Notice u/s 148 issued to a Non-Existing Company Despite having Knowledge about Amalgamation is not valid: Calcutta HC [Read Order]

Notice - company - despite - knowledge - Amalgamation - Calcutta - HC - TAXSCAN

In a recent judgement, the Calcutta High Court (HC) has held thata notice under 148 of the Income Tax Act, 1961 issued to a non-existing company despite having knowledge about its amalgamation is not valid.

S. K. Finserve Private Limited, the petitioner has challenged the impugned notice dated July 27, 2022, 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 December 12, 2016 w.e.f. April 01, 2015.

It was submitted 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 impugned notices under section 148 of the Income Tax Act have been issued against the original assessee on 21.01.2011 to reopen the assessment for the Assessment year 2009-10. The respective petitioner’s original assessee is ordered to be amalgamated with one Takshasila Gruh Nirman.

The scheme of amalgamation has been sanctioned by the Court, by which the respective petitioners are ordered to be amalgamated into Takshashila Gruh Nirman with effect from 01.04.2010.  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 evident 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 Coram comprising of Md. Nizamuddin, Justice observed that “the impugned notice dated July 27, 2022, is not tenable in the eye of law and all further steps under the said impugned notice also are not tenable in the eye of law.”

The Court allowed the writ petition and 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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