Court quashes illegal tax notice post-amalgamation, emphasizes communication sufficiency.

The court allowed the petition, quashing the notice issued under Section 148 of the Income Tax Act to the amalgamated company. The court emphasized that once a company ceases to exist due to amalgamation, it cannot be subject to assessment proceedings, rendering any notice issued in its name fundamentally illegal. The court highlighted that the communication provided by the petitioner regarding the amalgamation was deemed sufficient, and the notice was set aside. The court clarified that this decision does not prevent the respondents from taking lawful action against the petitioner.

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Issues Involved:
1. Validity of notice issued under Section 148 of the Income Tax Act, 1961 to an amalgamated company.
2. Compliance with the intimation requirements post-amalgamation.
3. Legal consequences of issuing a notice to a non-existent entity.

Issue-wise Detailed Analysis:

1. Validity of notice issued under Section 148 of the Income Tax Act, 1961 to an amalgamated company:
The petition challenges the notice issued under Section 148 of the Income Tax Act, 1961, to Satya Sai Agroils Pvt. Ltd., which had already amalgamated into the petitioner company. The court referenced the decision in CIT Vs. Maruti Suzuki Ltd., which established that a notice issued to a non-existent entity due to amalgamation is fundamentally illegal and without jurisdiction. The court reiterated that once a company ceases to exist due to amalgamation, it cannot be subject to assessment proceedings. The judgment emphasized that the amalgamating entity ceases to exist upon the approved scheme of amalgamation, rendering any notice issued in its name fundamentally at odds with legal principles.

2. Compliance with the intimation requirements post-amalgamation:
The petitioner had informed the respondents about the amalgamation through a letter dated 25.02.2016 and again during the response to a notice under Section 142(1) of the Income Tax Act for the Assessment Year 2016-17. The court noted that there is no specific format prescribed for such intimation, and the communication provided by the petitioner was deemed sufficient. The court highlighted that the intimation given in response to the notice under Section 142 should be construed as adequate compliance.

3. Legal consequences of issuing a notice to a non-existent entity:
The court discussed the implications of issuing a notice to a non-existent entity. Citing the Supreme Court's decision in Principal CIT Vs. Maruti Suzuki Ltd., it was held that the jurisdictional notice issued in the name of a non-existent company is fundamentally illegal and without jurisdiction. The court also referenced the case of Gayatri Microns Ltd. Vs. Assistant Commissioner of Income-tax, where a notice issued under Section 148 to a non-existent entity was deemed fundamentally illegal. The court reiterated that upon amalgamation, the transferor company ceases to exist and cannot be subjected to assessment proceedings.

Conclusion:
The court allowed the petition, quashing and setting aside the impugned notice under Section 148 issued by the respondent. The court emphasized that the actions of the respondent authority regarding the issuance of the notice deserved interference. The judgment clarified that this does not preclude the respondents from initiating action against the present petitioner in accordance with the law. The court also noted the advancement in technology and the availability of materials in e-mode, suggesting that lack of inter-departmental coordination or non-application of mind to available materials should not be grounds for holding non-service of the intimation. The petition was disposed of in these terms.

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