Re-assessment Order Nullified: Notice Served on Non-Existent Company Post-Merger Deemed Invalid.

The HC set aside the re-assessment order dated 29.3.2022 under Sections 147 and 148 of the Income Tax Act 1961, due to lack of jurisdiction. The re-assessment notice was invalid as it was served on the transferor company, which ceased to exist following its merger with another company. The court found the re-assessment proceedings conflicted with the original assessment and failed to consider the merger, rendering the notice defective. The petitioner was not required to seek alternative remedies, and the revenue was instructed to proceed according to law, considering the judgment's observations.

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Issues:
Challenge to re-assessment order under Sections 147 and 148 of the Income Tax Act 1961 regarding alleged escaped income. Jurisdictional issues arising from merger of two companies. Validity of re-assessment notice and order. Conflict between original assessment and re-assessment. Lack of jurisdiction in re-assessment proceedings.

Analysis:

1. The judgment concerns a challenge to a re-assessment order dated 29.3.2022 under Sections 147 and 148 of the Income Tax Act 1961, involving alleged escaped income of Rs. 189,15,91,521 by M/s Kanpur Builders Pvt. Ltd. The re-assessment was based on information from a property transaction.

2. A key issue raised was the jurisdictional aspect due to the merger of two companies, M/s Kanpur Builders Pvt. Ltd. and M/s Kanpur Constructions Pvt. Ltd. The merger was approved by a court order with effect from 1.4.2014, impacting the assessment for A.Y. 2015-16.

3. The petitioner argued that the re-assessment notice was served on the transferor company, which was no longer in existence post-merger. The re-assessment proceedings lacked jurisdiction as the notice was not served on the present petitioner.

4. The assessing authority of the transferee company had already completed the assessment for A.Y. 2015-16, considering the merger and property sale. The re-assessment notice against the transferor company conflicted with the original assessment order for the same year.

5. The Court emphasized that reassessment proceedings must arise from a valid assumption of jurisdiction. As the transferor company ceased to exist post-merger, the re-assessment notice against it lacked jurisdiction, supporting the petitioner's case.

6. The Court highlighted that the assessing authority failed to consider the merger and original assessment order in issuing the re-assessment notice, rendering it inherently defective and without jurisdiction.

7. The judgment concluded that the re-assessment order against the transferor company lacked jurisdiction and was set aside. The petitioner was not required to seek alternative remedies due to the lack of inherent jurisdiction in the re-assessment proceedings.

8. The revenue was directed to proceed in accordance with the law, considering the provisions of Section 150 of the Act and the observations made in the judgment regarding the lack of jurisdiction in the re-assessment process.

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