2022 (8) TMI 142 - HC - Income Tax

High Court restrains conclusion of Income Tax Act Section 148 proceedings post company amalgamation

The High Court issued an interim order stating that proceedings under Section 148 of the Income Tax Act against a company amalgamated into another company ... Reopening of assessment u/s 147 against company amalgamated - submission of petitioner that the respondent could not have initiated proceedings under Section 148A against the company which stood amalgamated into another company - HELD THAT:- As relying upon the several decisions of the Hon’ble Supreme Court in the Case of Maruti Suzuki India Limited [2019 (7) TMI 1449 - SUPREME COURT] M/s. Spice Enfotainment LTD. [2017 (12) TMI 754 - SC ORDER] and Dharmnath Shares and Services PVT. LTD. [2018 (12) TMI 606 - SC ORDER] and the various High Courts’ judgments, we are inclined to pass an interim order to the effect that the proceeding initiated under Section 148 of the Act of 1961 shall not be brought to its logical conclusion and final order shall not be passed without leave of the Court. Issues Involved:Interpretation of Section 148A of the Income Tax Act, 1961 in cases of company amalgamation.Analysis:The High Court considered the issue of whether proceedings under Section 148A of the Income Tax Act, 1961 could be initiated against a company that had been amalgamated into another company by orders of the High Court under the Companies Act. The petitioner argued that such proceedings were not valid, citing decisions of the Hon'ble Supreme Court and various High Courts. The Court, taking into account the submissions, decided to issue an interim order. The order stated that proceedings initiated under Section 148 of the Act shall not be concluded, and a final order shall not be passed without the Court's permission.This judgment reflects the Court's interpretation of the law regarding the initiation of income tax proceedings against companies that have undergone amalgamation. The Court's reliance on previous decisions of the Hon'ble Supreme Court and other High Courts indicates a thorough analysis of legal precedents in reaching its decision. By granting an interim order to halt the ongoing proceedings until further review, the Court aims to ensure that the rights of the parties involved are protected and that the legal process is followed correctly.The reference to specific cases such as Pr. Commissioner of Income Tax, New Delhi Versus Maruti Suzuki India Limited and C.I.T. New Delhi Versus M/s. Spice Enfotainment LTD. demonstrates the Court's consideration of relevant precedents in tax law. By emphasizing the need for leave of the Court before concluding the proceedings initiated under Section 148 of the Income Tax Act, the judgment seeks to maintain the integrity of the legal process and uphold the principles of natural justice.Overall, the judgment provides clarity on the applicability of tax proceedings in cases of company amalgamation and establishes a framework for ensuring procedural fairness and adherence to legal requirements in such situations. The Court's decision to issue an interim order reflects a balanced approach to safeguarding the interests of the parties involved while upholding the rule of law.