Revenue contended that if the aforesaid view is adopted then several complications will ensue in case the Court refuses to sanction the scheme of amalgamation. We do not see any basis for this apprehension. Firstly, an assessment can always be made and is supposed to be made on the Transferee Company tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the date on which the amalgamation/transfer takes effect. 18. In Marshall Sons Co. (India) Ltd. v. Income-Tax Officer [1997] 223 ITR 809 (SC), the Supreme Court held that every scheme of amalgamation has to necessarily provide a date with effect from which the amalgamation/transfer shall take place. The court further observed that it is W.P. (C) Nos. 1289/1999, 1290/1999, 1291/1999, 1292/1999 1293/1999 Page 9 of 13 also open for a court to modify the appointed date as it thinks appropriate in the facts and circumstances of the case but in a case where the court does not do so, the date as specified in the scheme would be the date on which the amalgamation would take effect. In that case, the Supreme Court was considering a challenge to the notices issued by the Income Tax Officer to the amalgamating company for the period after the appointed date of amalgamation. After examining the provisions of the Companies Act, 1956, the Supreme Court held that the notices issued by the Income Tax Officer were not warranted in law. 19. In a recent decision dated 3rd August, 2015 in ITA No. 475/2011 (SPICE Infotainment Ltd. v. Commissioner of Income Tax), this Court set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... underlying reason for that is that instances of concealed income or other income escaping assessment in a large number of cases come to the notice of the Income-Tax authorities after the assessment has been completed. The provisions of the Act in this respect depart from the normal rule that there should be, subject to right of appeal and revision, finality about orders made in judicial and quasijudicial proceedings. It is, therefore, essential that before such W.P. (C) Nos. 1289/1999, 1290/1999, 1291/1999, 1292/1999 1293/1999 Page 11 of 13 action is taken the requirements of the law should be satisfied. 22. It is also relevant to mention that the assessment order dated 27 th March, 1997 for the Assessment Year 1994-95, which formed the basis for initiation of reassessment proceedings and issuance of impugned notices, was set aside by Commissioner of Income Tax (Appeal). The Petitioner had contested the AO ‟ s finding that the transaction of purchase and lease of moulds in the year 1993-94 relevant to assessment year 1994-95 was a sham transaction. The Assessee had also relied on the proceedings filed by the lessee (M/s Prestige HM Polycontainers Ltd. and Others) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d notice is time barred and against the settled proposition of law and therefore the same may be quashed and set aside. 4. On the other hand learned Counsel Mr.Sudhir Mehta for the department has contended that there is no infirmity in the impugned notice and he has taken us to the reply as well as the notice and contended that the notice issue was within the time limit and this Court may not interfere with the same. 5. Having heard the learned Counsel for the respective parties and having gone through the impugned notice as well as the reply of the petitioner, this Court is of the opinion that the notice issued upon the petitioner is bad in law; inasmuch as, the petitioner had also addressed a letter dated 28/11/1995 to the respondent informing that since the petitioner is not a credit institution, it is not liable to interest tax. Reliance placed upon a decision in case of Khurana Engineering Ltd. (supra) is also relevant for this purpose because as held therein after the date of amalgamation of the company, the transferor-company is no more in existence on the date of issuance of notice and therefore the said notice issued upon the said company held to be invalid. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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