Court quashes tax notice for non-existing entity, imposes personal cost on officer.

The High Court quashed the impugned notice issued under Section 148A(b) of the Income Tax Act, 1961, due to being issued in the name of a non-existing entity that had been previously amalgamated. The court criticized the assessing officer's conduct as reflecting a total lack of application of mind and non-compliance with earlier court orders. The court imposed a personal cost of Rs.20,000/- on the assessing officer and directed the recovery from his salary. Additionally, the court ordered communication of the judgment to the tax authorities for necessary action and compliance within the department.

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Issues:
Challenging impugned notice under Section 148A(b) of the Income Tax Act, 1961 for assessment year 2015-16 due to issuance in the name of a non-existing entity already amalgamated with retrospective effect.

Analysis:
The petitioner challenged the notice issued under Section 148A(b) of the Income Tax Act, 1961, dated 27th May, 2022, pertaining to the assessment year 2015-16. The challenge was based on the grounds that the notice was issued in the name of a non-existing entity that had been amalgamated on 16th September, 2019, with retrospective effect from 1st April, 2018. The High Court noted that a previous notice under Section 148 of the Act against the same non-existing entity had been quashed by the court in a prior order dated 2nd March, 2022. Despite the earlier quashing of the notice, the assessing officer, Bitan Roy, issued the impugned notice dated 27th May, 2022, against the same non-existing entity. The court criticized this conduct as reflecting a total lack of application of mind by the assessing officer, amounting to contumacious behavior and a blatant disregard of the court's earlier order. Notably, the court had previously imposed personal costs of Rs.10,000/- on Bitan Roy in a separate case, indicating a pattern of non-compliance.

The High Court, after considering the facts and submissions of the parties, disposed of the writ petition by quashing the impugned notice dated 27th May, 2022, under Section 148A(b) of the Act and all subsequent proceedings. Additionally, the court allowed the writ petition by imposing a personal cost of Rs.20,000/- on Bitan Roy, Ward No. V(1), Kolkata. The court directed that this cost be realized from Bitan Roy's salary and paid to the petitioner. Furthermore, the court ordered that a copy of the judgment be communicated to the Principal Chief CIT, West Bengal and Sikkim, by the office of the Ministry of Law and Justice, for necessary action and to ensure compliance within the department.

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