TaxTMI 
TaxTMI 
2023 (8) TMI 1196
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....her appropriate writ, order or direction quashing and setting aside the impugned notices issued u/s. 148 of the Income Tax Act by the Respondent (Annexure-D)." 2. Facts in brief are as under: 2.1 Satyasarthi Estate Organisers Private Limited along with three other companies ceased to exist with effect from 01.04.2009 subsequent to their amalgamation with the petitioner company being the transferee company. The amalgamation was effectuated vide scheme of amalgamation in accordance with the provisions of the Companies Act. 2.2 The erstwhile company therefore viz. Satyasarthi Estate Organisers Private Limited addressed a letter dated 07.08.2019 to the jurisdictional Assessing Officer intimating that it had amalgamated with Anokhi Reality Private Limited. A copy of the notice in form no.CAA with the draft scheme of amalgamation was enclosed for objections and suggestions. 2.3 Subsequently, Satyasarthi Estate Organisers Private Limited received notices under Section 148 of the Income Tax Act for the years 2014-15 to 2017-18 on various dates between 29.03.2021 and 31.03.2021. The erstwhile company submitted a reply on 30.01.2020 informing the officer of cancellation of the PA....
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....se of Marshall Sons & Co. (India) Ltd. v. Income Tax Officer, reported at [1996] 89 Taxman 619 (SC). 3.7 Ms.Shah would further submit that upon perusal of the aforementioned judicial pronouncement i.e. Marshall Sons & Co. (India) Ltd. (supra), it is apparent that transferor company i.e. Satyasarthi Estate Organisers Pvt. Ltd. has ceased to exist w.e.f appointed date i.e. 01.04.2019 and transferee company i.e. Anokhi Realty Pvt. Ltd. would be assessed to tax on the merged income w.e.f. appointed date i.e. 01.04.2019. 3.8 Ms.Shah would further submit that thus, Satyasarthi Estate Organisers Pvt. Ltd. being a transferor company has ceased to exist w.e.f 01.04.2019 so as to say that the notice u/s. 148 of the Act for various AYs 2014-15 to 2017-18 between 29th to 31st March 2021 in the name of transferor company Satyasarthi Estate Organisers Pvt. Ltd. is bad in law. 4. Mr.Varun Patel learned Senior Standing Counsel for the Revenue would make the following submissions: 4.1 That if the petitioner is aggrieved by the reassessment, an alternative efficacious remedy is available by way of an appeal to the CIT(A) and thereafter the Tribunal. 4.2 That the notices are valid in e....
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....e assessment year 2006- 2007 was filed on 30.06.2006 in the name of MRPL and MRPL amalgamated with MIPL on 11.05.2007 with effect from 01.04.2007. In other words, there was no intimation to the jurisdictional authorities as observed in the decision in the case of Inox Wind Energy Ltd. (supra). 6. Having considered the submissions made by the learned advocates for the respective parties, what needs to be considered is whether the notices issued under Section 148 of the Income Tax Act 1961 in between 29.03.2021 to 31.03.2021 for the assessment years 2014-15 to 2017-18 could be said to be issued to non- existent companies ? 6.1 Chronology of dates would indicate that the erstwhile company Satyasarthi Estate Organisers Private Limited amalgamated with the petitioner Anokhi Reality Private Limited though by order dated 13.11.2019, the effective date was 01.04.2019. In the significant accounting policies, it was set out that the merger had taken place w.e.f. 01.04.2019. 6.2 The jurisdictional officer was informed of the amalgamation on 07.08.2019 of the scheme that was to be effective from 01.04.2019. In other words, the Income Tax Authorities were aware of the fact that the com....
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....aid order and final approved scheme our Company being one of the Transferor Company merged with the Transferee Company w.e.f 01st April, 2018 and also shall be stand dissolved without any further acts or deeds. With respect to above, please find attached herewith as under: 1) Copy of Order for Amalgamation. 2) Copy of duly approved Scheme of Amalgamation. Accordingly, kindly note that we will be also making necessary applications for surrender of Permanent Account Number (PAN) and Tax Deduction Number (TAN) of the Company. You are requested to kindly take on your records above development and transfer your records in favour of M/s. Gauriputra Estate Holders Private Limited having PAN: AACCG4800Hand jurisdiction with the Income Tax Department is Ward No. 2(1)(1)Ahmedabad. Kindly acknowledge the copy of this letter and request to do the needful." 5 Ms. Shah further invited the attention of this Court to the two letters of even date 23rd July 2021 addressed to the jurisdictional Assessing Officer by the Director of the erstwhile Shivganga Property Holders Private Limited bringing it to his notice that the impugned notice c....
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.... were the peculiar facts of the case. Those facts have been noted above. What had weighed with the Delhi High Court was that though the notice to reopen had been issued in the name of the erstwhile entity, all the material on record including the tax evasion report suggested that there was no manner of doubt that the notice was always intended to be issued to the successor entity. Hence, while dismissing the Special Leave Petition this Court observed that it was the peculiar facts of the case which led the court to accept the finding that the wrong name given in the notice was merely a technical error which could be corrected 36 Civil Appeal No. 285 of 2014 and connected cases 37 Special Leave Petition No. 7409 of 2018 under Section 292B. Thus, there is no conflict between the decisions in Spice Enfotainment on the one hand and Skylight Hospitality LLP on the other hand. It is of relevance to refer to Section 292B of the Income Tax Act which reads as follows: "292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of....
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....or shall be entitled to recover from the predecessor any sum so paid. (4) Where any business or profession carried on by a Hindu undivided family is succeeded to, and simultaneously with the succession or after the succession there has been a partition of the joint family property between the members or groups of members, the tax due in respect of the income of the business or profession succeeded to, up to the date of succession, shall be assesseed and recovered in the manner provided in section 171, but without prejudice to the provisions of this section. Explanation.-For the purposes of this section, "income" includes any gain accruing from the transfer, in any manner whatsoever, of the business or profession as a result of the succession" Now, in the present case, learned Counsel appearing on behalf of the respondent submitted that SPIL ceased to be an eligible assessee in terms of the provisions of Section 144C read with clause (b) of sub section 15. Moreover, it has been urged that in consequence, the final assessment order dated 31 October 2016 was beyond limitation in terms of Section 153(1) read with Section 153 (4). For the purposes of the prese....
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....g these two decisions, this Court in Jai Prakash Singh held that an omission to serve or any defect in the service of notices provided by procedural provisions does not efface or erase the liability to pay tax where the liability is created by a distinct substantive provision. The omission or defect may render the order irregular but not void or illegal. Jai Prakash Singh and the two decisions that it placed reliance upon were evidently based upon the specific facts. Jai Prakash Singh involved a situation where the return of income had been filed by one of the legal representatives to whom notices were issued under Section 142(1) and 143(2). No objection was raised by the legal representative who had filed the return that a notice should also to be served to other legal representatives of the deceased assessee. No 40 (1943) 11 ITR 202 (Bombay) objection was raised before the assessing officer. Similarly, the decision in Maharaja of Patiala was a case where the notice had been served on the legal representative, the successor Maharaja and the Bombay High Court held that it was not void merely because it omitted to state that it was served in that capacity. 33 In the present....
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....e present case, the proceedings against MRPL started in 27.08.2008- when search and seizure was first conducted on the Mahagun group of companies. Notices under Section 153A and Section 143(2) were issued in the name MRPL and the representative from MRPL corresponded with the department in the name of MRPL. On 28.05.2010, the assessee filed its ROI in the name of MRPL, and in the 'Business Reorganization' column of the form mentioned 'not applicable' in amalgamation section. Though the respondent contends that they had intimated the authorities by letter dated 22.07.2010, it was for AY 2007- 2008 and not for AY 2006-07. For the AY 2007- 08 to 2008-2009, separate proceedings under Section 153A were initiated against MIPL and the proceedings against MRPL for these two assessment years were quashed by the Additional CIT by order dated 30.11.2010 as the amalgamation was disclosed. In addition, in the present case the assessment order dated 11.08.2011 mentions the name of both the amalgamating (MRPL) and amalgamated (MIPL) companies. ... 41 In the light of the facts, what is overwhelmingly evident- is that the amalgamation was known to the assessee, even at the stage w....
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....Court notes and holds that whether corporate death of an entity upon amalgamation per se invalidates an assessment order ordinarily cannot be determined on a bare application of Section 481 of the Companies Act, 1956 (and its equivalent in the 2013 Act), but would depend on the terms of the amalgamation and the facts of each case." 6.8 Even in the case of Kunvarji Fincorp Private Limited (supra), the Division Bench of this Court has culled out the distinction on facts in the case of Mahagun Realtors (P.) Ltd. (supra). Para 13 thereof reads as under: "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 reve....
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....was approved by the National Company Law Tribunal, Ahmedabad (NCLT). The scheme came under operation on 09.02.2021 with effect from the appointed date of 01.04.2020 for Part II of the Scheme (Merger of GFL Renewables Limited into GFL Limited). Communications addressed to Inox Renewables were responded by the petitioner after 09.02.2021. On 10.03.2021 an email was addressed to the Jurisdictional Assessing Officer informing the fact of scheme of arrangement and the merger of Inox Renewables Limited into the petitioner company and shared a copy of the order passed by NCLT, where the petitioner company also informed the respondent about the sanction of composite scheme of arrangement on replies dated 31.08.2021 and 10.09.2021. 9. The respondents since continued to issue notice in the name of erstwhile company, which was not in existence with effect from 01.04.2020, the grievance is made by the petitioner. ... ... 19. The decision of the Apex Court in the case of Principal Commissioner of Income- tax vs. Mahagun Realtors (P.) Ltd., [2022] 137 taxmann. Com 91 (SC), requires serious consideration at this stage. It was a case where no indication about am....
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.... 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 been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011- 2012. In doing so, this....
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....upon the structure and objective of enactment. Broadly, the quest of legal systems and Courts has been to locate if a successor or representative exists in relation to the particular cause or action, upon whom the assets might have developed or upon whom the liability in the event it is adjudicated, would fall. 20.1 While distinguishing the decision of Maruti SUZUKI India Ltd. (supra), the Court notices that the scheme of amalgamation was approved on 29.01.2013 with effect from 01.04.2012 and the same was intimated to the Assessing Officer on 02.04.2013 i.e. on the very next day and the notice under section 143(2) for the Assessment Year 2012-13 was issued to amalgamating company on 26.09.2013. Thus, the notice was issued to non-existing company and the assessment order was issued against the company, which was held to be substantive illegality and not procedural violation of the nature adverted to in section 292B. 20.2 In Maruti SUZUKI India Ltd. (supra), the Court had further noticed that the Assessing Officer was informed of the amalgamating company having ceased to exist as a result of approved scheme of amalgamation, the jurisdictional notice was issued only ....
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....IPL and the proceedings against MRPL for these two assessment years were quashed by the Additional CIT by order dated 30.11.2010, as the amalgamation was disclosed. 20.4 What overwhelmingly evident was that the amalgamation was known to the assessee, even at the stage when the search and seizure operations took place as well as statements were recorded by the Revenue of the Directors and Managing Director of the group. A return was filed, pursuant to the notice, which suppressed the fact of amalgamation and, in fact, the return was filed by MRPL though the entity was ceased to exist and yet the appeals were filed before the CIT and the Tribunal. Even the affidavit was filed before this Court on behalf of the Director of MRPL. The assessment order attributes specific amounts surrendered by MRPL and after considering the special auditor's report, brings specific amounts to tax in the search assessment order." 6.10 As rightly pointed out by Ms.Nupur Shah learned advocate for the petitioner, there are several distinctive features which suggest that as held by the Division Benches of this Court in the case of Inox Wind Energy Ltd. (supra) and Adani Wilmar Ltd. (supra), the d....
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....not participate in the reassessment proceedings, rather the company had filed a reply dated 05.07.2021 challenging the validity of notice being issued on a nonexisting company. 6 Assessment order was issued in the name of the amalgamating company i.e. Mahagun Realtors Pvt. Ltd. represented by amalgamated company. The amalgamating company i.e. Mahagun Realtors Pvt. Ltd. filed appeals also in similar fashion before FAA and Tribunal. No final assessment orders have been passed in name of the amalgamated company Satyasarthi Estate Organizers Pvt. Ltd. post merger. 7 It was for the first time before Tribunal that the amalgamating company i.e. Mahagun Realtors Pvt. Ltd. raised objection on validity of assessment in the name of the Taxpayer in view of amalgamation. The company from the very first has raised objection on validity of the assessment i.e. has challenged the validity of notice issued u/s. 148 of the Act. 8 Affidavit filed before the SC also shows that affidavit was signed by directors of the amalgamating company i.e. Mahagun Realtors Pvt. Ltd. The amalgamating company Anokhi Realty Pvt. Ltd. has filed petition before the Hon'ble Gujarat High court on....
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....TO (impugned in the writ petition) were not warranted in law. The business carried on by the transferor company (subsidiary company) should be deemed to have been carried on for and on behalf of the transferee company. This is the necessary and the logical consequence of the Court sanctioning the scheme of amalgamation as presented to it. The order of the Court sanctioning the scheme, the filing of the certified copies of the orders of the Court before the Registrar of Companies, the allotment of shares, etc., may have all taken place subsequent to the date of amalgamation/transfer, yet the date of amalgamation in the circumstances of this case would be 1-1-1982. This is also the ratio of the decision of the Privy Council in Raghubar Dayal v. Bank of Upper India Ltd. AIR 1919 PC 9. 13. The counsel for the revenue contended that if the aforesaid view is adopted, then several complications will ensue in case the Court refuses to sanction the scheme of amalgamation. We do not see any basis for this apprehension. Firstly, an assessment can always be made and is supposed to be made on the transferee company taking into account the income of both the transferor and transferee co....
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....r Section 142(1) of the Income Tax Act, 1961 on 28.01.2022 and notice under Section 142(1) of the Income Tax Act, 1961 on 12.03.2022, against which, petitioner gave replies on 04.02.2022 and 16.03.2022 respectively. [8] The notice dated 25.03.2021 was issued in the name of Company, which is no longer in existence. The clarification that new amalgamated Company Roquette India Private Limited (PAN: AAFCR2758G) had invested in time deposits from BNP Paribas during the relevant Assessment Year 2017-18. It was also pointed out that the said error on the part of BNP Paribas in mentioning that the investment has been done by the old amalgamating company i.e. Roquette India Private Limited (PAN: AADCR6343R). The said error was rectified by BNP Paribas and BNP Paribas has subsequently revised their SFT return. The petitioner has placed on record its Annual Tax Statement filed under the Income Tax Act, 1961 for the Assessment Year 2017-18, wherein PAN is shown as AAFCR2758G. [9] The issue involved in the present petition is no more res integra in view of the reported decision in the case of Neo Structo Construction (supra). The similar question arose before this Court and t....
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....le referring to its earlier decision in the case of Khurana Engineering Limited (supra) held that once the assessee company gets amalgamated with the transferee 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. 11. Accordingly, in view of the aforesaid concluded proposition of law; which applies on all fours to the facts of the present case, the notice dated 25th March, 2019 issued by the respondent under the provisions of section 148 of the Act for the assessment year 2012-13, being without jurisdiction, is not sustainable." [10] In the case of Adani Wilmar Ltd. (supra), this Court has also referred the decision of the Hon'ble Apex Court in the case of Principal Commissioner of Income Tax Vs. Maruti SuZuki Ltd., wherein the Hon'ble Apex Court has observed in paras 5 & 6 as under:- ....
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....cheme of Amalgamation. Answering that in the affirmation has held that in such case, the notice issued under Section-148 in its name would be fundamentally illegal and without jurisdiction. 8. Concededly, in the present case the notice under section 148 of the Act has been issued to Gayatri Integrated Services Private Limited which, as aforesaid, had long back got amalgamated with the petitioner vide order dated 18th June, 2015 passed by this court and thus, it had ceased to have its own existence so as to render it amenable for the reassessment proceedings under the provisions of section 147 of the Act. Moreover, the respondent and the department were duly informed by the petitioner about the amalgamation and despite the said factum having been brought to the notice of the respondent, statutory notice under section 148 came to be issued to Gayatri Integrated Services Private Limited for reopening the assessment on the ground that the respondent has reason to believe that income chargeable to tax for the assessment year 2012-13 has escaped the assessment within the meaning of section 147 of the Act. 9. The controversy in the present petition, is no longer res inte....
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....ot for the A.Y.2006- 07. The separate proceedings under Section 153A were initiated against MIPL for A.Y.2007-8 to 2008-09 and the proceedings against MRPL for those two assessment years were quashed by the Commissioner as the amalgamation was disclosed. Since the amalgamation was known to the assessee, even at the stage when the search and seizure operations have taken place and statements were recorded by the revenue of the Directors and Managing Director of the group. A return was filed, pursuant to notice, which also suppressed the factum of amalgamation; on the contrary, the return was filed by MRPL - the company which has ceased to be in existence, and yet, the appeals were filed on behalf of it before the Commissioner and a cross appeal was filed before the Tribunal. An affidavit before the court was also on behalf of the Director of MRPL and the assessment order had attributed the specific amounts surrendered by MRPL and that too, after considering the special auditor's report, bringing specific amounts to tax in the search assessment order. 14. All these according to the Court indicated that the order adopted a particular method of expressing the liabilit....
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....ision in Spice Entertainment. 40. We find no reason to take a different view. There is a value which the court must abide by in promoting the interest of certainty in tax litigation. The view which has been taken by this Court in relation to the respondent for AY 2011-12 must, in our view be adopted in respect of the present appeal which relates to AY 2012-13. Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable." 32. The court, undoubtedly noticed Saraswati Syndicate Further, the judgment in Spice (supra) and other line of decisions, culminating in this court's order, approving those judgments, was also noticed. Yet, the legislative change, by way of introduction of Section 2(1A), defining "amalgamation" was not taken into account. Further, the tax treatment in the various provisions of the Act were not brought to the notice of this co....