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TMI Blog2023 (2) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... the very officer who after three years of such amalgamation has issued notice which is impugned in the name of that company, which no longer existed on 30.03.2021 for the A.Y. 2016-17 and therefore, the grievance on the part of the petitioner requires to be sustained and the action of the respondent authority warrants interference. Income-tax Department had already been issued the notice by this Court at the time of considering the request for approving the scheme of amalgamation, however, that would in no manner absolve any party of its obligation to intimate the final order of amalgamation, as is otherwise expected under the law. The statute since has not provided any format nor has any specified format otherwise prescribed this intimation in response to the notice under Section-142 of the Income Tax Act should be construed as a sufficient compliance and hence, all the petitions deserve to be allowed, quashing and setting aside the show-cause notices with consequential reliefs. - HONOURABLE MS. JUSTICE SONIA GOKANI AND HONOURABLE MR. JUSTICE SANDEEP N. BHATT Appearance: For the Petitioner(s) No. 1 : Mr B.S. Soparkar (6851) For the Respondent(s) No. 1,2 : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed to comply with the applicable provisions of the Income Tax Act and considering over all the facts and circumstances couple with all the documents presented before this Court, this Court concluded that the Scheme of Amalgamation put for before it is in the interest of the shareholders and creditors as well as in the Public Interest and is accordingly deserving the sanction. Therefore, had allowed all the petitionss with the following order:- 10. Prayers in terms of paragraph 16(a) of the Co. Petitions No. 235, 236 and 237 of 2016 are hereby granted. 11. The petitions are disposed of accordingly. So far as the costs to be paid to the Central Govt. Standing Counsel is concerned, I quantify the same at Rs. 7,500/- per petition. The same may be paid to the learned Standing Counsel appearing for the Central Govt. Costs to be paid to the Office of the Official Liquidator is quantified at Rs. 7,500/- per petition payable only by the Transferor Companies. The same may be paid to the Office of the Official Liquidator. 12. The petitioner companies are further directed to lodge a copy of this order, the detailed schedule of immovable assets of the Transferor Companies as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be granted in the interest of justice; (e) to provide for the cost of this petition. 4.5 This Court issued the notice on 24.01.2022 by following order [Coram: Mr. Justice J.B. Pardiwala (As His Lordships Then was) And Ms. Justice Nisha .M. Thakore]:- 1. We have heard Mr. Bandish Soparkar, the learned counsel appearing for the writ applicant. 2. The subject matter of challenge in the present writ application is to the notice issued by the respondent No.1 under Section 148 of the Income Tax Act, 1961 directing the writ applicant to furnish the returns of income for the A. Y. 2016-17. To put it in other words, the Revenue is contemplating to reopen the assessment for the A. Y. 2016-17. 3. Mr. Soparkar pointed out that two companies namely Kaizen Stocktrade Pvt. Ltd. and Kaizen Finstock Pvt. Ltd. got amalgamated into the writ applicant company by an order dated 5th August 2016. He further pointed out that the assessment order under Section 143(3) of the Act also came to be passed in the case of the writ applicant dated 4th December 2018 after considering the income of the writ applicant as well as the two companies which got merged with the writ applicant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate venture continues, enfolded within the new or the existing transferee entity. Therefore, it is urged that it is essential to look beyond the mere concept of destruction of corporate entity. He also further pointed out that a manner of intimation also should have been different to the decision as well as the change which has been brought subsequently of-course inserted in Income-tax Act 2022 w.e.f.01.04.2022. 9. Mr. Varun Patel, learned senior standing counsel submitted that for the purpose of explaining as to how the insertion of provision of Sub-section 2A of Section 170 has also permitted the assessment or re-assessment or any other proceedings where there is a succession. During the course of pendency of such succession is brought to our notice by learned counsel. However, as fairly said that this is not applicable in case of the present petitioner; this also does not in any manner specify the manner of intimation to the authority concerned. There is no format given nor is it specified as to whether within what time the intimation is to be given, but in the instant case, almost after two years, such intimation has been given and the assessment had also taken place in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which, as aforesaid, had long back got amalgamated with the petitioner vide order dated 18th June, 2015 passed by this court and thus, it had ceased to have its own existence so as to render it amenable for the reassessment proceedings under the provisions of section 147 of the Act. Moreover, the respondent and the department were duly informed by the petitioner about the amalgamation and despite the said factum having been brought to the notice of the respondent, statutory notice under section 148 came to be issued to Gayatri Integrated Services Private Limited for reopening the assessment on the ground that the respondent has reason to believe that income chargeable to tax for the assessment year 2012-13 has escaped the assessment within the meaning of section 147 of the Act. 9. The controversy in the present petition, is no longer res integra. The Apex Court in the case of Principal Commissioner of Income Tax vs. Maruti Suzuki India Limited (supra), in paragraph 33, has categorically held that if the company has ceased to exist as a result of the approved scheme of amalgamation then in that case, the jurisdictional notice issued in its name would be fundamentally illegal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and seizure operations have taken place and statements were recorded by the revenue of the Directors and Managing Director of the group. A return was filed, pursuant to notice, which also suppressed the factum of amalgamation; on the contrary, the return was filed by MRPL the company which has ceased to be in existence, and yet, the appeals were filed on behalf of it before the Commissioner and a cross appeal was filed before the Tribunal. An affidavit before the court was also on behalf of the Director of MRPL and the assessment order had attributed the specific amounts surrendered by MRPL and that too, after considering the special auditor s report, bringing specific amounts to tax in the search assessment order. 14. All these according to the Court indicated that the order adopted a particular method of expressing the liability and it opined that the conduct of the assessee commencing from the date the search took place, and before all forums, reflected that it consistently held itself out as the assessee. It was held that the corporate death of an entity upon amalgamation perse invalidate the assessment order ordinarily cannot be determined on a bare application of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable. 32. The court, undoubtedly noticed Saraswati Syndicate. Further, the judgment in Spice (supra) and other line of decisions, culminating in this court s order, approving those judgments, was also noticed. Yet, the legislative change, by way of introduction of Section 2(1A), defining amalgamation was not taken into account. Further, the tax treatment in the various provisions of the Act were not brought to the notice of this court, in the previous decisions. 33. There is no doubt that MRPL amalgamated with MIPL and ceased to exist thereafter; this is an established fact and not in contention. The respondent has relied upon Spice and Maruti Suzuki (supra) to contend that the notice issued in the name of the amalgamating company is void and illegal. The facts of present case, however, can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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