INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Notice under section 148 issued on an non-existing entity -

By virtue of the order passed by the High Court, three companies got amalgamated with the assessee-company. Further, much after the amalgamation AO issued a notice under section 148 for the impugned assessment year to an entity that was already amalgamated with the assessee-company. Assessee contended that the notice issued under section 148 was illegal, bad in law and without jurisdiction as the Revenue had proposed to reopen the proceedings against a non-existing entity. It further contended that immediately after the order of the High Court was passed, Revenue was informed about the amalgamation. Held: Notice under section 148 had been issued to an entity that had long back got amalgamated with the assessee-company, i.e., on a company that had ceased to have its own existence so as to render it amenable for the reassessment proceedings under the provisions of section 147. Moreover, as the Revenue was duly informed by the assessee about the amalgamation, statutory notice issued under section 148 would be fundamentally illegal and without jurisdiction.

REFERRED : Pr. CIT v. Maruti Suzuki India Ltd. (2019) 107 taxmann.com 375 (SC) : 2019 TaxPub(DT) 4931 (SC), Dharmnath Shares & Services Pvt. Ltd. v. Asstt. CIT (2018) 94 taxmann.com 458 (Guj) : 2018 TaxPub(DT) 4350 (Guj-HC), Rustagi Engineering Udyog Pvt. Ltd. v. Dy. Commissioner of Income Tax (2016) 67 taxmann.com 284 (Del) : 2016 TaxPub(DT) 1719 (Del-HC), Khurana Engineering Ltd. v. Dy. CIT (2013) 34 taxmann.com 261 (Guj) : 2014 TaxPub(DT) 2562 (Guj-HC), Asstt. CIT v. DLF Cyber City Developers Ltd. (2015) 53 taxmann.com 81 (Delhi-Trib) : 2014 TaxPub(DT) 3900 (Del-Trib)

FAVOUR : In assessee's favour

A.Y. : 2012-13

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