Invalid Notice under Income Tax Act; Writ of Certiorari Quashes Order

The High Court found that issuing a notice under Section 148 of the Income Tax Act to a non-existing company was bad in law. The order rejecting objections for the Assessment Year 2014-2015 was deemed invalid. The court granted the petition, issuing a Writ of Certiorari to quash the notice and order. The Principal Chief Commissioner was directed to conduct an inquiry against the officers responsible for the erroneous notices. The inquiry was to be completed within six weeks, with necessary actions to be taken against the officers. The petition was disposed of accordingly.

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Issues:
Impugning order rejecting objections for Assessment Year 2014-2015 under Section 148 of the Income Tax Act due to notice issued to a non-existing company.

Analysis:
The petitioner challenged an order dated 4th December 2019, which rejected objections raised for the Assessment Year 2014-2015 under Section 148 of the Income Tax Act. The main ground of challenge was that the notice was issued to a non-existing company. The petitioner argued that as per previous court judgments, including one by the Apex Court and a recent one by the High Court, such notices are bad in law. The petitioner provided evidence of amalgamation between Vadinar Power Company Limited and the petitioner, formerly known as Essar Oil Limited. Despite clear notifications of the amalgamation, the respondents continued to issue notices to the non-existing company, Vadinar Power Company Limited. The petitioner repeatedly informed the authorities about the amalgamation, even providing details of the merged entity, Nayara Energy Limited. However, the notices and the order rejecting objections were consistently issued in the name of the non-existing company, Vadinar Power Company Limited.

The High Court found that issuing a notice under Section 148 of the Income Tax Act to a non-existing company was indeed bad in law. Therefore, the order rejecting objections was also deemed invalid. The court allowed the petition and issued a Writ of Certiorari to quash the notice dated 31st March 2019 and the order dated 4th December 2019. Additionally, the Principal Chief Commissioner was directed to conduct an inquiry against the officers responsible for continuing to issue notices in the name of the non-existing company despite being informed of the amalgamation. The inquiry was to be completed within six weeks, and necessary action was to be taken against the erring officers. A copy of the order was to be sent to relevant authorities for information and further action. The petition was disposed of based on the above findings and directions.

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