Delhi High Court Quashes Reassessment Order In The Name Of A Non-Existing Entity
The Delhi High Court has quashed the reassessment order in the name of a non-existing entity.The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that not only was the notice issued in the name of the transferor company but the order under Section 148A(d) of the Income Tax Act, as well as the notice under Section 148, have been issued on the PAN of the...
The Delhi High Court has quashed the reassessment order in the name of a non-existing entity.
The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that not only was the notice issued in the name of the transferor company but the order under Section 148A(d) of the Income Tax Act, as well as the notice under Section 148, have been issued on the PAN of the transferor company.
The Aureole Impex Pvt. Ltd. (Transferor Company) was merged with M/s. Rajasthan Global Securities Private Limited (Transferee Company). After the amalgamation order passed by the High Court, the company stood dissolved without winding up. There was no obligation or scope under the law for any income tax returns to be filed by Aureole Impex Pvt. Ltd.
The petitioner, Rajasthan Global Securities Private Limited, had filed its income tax return for the assessment year 2013–14, inclusive of the financial data and numbers of Aureole Implex Pvt. Ltd., and a scrutiny assessment under Section 143(3) was also done. The then Assessing Officer was duly informed that Aureole Impex Pvt. Ltd. had been amalgamated with M/s. Rajasthan Global Securities Limited.
The petitioner has assailed the notice under Section 148 and stated that the notice was void as it was issued in the name of a non-existing entity.
The respondent contended that Sections 148A(b) and 148A(d) are procedural provisions and no prejudice was caused to the petitioner by issuing the initial notice to the transferor company, as the final notice as well as the order have been issued to the correct legal entity.
The court quashed the order passed under Section 148A(d) of the Act as well as the consequential notice issued under Section 148 of the Act for the Assessment Year year.
"The notice issued under Section 148A(b) of the Act is deemed to have been issued to the transferee company i.e. the Petitioner. In the interest of justice, the Petitioner is given the liberty to file its reply/response to the notice issued under Section 148A(b) of the Act along with all the relevant documents within two weeks from today. The Assessing Officer is directed to pass a fresh order under Section 148A(d) of the Act within eight weeks thereafter in accordance with law," the court said.
Case Title: Rajasthan Global Securities Private Limited Versus ACIT
Citation: 2022 LiveLaw (Del) 1072
Date: 03.11.2022
Counsel For Petitioner: Advocate Kapil Goel
Counsel For Respondent: Advocate Ruchir Bhatia