TaxTMI 
TaxTMI 
2016 (3) TMI 31
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....AY 1990-91, 1991-92, 1989-90 and 1992-93 respectively. W.P. (C) 1292/1999 has been filed impugning a notice dated 9th July, 1997 for AY 1993-94. The issues involved in the present Petitions are similar and, therefore, have been heard together. 3. The principal controversy involved in the present petition is whether notices under Section 148 could be issued to the Assessee after the said company stood dissolved in terms of a scheme of amalgamation of the Assessee with the Petitioner approved under Section 391 and 394 of the Companies Act, 1956. The Petitioner has further challenged the re-opening of assessments on the ground that the AO had no reason to believe that any part of the income of the Assessee has escaped assessment. It is also contended that the issuance of the impugned notices have not been approved by the competent authority. 4. Briefly, the relevant facts are that the Assessee was engaged in the business of manufacturing of sheet metal components. Further, the Assessee was also engaged in the business of transportation under the name and style of M/s Sarvodaya Carriers. In addition, the Assessee also carried on the business of leasing assets during the relevant ....
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....e present batch of Writ Petitions challenging the impugned notices issued for re-assessing the income of the Assessee. 9. During the course of the present proceedings, the Petitioner was supplied with a copy of a letter dated 8th October, 1997 sent by the Office of the Assistant Commissioner of Income Tax to the Deputy Commissioner of Income Tax Range-II for seeking an approval for re-opening the assessments for AY 1990-91 to 1992-93. The said letter contained the reasons for re-opening of the assessment and the same reads as under:- 'The Deputy Commissioner of Income-tax, Range 2, New Delhi. Sub:- M/s Rustagi Engg. Udyog (P) Ltd. Approval u/s 151 of the I.T. Act. Sir, The assessment for A/Y 1994-95 in the above mentioned case has been completed u/s 143 (3) of the I.T. Act, 1961. The assessee company had claimed 100% depreciation on MS Moulds costing Rs. 60,62,500/-. To verify the genuineness of the transactions, on request, survey was conducted by the Inv. wing (Pune and Meerut) at the premises of the lessee (Thane) and supplier (Ghaziabad). The survey revealed that the transaction was actually sham transaction. In fact no M....
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....tices were invalid as the same had been issued in the name of a non-existing entity (the Assessee). He pointed out that the AO had also been duly informed that the Assessee stood dissolved with effect from 1st April, 1995 as it had merged with the Petitioner Company. 13. Mr Krishnan next contended that the AO had no tangible material to form a belief that the income of the Assessee for the relevant assessment years had escaped assessment. He submitted that the AO had sought to re-open the assessment on the basis of the assessment order dated 27th March, 1997 passed under Section 143(3) of the Act in respect of AY 1994-95. In that year, the AO had disallowed the Assessee's claim for depreciation to the extent of Rs. 60,62,500/- which was claimed in respect of MS Moulds that were leased by the Assessee. The AO held that the said transaction was a sham transaction and concluded that in fact, MS Moulds were purchased by the Assessee. Mr Krishnan contended that the said return could not give rise to any reason to believe that the depreciation claimed by the Assessee in respect of other assets was also impermissible. He further informed this court that an appeal had been preferred by ....
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....ions of the Companies Act, 1956, the Supreme Court held that the notices issued by the Income Tax Officer were not warranted in law. 19. In a recent decision dated 3rd August, 2015 in ITA No. 475/2011 (SPICE Infotainment Ltd. v. Commissioner of Income Tax), this Court set aside the order passed by the Tribunal upholding the action of the assessing officer in framing an assessment in the name of an amalgamating company after the entity stood dissolved; this court held that the order of the Tribunal was unsustainable and framing an assessment on a dissolved company was not a procedural irregularity but a jurisdictional defect. Similarly, by an order dated 19th August, 2015, ITA 582 of 2015 (PCIT v. Images Credit and Portfolio Pvt. Ltd ), this Court held that the proceedings under Section 153C of the Act could not be initiated against an entity that had ceased to exist. 20. In view of the aforesaid, the contention that the impugned notices issued under Section 148 of the Act were invalid as having been issued to an Assessee that had ceased to exist, must be accepted. The impugned notices are, therefore, liable to be set aside on this ground alone. 21. Having stated the above,....