In a recent case, the High Court of Calcutta has held that a reassessment notice issued against a company which already has been amalgamated is invalid.
North Bengal Promoters Private Limited Vs., the petitioner has challenged the impugned notice dated April 20, 2021, relating to the assessment year 2013-14 under section 148 of the Income Tax Act, 1961 which is a transferor company because the impugned notice has been issued in the name of the company which has already been amalgamated on 11.08.21. w.e.f. 01.04.2018 and that the department has been intimated about this amalgamation which is a matter of record and such notice in the name of a non-existing company is not tenable in the eye of the law.
The petitioner has relied on a decision of the Gujarat High Court in the case of Takshashila Realties Pvt. Ltd. v. Deputy Commissioner of Income Tax, wherein the respective petitioners-original assessee is ordered to be amalgamated with one Takshasila Gruh Nirman and the scheme of amalgamation has been sanctioned by the Court. Under the circumstances, when the impugned notices are issued against the original assessee-amalgamating Company on 21.01.2011, it can be said that the same has been issued against the non-existent Company.”
It was held that it cannot be disputed that once the scheme for amalgamation has been sanctioned by the Court with effect from 01.04.2010, from that date amalgamating Company would not be in existence.
A single-judge bench comprising Justice Md. Nizamuddin held that the impugned notice dated April 20, 2021, and all further steps under the said impugned notice also is not tenable in the eye of the law.
While allowing the writ petition, the Court quashed the impugned notice solely on the ground that the impugned notice was issued in the name of a non-existing company despite revenue having notice and knowledge of the non-existence of such Company.
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