Court declares notice to non-existing company under Income Tax Act invalid. Writ of Certiorari issued for cancellation. The court found the notice issued under Section 148 of the Income Tax Act to a non-existing company as legally flawed. The petition was allowed, and the ...
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Court declares notice to non-existing company under Income Tax Act invalid. Writ of Certiorari issued for cancellation.
The court found the notice issued under Section 148 of the Income Tax Act to a non-existing company as legally flawed. The petition was allowed, and the notice and order were quashed. A Writ of Certiorari was issued under Article 226 of the Constitution of India, leading to the cancellation of the notice and order. No costs were awarded in the disposition of the petition.
Issues: Challenge to notice under Section 148 of the Income Tax Act, 1961 due to issuance to a non-existing respondent company.
Analysis: The petitioner sought to set aside a notice dated 31st March 2019 and an order dated 13th September 2019 issued under Section 148 of the Income Tax Act, 1961. The petitioner contended that the notice was served on a non-existing respondent company, as the company had undergone mergers resulting in its dissolution. It was argued that the notice was legally invalid based on precedents, including the case of Principal Commissioner of Income Tax, New Delhi Vs. Maruti Suzuki India Ltd. The petitioner highlighted that the company in question had ceased to exist due to mergers approved by the National Company Law Tribunal. The Assistant Commissioner of Income Tax had also issued an order against the petitioner, recognizing the merger and change in entity. Despite this knowledge, the respondents proceeded with the notice to the non-existent company. The respondents claimed it was a clerical error, but the court disagreed, emphasizing the awareness of the merger orders. The court agreed with the petitioner's position, citing the Maruti Suzuki India Ltd. case, and declared the notice to the non-existing company as legally flawed.
The court found that the notice issued under Section 148 of the Act to a non-existing company was indeed invalid in law. Consequently, the petition was allowed, and the impugned notice and order were quashed and set aside. The court issued a Writ of Certiorari under Article 226 of the Constitution of India to examine the legality of the notice and order, leading to their cancellation. The petition was disposed of with no order as to costs.
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