Calcutta High Court Quashes Income Tax Notices Issued In The Name Of Non-Existing Company

The Calcutta High Court has quashed the income tax notice issued in the name of a non-existing company, in spite of the department having notice and knowledge of non-existence of the company.

The single bench of Justice Md. Nizamuddin observed that the notice has been issued in the name of the company, which has already been amalgamated on December 12, 2016 with effect from April 1, 2015, and that the department has been intimated about this amalgamation, which is a matter of record, and that such a notice in the name of a non-existing company is not tenable in the eye of the law.

The petitioner has challenged the notice dated July 27, 2022, relating to assessment year 2013–14 under Section 148 of the Income Tax Act of 1961, which is a transferor company.

The petitioners were ordered to be amalgamated with one Takshasila Gruh Nirman (subsequently named Takshashila Realties Pvt. Ltd.). The scheme of amalgamation has been sanctioned by the Court, by which the respective petitioners were ordered to be amalgamated into Takshashila Gruh Nirman (subsequently named Takshashila Realities Pvt. Ltd.) with effect from April 1, 2010.

The petitioner contended that the notice has been issued in the name of the company, which has already been amalgamated as of December 12, 2016 with effect from April 1, 2015. The department has been intimated about this amalgamation, which is a matter of record, and registering a non-existing company is not tenable in the eye of the law.

The court held that the notices, which were issued against the non-existent company, could not be sustained and deserved to be quashed and set aside.

Case Title: S. K. Finserve Private Limited Vs Assistant Commissioner of Income Tax

Case No: WPA 4551 OF 2023

Citation: 2023 LiveLaw (Cal) 74

Date: 20.03.2023

Counsel For Petitioner: Avra Mazumder, Suman Bhowmik, Samrat Das

Counsel For Respondent: Vipul Kunadalia, Prithu Dudhoria

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