The Delhi high court held that there is no requirement to issue two separate notices in the name of amalgamated Companies for the Reopening Assessment proceedings.
The writ petitions under Article 226 /227 of the Constitution of India are directed against the notice issued by respondent No.1 under Section 148 of the Income Tax Act for the assessment year (AY) 2012-13 and the orders disposing of the objections filed by the respective petitioners and also the proceedings emanating therefrom.
The Petitioner is a private limited company engaged in the business of construction-development projects. Pursuant to a scheme of amalgamation approved by this Court vide order dated 20.12.2012, M/s. Experion Developers International Pvt. Ltd amalgamated with M/s. Experion Developers Pvt. Ltd
During the financial year relevant to the assessment year under consideration i.e. AY 2012-13, (FY 2011-12) the Petitioner and the erstwhile-assessee, EDIPL, were separate/independently assessable assessees.
For the assessment year under consideration, i.e., AY 2012-13, as Petitioner (EDPL) was the only surviving entity, it alone filed return of income declaring loss of Rs.7,82,95,075/-. The return of income was selected for scrutiny and after making certain disallowances, the total income was assessed at Rs. 90,15,239/- and assessment order dated 19.03.2015 was passed under Section 143(3) of the Act.
The said order is presently a subject matter of a pending appeal.
The division bench comprising of Justice Vipin Sanghi and Justice Sanjeev Narula pronounced the judgment based on a writ petition filed by Experion Developers Private Limited.
In the light of the decision in BDR Builders & Developers (P) Ltd. V Assistant Commissioner of Income Tax [2017] bench said that for reopening Assessment proceedings in respect of EDIPL, now merged with EDPL, a notices can only be issued in the name of the merged entity. There is no requirement to issue two separate notices in the name of the amalgamated company.
While dismissing the petition the bench further said that the successor-in-interest of the amalgamating company and in its individual capacity, as the amalgamated company (EDPL) has taken over the liabilities of the amalgamating company (EDIPL) and the notice mentions the liabilities of EDIPL as it accrued pre-amalgamation in its individual capacity.
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