2020 (3) TMI 49

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....ction 148 of the Income Tax Act, reopening the assessment of M/s.M.Ct.M. Corporation Private Limited for A.Y.2000-2001. In response to the same, the appellant had sent a reply dated 05.04.2007 stating that for A.Y.2000-2001, the Company was not in existence, for which, the respondent had sent communication on 16.05.2007 providing reasons for reopening of assessment for the Assessment Year 2000-2001. On receiving the above communications, the appellant on 31.05.2007 sent his objections for reopening by the Assessing Officer. The Assessing Officer had sent a letter on 18.07.2007 rejecting the objections raised by the appellant/assessee. The appellant, challenging the notice issued under Section 148 of the Income Tax Act and also the rejection....

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....ice issued under Section 148 of the Income Tax Act, the appellant on 05.04.2007 sent a reply reiterating the non-existence of the Company and enclosed the copy of the order of this Court dated 10.12.1999. Despite the same, the Assessing Officer without considering the said fact and the objections raised by the appellant, had passed the rejection order. The learned counsel has placed his reliance on the decisions reported in (2019) 416 ITR 613 (SC) and also (1961) 41 ITR 191 (SC), (2017) 390 ITR 10 (SC), (2003) 264 ITR 566 (SC), (1968) 67 ITR 11 (SC), (2000) 241 ITR 0672 (Mad), (2004) 267 ITR 200 (Bom) and (2018) 404 ITR 10 (SC). The learned Single Judge had also not appreciated the facts brought to the knowledge of the Writ Court and instea....

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....ers on merit. There is no reason to interfere with the orders of the learned Single Judge, which is well founded. 5 We have heard the rival submissions made on either side and perused the materials placed on record. 6 Admittedly the appellant's erstwhile company viz. M/s.M.Ct.M. Corporation Pvt. Ltd., was demerged into M/s.M.Ct.M.Global Investment Private Limited and Sivagami Holdings Private Limited without winding up w.e.f. 01.04.1999 vide order of this Court dated 10.12.1999 in C.P.Nos.105 to 107 of 1999. Even though, the appellant informed the respondent about the sanction of Scheme of Arrangement for demerger, it is seen that subsequently there was no communication to the respondent, whether it is finally confirmed or not. Base....

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....d by the Hon'ble Supreme Court, which is referred to by the learned counsel for the respondent, it is clear that Section 506(5) proviso (a) of the Companies Act and Chapter XV of the Income Tax Act which deals with "liability in special cases" and its clause (L) which deals with "discontinuance of business or dissolution" and these provisions provide as to how and in what manner the liability against such Company arising under the Companies Act and under the Income Tax Act is required to be dealt with and the Hon'ble Supreme Court remanded the matter back to the High Court to decide the matter afresh. 9 Mere winding up or dissolution of the Company would not take away its liability, which is a matter to be gone into by the Assessi....