AO Can’t Issue Notice in Name of a Non-existing Amalgamating Co. Merely Because its PAN is Active | HC
- Blog|Income Tax|News|
- 2 Min Read
- By Taxmann
- Last Updated on 30 September, 2023
Judiciary and Counsel Details
- Ravindra Maithani, J.
- Piyush Kaushik & Sahil Mullick, Advs. for the Petitioner.
- H.M. Bhatia, Adv. for the Respondent.
Facts of the Case
In the instant case, Delta Power Solutions India Pvt. Ltd (DPS) and assessee-Delta Electronics India Pvt. Ltd. (DIN) proposed a scheme for amalgamation dated 01-04-2018. DPS was the amalgamating company, and DIN was the amalgamated company.
The National Company Law Tribunal (NCLT) approved the amalgamation processes on 31-01-2019. The proposed scheme of amalgamation was also informed to the revenue by a communication dated 08-08-2018.
Post approval by the NCLT, the AO was further informed by a communication dated 15.02.2020. However, AO issued a notice under section 148A against amalgamating Co. specifying that its PAN was active. Later, an order under section 148A(d) was passed, reopening the assessment of the amalgamating company.
Assessee filed writ petition before the High Court against such reopening of assessment.
High Court Held
The High Court held that the NCLT sanctioned the scheme of amalgamation, and the assessee duly informed AO about it. In Para 13 of the judgment of the NCLT, observation has been made with regard to the submissions that AO made in the amalgamation proceedings.
Mere activation of PAN number may not give a right to the revenue to issue notice to a non-existent entity. In the instant case, the notice was given to the amalgamating company, which was a non-existent entity, after the appointed date, i.e. 01.04.2018.
Admittedly, the order under Section 148A(d) was passed by AO against a non-existent entity. Therefore, the order was bad in the eyes of the law.
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied