TaxTMI 
TaxTMI 
2026 (5) TMI 1423
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....ion No. 4001 of 2025, the petitioner-has challenged the notice dated 17th July 2025 under section 143(2) and a notice dated 26th August 2025 under section 142(1) under the Income Tax Act for A.Y. 1995-96. The Revenue issued similar notices under section 143(2) and section 142(1) of the Income Tax Act to the petitioner-company for A.Y. 1993-94 and A.Y. 1994-95 which are under challenge in other two writ petitions viz. Writ Petition No. 2980 of 2025 qua A.Y. 1993-94 and Writ Petition No. 3359 of 2025 qua A.Y. 1994-95. 2. A common question of law is involved in all these matters; whether the decision of this Court rendered on 14th February 2025 in a batch of the Income Tax Appeals and a writ petition filed by the RIL contained a "finding" and any "direction" necessary for a decision in those matters on merits? These writ petitions were heard on different dates and the rival parties advanced similar arguments in all three matters regarding legality or otherwise of the notices issued to the petitioner-company and are disposed of by this common order. As the circumstances in which the impugned notices have been issued in all three matters are similar, the brief facts narrated in Writ ....
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.... in law, the assessment order under section 143(3) of the Act passed on a non-existent entity is bad in law, void ab initio"? 5. In the judgment delivered on 14th February 2025, the stand taken on behalf of the Revenue that the RIL took over all the liabilities as per the merger order and cannot shrug off its obligation by raising a belated plea of jurisdiction was not accepted by this Court. This Court held that the Assessing Officer had the knowledge of merger of the RPPL and RPEL with the RIL but he passed the assessment orders against the non-existing entities. This Court held that the apprehension of the Revenue that it may not be able to pass an order in the name of the RIL on account of the limitation under the Income Tax Act was prima facie not correct and the Revenue was free to take appropriate action, in accordance with law, against the RIL if the law so permits. It was further held that there are sufficient provisions in the Income Tax Act, such as, sections 153(5), 153(6), 150 etc. to take care of this situation. This Court further observed and clarified that the Revenue was not precluded from initiating fresh proceedings against the RIL in accordance with law for a....
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....law, to give effect to the submissions of the appellant-assessee if the law so permits. We may also note and accept that the consequence of the appellant-assessee's submission is that the revenue ought to have assessed and passed the order in the name of the amalgamated company-RIL. If that be so, then the revenue is free to take appropriate proceedings under the Act in accordance with law for assessing the amalgamated company-RIL since the appellant-assessee's submission impliedly admits that the assessment ought to have been done in the name of RIL and not in the name of the amalgamating companies RPEL and RPPL. 28. The reliance placed by the respondent-revenue on the decision of the Supreme Court in the case of Mahagun Realtors (P) Ltd. (supra) is distinguishable. This decision was rendered on 5 April 2022 and in which the decision of the Supreme Court in the case of Maruti Suzuki India Ltd. (supra) was also considered. In the case of Mahagun Realtors (P) Ltd. (supra), after the merger order, return of income was filed in the name of the amalgamating company. In the said return of income, PAN of the amalgamating company was mentioned. In the return of income, the date o....
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....te notice with respect to two separate proceedings and two different non-existing entities. 8. The Income Tax Act provides a complete procedure for assessment under Chapter XIV. Section 139 provides that every person (a) being a company or a firm or (b) being a person other than a company or a firm shall on or before the due date furnish a return of his income or the income of such other person during the previous year in the prescribed form if his total income or the total income of any person in respect of which he is assessable under the Act during the previous year exceeds the maximum amount which is not chargeable to income tax. The third proviso to section 139 mandates that every company or a firm shall furnish on or before the due date the return in respect of its income or loss in every previous year. Section 142 contemplates an inquiry before assessment and provides under sub-section (1) that the Assessing Officer for the purpose of making an assessment under the Act may serve on any person who has made a return or to whom a notice was issued under sub-section (1) of section 139, whether a return was made or not or in whose case the time allowed under sub-section (1) of....
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....any such assessment or reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment or reassessment or recomputation could not have been made, by reason of any other provision limiting the time within which an action for assessment or reassessment or recomputation may be taken, at the time when - (a) the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made; or (b) the proceedings relating to assessment or reassessment or recomputation under this Act (other than those proceedings which have culminated in an order), which was the subject-matter before the Court was, initiated. (3) For the purposes of sub-section (1), notice under section 148 shall be issued within a period of three months from the end of the quarter in which the certified copy of the order of the authority or the Court, as the case may be, is received by the jurisdictional Principal Commissioner or Commissioner.] 11. Section 153 of the Income Tax Act is also a relevant provision which may be taken note of. It puts a statutory restriction on passing an order of assessmen....
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....as indicated in the Income Tax Act. No judgment contrary to the legislative intendment under sub-section (2) of section 143 has been produced before the Court on behalf of the Revenue to carve out an exception to the effect that the bar of limitation is not attracted in the second round of litigation. 13. This is not in dispute that the judgment dated 14th February, 2025 passed in the batch of Income Tax Appeals filed by the RIL and Revenue was challenged by filing Special Leave Petitions which have been dismissed by the Hon'ble Supreme Court. In the present proceedings pending before this Court, the question of law which is canvassed before this Court mainly centers around the observations made by this Court in the judgment dated 14th February, 2025. The observation made in this judgment to the effect that the Revenue would not be precluded from initiating fresh proceedings against the RIL do not confer jurisdiction in the Assessing Officer to act arbitrarily or without application of mind and beyond its powers as conferred under the Income Tax Act. The observations made by the co-ordinate Bench in paragraph No.27 clearly puts the Assessing Officer on notice that he has to act ....
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....the returns were furnished by the RPPL and RPEL. Mr. Mistri, the learned senior counsel rightly contended that the notice for reassessment is required to be first issued to the assessee and the further proceedings against the petitioner-company cannot be initiated by merely issuing the impugned notice under section 143(2) of the Income Tax Act. The Assessing Officer has also failed to record his satisfaction and no material thereof has been produced in the present proceedings that the Assessing Officer was satisfied that it is expedient or necessary to scrutinize the returns of the assessee. 16. Mr. J. D. Mistri, the learned senior counsel for the petitioner-company referred to the decision in "Shell India Markets Private Limited" to submit that the impugned notices issued to the petitioner-company, even otherwise, warrant interference of this Court in view of the said decision in "Shell India Markets Pvt. Ltd." which was rendered by this Court in similar situation and on identical set of facts. 17. This is a matter of judicial discipline and propriety and necessary to maintain uniformity in the judicial system that the judgment in "Shell India Markets Pvt. Ltd." [Shell India....
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....uch return of income, assessment, notice, summons or other proceeding was in subsistence and effect in conformity with or according to the intent and purpose of the Income Tax Act. The Hon'ble Supreme Court considered the previous decisions of Delhi High Court and the decisions in "CIT v. M/s Spice Enfotainment Ltd." [CIT v. M/s Spice Enfotainment Ltd.: Civil Appeal No. 285 of 2014 dated 2nd November 2017] and "Skylight Hospitality LLP" [Skylight Hospitality LLP" v. Asst. CIT: ( 2018) 13 SCC 147] and held that the assessee-company on amalgamation with another company loses its existence and the jurisdictional notice issued to the erstwhile assessee-company shall not be merely a procedural violation as contemplated under section 292B of the Income Tax Act. 19. The law is, therefore, well settled that the former Company ceases to exist in the eye of law when it is dissolved under the scheme of amalgamation without winding up. The appeal filed by the Revenue against the "Shell India Markets Pvt. Ltd." came to be disposed of with the following observations:- "5. We agree with the submission made by Mr Bhatt, learned counsel for the Respondent-Assessee that the notice and or....
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....uant thereto against a non-existing entity, namely, Shell Technology India Pvt. Ltd. 21. Furthermore, the decision dated 17th November 2025 passed in the second round of litigation in the "Shell India Markets Pvt. Ltd." reveals that the notices under section 143(2) and section 142(1) of the Income Tax Act issued to the said Company were quashed by a co-ordinate Bench of this Court holding that the order dated 27th March 2025 in Income Tax Appeal No. 2381 of 2018 did not contain any "finding" or "direction" as contemplated under section 153(6) of the Income Tax Act and, consequently, no order of assessment could have been passed against the said Company in view of the bar of limitation under the Income Tax Act. The co-ordinate Bench reflected on the expressions "not precluded from initiating fresh proceedings" and "in accordance with law" in the order dated 27th March 2025 and held that the said order did not contain any finding. Moreover, the decision dated 27th March 2025 even assuming to have recorded a finding then also such finding cannot be held to have been rendered on merits so as to dispose of the appeal before the Court. In "Shell India Markets Private Limited" the co-o....