AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 644
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....der Section 148 of the Income-tax Act dated 30.03.2021 directing the petitioner to furnish the return of income for the A.Y.2016-17 on the ground that this is a notice issued without jurisdiction and is illegal as the notice issued to the non-existing person. 4. The brief facts leading to the present petition as follows:- 4.1 The petitioner is a limited company. The two companies namely, Kaizen Stocktrade Pvt. Ltd. and Kaizen Finstock Pvt. Ltd. were amalgamated into the petitioner company by an order dated 05.08.2016 in Company Petition No.235 of 2016 in Company Application No.221 of 2016. The Court sanctioned the Scheme of Amalgamation of two Transferor Companies viz. Kaizen Stocktrade Private Limited and Kaizen Finstock Private Limited with petitioner company - Kunvarji Fincorp Private Limited, which proposed under Section-391 and 394 of the Companies Act, 1956. 4.2 The notice of petitions had been served upon the office of the Official Liquidator for the Transferor Companies. It had been also served upon the Central Government and affidavit also had been filed by the Regional Director, North-Western Region, Ministry of Corporate Affairs. The Court also considered the observat....
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.... 15. All concerned authorities to act on a copy of this order along with the scheme duly authenticated by the Registrar, High Court of Gujarat. The Registrar, High Court of Gujarat shall issue the authenticated copy of this order alongwith Scheme as expeditiously as possible." 4.3 In a return filed by the petitioner for the A.Y.2016-17, the fact of amalgamation was indicated and the case was picked up for re-assessment and notice under Section-142(1) was issued on 22.02.2018. The petitioner replied to the same vide letter dated 20.03.2018 and on 04.12.2018, the order of assessment under Section-143(3) noting the assessment was completed considering the income of the petitioner and those two companies, which have been merged with the petitioner. 4.4 The Notice under Section-148 was issued on 30.03.2021 in the name of predecessor company i.e. Kaizen Finstock Pvt. Ltd. seeking to re-open the assessment for A.Y.2016-17. Through e-mail 28.04.2021, the respondent no.1 appraised of the factam of amalgamation and pointing out that the notice is bad ab-initio. However, no response has been given and hence, petitioner has approached this Court seeking following reliefs:- 7. This Court ....
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....n Patel appeared in response to the notice for final disposal and this Court has heard the learned advocate Mr. Bandish Soparkar as well as learned senior counsel Mr. Varun Patel. 6. It is pointed out to this Court that the order of 05.08.2016 had been intimated to the officer on 20.03.2018 in reply to the notice under Section-142(1) of the Income-tax Act for the A.Y.2016-17. While replying to the said notice, there has been specific averment in the first paragraph itself addressed to Circle 2(1)(2) that the companies viz. M/s. Kaizen Stocktrade Pvt. Ltd. [PAN : AADCK0048A] and Kaizen Finstock Pvt. Ltd. [PAN : AAECK6956E] as per the decision of this Court on 31st August, 2016 with record date of 1st April, 2015 had acquired by the present petitioner. 7. He has urged that this should be construed as sufficient intimation and yet the notice has been issued, which is impugned in the petition on 30.03.2021 for the A.Y.2016-17 for Kaizen Finstock Pvt. Ltd., which no longer exists. The amalgamating company having ceased to exist as a result of the approved scheme, it is urged that no notice can be issued to the non-existing company relying on the two decisions of Gayatri Microns Ltd. V....
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....tion- 142(1) of the Income-tax Act for the A.Y.2016-17, not only, it had specified that it has required the two companies i.e.M/s. Kaizen Stocktrade Pvt. Ltd. [PAN: AADCK0048A] and Kaizen Finstock Pvt. Ltd. [PAN: AAECK6956E] and this communication addressed to Circle 2(1)(2) provides for order of the Court dated 31st August, 2016. 11. In absence of any particular format for intimating the authority concerned, this intimation on the part of the petitioner is sufficient intimation to the department. We need to make also a note of the fact that the notice, which is impugned in the present petition is also issued by the very officers Circle 2(1)(2), to whom the intimation had been given by the petitioner. 12. The Apex court in the case of Principal CIT Vs. Maruti Suzuki Ltd. (Supra) had noted that the Assessing Officer was informed of the amalgamating company having ceased to exist as a result of the approved Scheme of Amalgamation. The Court has held that the legal principle provides that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. This Court in the case of Gayatri Microns Ltd. Vs. Assistant Commissioner of Income-tax was considering the the cas....
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....e company, its independent existence does not survive and therefore it would no longer be amenable to the assessment proceedings. Thus, it is well settled proposition of law that upon its amalgamation the transferor company ceases to exist and becomes extinct, and it would no longer be amenable to the assessment proceedings considering the fact that the extinct entity would not be covered within the ambit of the provisions of the Act. 13. The Supreme Court in the case of Principal Commissioner of Income-tax Vs. Mahagun Realtors (P.) Ltd. was considering the case for the A.Y.2006-07, where there was no intimation regarding amalgamation of the company. The return of income was filed by the assessee on 30.06.2006 in the name of MRPL and MRPL amalgamated with MIPL on 11.05.2007, w.e.f. 01.04.2006. The proceedings against MRPL stated in 27.08.2008 - when search and seizure was first conducted on assessee group of companies. Notices under Section 153A and Section 143(2) were issued in the name of MRPL and the representative from MRPL corresponded with the revenue in the name of MRPL. The assessee filed its return of income in the name of MRPL in May, 2010 and in the 'Business Reorganiz....
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....any on 26.09.2013. This court in facts and circumstances observed the following: "35. In this case, the notice under Section 143(2) under which jurisdiction was assumed by the assessing officer was issued to a non- existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B. *** **** **** **** 39. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Entertainment on 2 November 2017. The decision in Spice Entertainment has be....