Reopening notice challenge after demerger and dissolution failed to displace the Assessing Officer's power to examine liability.

A reopening notice under the Income-tax Act was challenged on the ground that the company had been demerged and later dissolved, but those events did not by themselves extinguish the tax authority's power to examine liability. The factual impact of the demerger, dissolution, and the assessment-year material had to be considered by the Assessing Officer in accordance with law. Because the writ court had only permitted the assessee to place further objections and had not finally decided the merits, the remand-type direction was treated as appropriate and the writ appeal was not interfered with.

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Issues: Whether the writ appeal challenging the order directing the assessee to raise further objections before the Assessing Officer against the notice issued under Section 148 of the Income-tax Act, 1961, and contending that dissolution or demerger of the company barred reassessment, deserved interference.

Analysis: The notice for reopening was issued on the basis of material relating to the assessment year in question, and the assessee's plea that the company had been demerged and later dissolved did not by itself nullify the taxing authority's power to examine liability. The factual position regarding the dissolved company, the demerger arrangement, and the effect of those events on the assessment had to be considered by the Assessing Officer in accordance with law. Since the writ court had not finally adjudicated the merits and had only granted liberty to place additional objections before the Assessing Officer, the direction was treated as a proper course.

Conclusion: The interference sought in the writ appeal was declined and the remand-type direction to the Assessing Officer was upheld.

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