In a significant case, the Calcutta High Court declined to apply Section 292B of the Income Tax Act, 1961 in the case where the scrutiny notice issued in an amalgamating company’s name, despite the Assessing Officer being aware about the company’s amalgamation.
Section 292-B provides that no notice or assessment or any proceedings can be deemed to be invalid merely for the reason of any mistake, defect or omission in such notice, assessment or other proceedings.
The revenue has filed the appeal under Section 260A of the Income Tax Act, 1961 is directed against the order dated 9th May, 2023 passed by the Income Tax Appellate Tribunal for the assessment year 2011-12 which was in favour of Gpt Sons Pvt Ltd.
Get a Complete Kit of Essential Books for Daily Practice, Click Here
The short question which falls for consideration in the appeal is whether the reopening of the assessment was valid in law, inasmuch as, the notice was admittedly sent to a non-existing entity. Before us the standing counsel vehemently contended that the fact that the assessee company was amalgamated with GPT Ventures Pvt. Ltd. was never disclosed to the assessing officer and they came to know only on 2024. This submission appears not to have been raised any such fact before the Tribunal.
The bench found that the assessing officer was aware of the amalgamation even at the time when proceedings were initiated under Section 147 of the Act pursuant to the notice dated 6.12.2018. Apart from that in the reasons to believe which was appended to the notice the assessing officer has specifically referred to the details regarding the amalgamation. Therefore, the submission of the revenue cannot be accepted as it is factually incorrect.
A division bench of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya noted that the fact of amalgamation was well within the knowledge of the assessing officer. It thus dismissed the Department’s appeal which sought to contend that notice issued in the company’s previous name was a curable defect.
Get a Complete Kit of Essential Books for Daily Practice, Click Here
The department claimed that neither the assessee nor the amalgamating company informed the Assessing Officer about the scheme of amalgamation being approved by the High Court. It was thus their contention that technical defect in not issuing notice in the name of amalgamated company should not be given any weightage.
The Court noted that in the reasons to believe which was appended to the notice the assessing officer has specifically referred to the details regarding the amalgamation. The bench dismissed the appeal.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
