Companies in tax matters correct name and address is relevant for enquiry, notices.Enquiry not about correct party and in wrong name can vitiate proceeding.Current name, address need to be found out.

Companies in tax matters correct name and address is relevant for enquiry, notices Enquiry not about correct party and in wrong name can vitiate proceeding. Current name, address need to be found out.

Companies' names:

Companies are incorporated with a name. The name can be changed by following and complying with procedure prescribed, as applicable, from time to time under relevant provisions of Corporate Laws including the Companies Act, 2013 and relevant regulations and notifications.

Names can be changed due to change of main shareholders, change in main business, change in geographical area of operations, and many more such reasons.

There can also be changes in name under some circumstances e.g. on order of Central Government, in case of restructuring of companies, on change in constitution of company like on conversion of company from private to limited or from limited to private limited. These are only illustrations.

Similar names:

Similar names as name of existing company is not allowed while incorporation and also during course of change of name. However, still we find that some names may include some common parts, common indicative promoters etc. In old days facility of searching and comparing names was not computerised and all offices of ROC in different states have limited resources to compare any proposed name with names of existing companies. At that time some companies were incorporated with almost similar names just with some minor difference.

Address of company:

Each company must have an address of its Registered Office (RO). Besides a company can have address of its other branches and offices. Address of RO must be displayed on all letter heads, name plates etc. Including in case of branch and other office address and letter head.

Outsiders can use address of dealing branch / office:

Outsiders who have dealing with any branch or office, usually use the address of concerned branch with which he have dealing. It is not usual practice to write address of RO, besides address of concerned branch. Only when it comes to take a legal course of action, that address of RO of company may also be mentioned with address of concerned branch with which any party had dealing.

Address at the time of transaction is relevant for transaction verification and in case of change in address, new address is relevant for enquiry:

Address at the time of transactions is relevant. A company might have changed address subsequently. Therefore, based on enquiry at old address ( at time of transaction) if company is not found at the old address, at the time of enquiry, then an enquiry about current address is required. It is easy as we find website of MCA and many other websites, which provide information about companies.

We live with a perception that a company has perpetual existence and succession. Life of a company can come to an end only under process of law on its liquidation.

Websites - Now-a-days companies who have substantial business and large contacts with customers and suppliers / vendors and public interest have their own websites. Many have arrangements with search websites for particular business.

A search with name of company on any standard search engine can also provide some information ( old and new both) about any company.

Therefore, if a tax authority who is enquiring about transactions which took place some years ago, find that the company is not existing on the address given / used at that time of transactions, then it becomes necessary to enquire about current address of company.

Recent case before the Supreme Court:

Assistant Commissioner of Income Tax Central Circle 30 & Anr. Versus Vivo Mobile India Private Limited - 2026 (3) TMI 1505 - SC Order

Vivo Mobile India Private Limited Versus Assistant Commissioner of Income Tax & Anr. - 2025 (2) TMI 775 - DELHI HIGH COURT

The matter related to reassessment proceedings.

In enquiry by the AO name of other party with which transactions were alleged to be bogus was given as M/s. Zhongmao (India) Eng. Pvt. Ltd.

Assessee informed that assessee had no transaction with above named company.

Furthermore, assessee also informed that it had transactions with another company named M/s. Zhonghua (India) Eng. Pvt. Ltd.

Then assessee did not receive any notice from AO, for enquiry about transactions carried by it with company named M/s. Zhonghua (India) Eng. Pvt. Ltd .

Rather the AO had issued Clarificatory Letter dated 22.08.2024 noting the correction in the name of the entity as M/s. Zhonghua (India) Eng. Pvt. Ltd. And that the said company had not responded to the summons under Section 131 (1A) and that apart it was further informed that during a physical verification at the time of pre search enquiries, no entity by the said name was found carrying out activities at 2F, Elegance, Mathura Road, Jasola, Delhi-110025. On that basis, the AO / Revenue concluded that M/s. Zhonghua (India) Eng. Pvt. Ltd. was a paper entity used for the purpose of accommodation entries by entities like M/s. OPPO Mobiles India Pvt. Ltd and the petitioner.

From information available in order / judgment it appears that revenue had not made attempt to enquire about present correct address of said company with whom assessee had transactions during financial year 2017-18 ( relevant to assessment year 2018-19).

There after, within ten days

The AO /Revenue had passed the impugned order under Section 148A (d) of the Act on 31.08.2024, concluding that a transaction amounting to Rs. 7,35,47,572/- shown as expenses being bogus purchases made during FY 2017-18 should be disallowed and would be liable to be added to the total income of the assessee for AY 2018-19 suggesting escapement of income of the aforesaid sum. Predicated on the said premise, the AO also issued the notice dated 31.08.2024 under Section 148 of the Act.

Observations

Thus we find that Ld. AO issued enquiry notice based on information received / found in High Risk CRIU/VRU information available on 'Insight Portal'. That enquiry was about alleged bogus transactions, apprehending that M/s. Zhongmao (India) Eng. Pvt. Ltd. After receipt of information from assessee that it had no transaction with said party, any notice was not given to enquire about transactions which assessee had with M/s. Zhonghua (India) Eng. Pvt. Ltd.

It seems in haste all formalities and procedures of approvals were complied with in mechanical manner and an order u.s. 148A (d) was passed and notice u.s. 148 was also issued.

Assessee challenged the said order and notice u.s. 148 by way of Writ Petition (WP).

Analyses of facts as can be ascertained from the judgment of High Court and observations of author are as follows:

• It is not disputed that the assessment proceedings for AY 2018-19 had concluded.

(observations - under which procedure assessment was concluded in not mentioned - it can be u.s. 143.1 or 143.3 that really does not make difference in the given case).

• the present proceedings initiated under Section 148A (b) of the Act was in respect of re-opening of the assessment proceedings.
• The show cause notice issued under Section 148A (b) of the Act was premised on accommodation entries in the form of bogus capital expenses from fictitious entity, namely M/s. Zhongmao (India) Eng. Pvt. Ltd., to the extent of Rs. 7,35,47,572.22/-

( observations - it was for alleged bogus capital expenditure. If it was for capital expenditure then reopening should be about depreciation claimed on such capital expenditure, if at all, because capital expenditure is capitalised and not claimed). Furthermore, information received was about M/s. Zhongmao (India) Eng. Pvt. Ltd with which assessee had not transactions at all.

• without issuing a further notice in respect of the alleged non-existence of the said entity at the Jasola address and calling for an explanation in that regard, the respondent/Revenue passed the impugned order under Section 148A (d) of the Act dated 31.08.2024.

(observations - when subject party was changed, the changed party was not named in relied on insight, the AO must have issued another notice, I at all he had information about new party informed by assessee and must have asked explanation from assessee to complete prior required enquiry about right party and transactions, that was not done).

• As per High Court this procedure is abject violation and infraction of the principles of natural justice, inasmuch as, the conclusion regarding the said entity being a non-existent bogus entity was never put to the petitioner in the show cause notice dated 09.08.2024 issued under Section 148A (b) of the Act. In other words, the petitioner was never afforded an opportunity to respond to the said allegation.
• Following rule laid down in M/s SAHARA INDIA (FIRM), LUCKNOW Versus CIT, CENTRAL-I & ANR - 2008 (4) TMI 4 - Supreme Court the High Court observed that It is trite that principles of natural justice inhere in all administrative and quasi judicial actions, particularly in taxing statutes, unless expressely barred by legislative intent.
• The Court referred and followed the view expressed in Grindlays Bank PLC. Versus Commissioner Of Income-Tax - 1990 (5) TMI 2 - CALCUTTA High Court and held to mean that ordinarily, after the closure of the assessment proceedings, the AO would be functus officio and to re-confer jurisdiction upon the AO to initiate re-assessment proceedings, relevant incriminating material ought to be put to the assessee before any such re-commencement can be sought.
• In the absence of relevant material being put to the assessee, it was deprived of a valuable opportunity to explain the existence or otherwise of the entity i.e. M/s. Zhonghua (India) Eng. Pvt. Ltd. Thus, on the aforesaid analysis, we find that the said infraction has deprived the petitioner of an opportunity to offer proper explanation.
• The High Cout thus ordered and set aside the impugned order under Section 148A (d) and the notice under Section 148 of the Act. Thereby allowed the WP preferred by the assessee.
• Furthermore, the High Court also held in para 12, as follows:

'12. The respondent/Revenue is at liberty, if so advised, to proceed in the matter afresh, albeit, in accordance with law.'

Observations - the High Court has not restrained the revenue to proceed in the matter afresh, albeit, in accordance with law.

It is not known whether the revenue also took some other course of action or not. However, it is known that the Revenue challenged the judgment of High court before the Supreme Court and the petition was dismissed.

Observations of the author about SLP of revenue are as follows:

There was a delay in filing of SLP, ( number of days of delay is not mentioned in the order) delay was condoned, and SLP was admitted and heard.

For the Petitioner (s) / Revenue the following counsels appeared:

1. Mr. N Venkataraman, A.S.G. [NP],
2. Mr. Sudarshan Lamba, AOR,
3. Mr. Padmesh Mishra, Adv.,
4. Mr. Madhav Singhal, Adv.,
5. Ms. Neelakshi Bhaduria, Adv., and
6. Mr. Gopi Chand, Adv.

Counsels on behalf of Revenue before High Court:

1. Mr. Shlok Chandra, sr. SC
2. Ms. Naincy Jain and
3. Ms. Madhavi Shukla, JSCs for Revenue.

Again a question arises that is why so many counsels are engaged by Revenue, to argue a case which is limited in scope of concerned few enactments only and is in fact a routine matter. Furthermore, any counsel who appeared before High Court on behalf of revenue did not appear before the Supreme Court. Therefore, before the Supreme Court it was entirely new team. Counsel who appeared before High Court was well verged with the matter could have easily represent before the Supreme Court also.

Is it not a brain drain?

Is it not a case of unmindful spending of public money.

On other hand we find that the assessee, did not engage any Advocate to appear. It seems that team of assessee was confident in this regard that the judgment of the High Court is speaking and well-reasoned, and correct. We find that before the High Court the following three counsels appeared on behalf of assessee:

1. Mr. Ajay Vohra, Sr. Advocate
2. Mr. Aditya Vohra,Advocate
3. Mr. Shashvat Damija, Advocate.

Therefore, it seems that assessee did not engage any counsel with due application of mind and saved his costs.

Companies in tax matters correct name and address is relevant for enquiry, notices Enquiry not about correct party and in wrong name can vitiate proceeding. Current name, address need to be found out.