Reassessment Notice Issued to a Non-Existing Company Is Invalid: Karnataka HC [Read Order]
![Reassessment Notice Issued to a Non-Existing Company Is Invalid: Karnataka HC [Read Order]](https://www.taxscan.in/wp-content/uploads/2023/06/Reassessment-Notice-Issued-Non-Existing-Company-Is-Invalid-Karnataka-HC-TAXSCAN.jpg "Reassessment Notice Issued to a Non-Existing Company Is Invalid: Karnataka HC [Read Order]")
The Karnataka High Court in a recent judgement has held that the reassessment notice issued under Income Tax Act, 1961 against a non-existing company is invalid. Coffee Day Resorts (MSM) Pvt. ltd., the petitioner has filed the present writ petition seeking quashing of the order passed by the first respondent under Section 148A (d) of the Income Tax Act, 1961 rejecting...
The Karnataka High Court in a recent judgement has held that the reassessment notice issued under Income Tax Act, 1961 against a non-existing company is invalid.
Coffee Day Resorts (MSM) Pvt. ltd., the petitioner has filed the present writ petition seeking quashing of the order passed by the first respondent under Section 148A (d) of the Income Tax Act, 1961 rejecting the petitioner's objection against initiation of re-assessment of proceedings for the Assessment year 2019-20.
The petitioner Coffee Day Resorts (MSM) Pvt. Ltd., has questioned the validity of the re-assessment proceedings. Shankar Resources Pvt. Ltd., was Non-Banking Financial Company (NBFC) and merged subsequently into the petitioner company by an order of amalgamation of National Company Law Tribunal (NCLT) dated 18.06.2019 with the appointed dated being 01.04.2018.
It was submitted that respondent authorities issued a notice under Section 148A (b) of the Act on 28.01.2023 calling upon Shankar Resources Private Limited to show-cause as to why in view of the details contained in enclosures mentioned in point no.1 above, a notice under Section 148 of the Income Tax Act, 1961 should not be issued.
The petitioner stated that the company to which notice under Section 148A (b) came to be issued to M/s.Shankar Resources (P) Ltd., with PAN Number AAHCS6289D has amalgamated with M/s.Coffee Day Resorts (MSM) Pvt. Ltd., with PAN Number AADCC6017D with effect from 01.04.2018. Accordingly, the Company M/s.Shankar Resources (P) Ltd., ceased to exist from 01.04.2018 and there
In light of the judgment of the Apex Court in the case of Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd. reported in (2019), it was observed that a notice and assessment order passed in the name of the non-existing company is a substantive illegality and is an order passed without jurisdiction.
The single judge bench of Justice S Sunil Dutt Yadav observed that since the petitioner company was not an existing entity as of the date of issuance of a notice, the order and the notice under Section 148A (b) dated 28.01.2023 was set aside.
To Read the full text of the Order CLICK HERE
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