Notice under Section 148 addressed to nonexistent or merged entity held invalid and quashed, bars reassessment jurisdiction

A notice issued under Section 148 for reopening assessment cannot validly be addressed to an entity that has ceased to exist or has been merged into another company because the statutory reassessment machinery requires a live, extant taxpayer as recipient; earlier authorities treating notices to nonexistent or merged entities as defective are followed. The consequence is that a Section 148 notice dated 31 March 2019 addressed to an entity no longer in existence was quashed and set aside, preventing reassessment on that basis.

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Issues: Whether a notice issued under Section 148 of the Income-tax Act, 1961 to an entity that had ceased to exist (including where the named entity was merged into another company) is valid.

Analysis: Section 148 provides for issuance of notice for reopening assessment. A notice addressed to an entity which has ceased to exist or which has been merged and is no longer extant cannot properly invoke the statutory reassessment machinery. Prior determinations addressing notices sent to non-existent or merged entities are treated as precedents that such notices are defective and liable to be set aside. The present matters involve notices dated 31st March 2019 addressed to entities no longer in existence or to the merged entities, thereby raising the question whether the notices meet the jurisdictional requirement under Section 148.

Conclusion: The notice dated 31st March 2019 issued under Section 148 to an entity that had ceased to exist is quashed and set aside; the petition is allowed in respect of that notice.

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