Vildirect: IncomeTax-caselaws-2016-VIL-544-GUJ-DT

2016-VIL-544-GUJ-DT

GUJARAT HIGH COURT

SPECIAL CIVIL APPLICATION NO. 16513 of 2016 With SPECIAL CIVIL APPLICATION NO. 17596 of 2016 With SPECIAL CIVIL APPLICATION NO. 17598 of 2016 With SPECIAL CIVIL APPLICATION NO. 17599 of 2016

Date: 05.12.2016

TAKSHASHILA REALTIES PVT LTD

DY COMMISSIONER OF INCOME TAX CIRCLE 4 (1) (2)

FOR THE PETITIONER : MR MANISH J SHAH, ADVOCATE
FOR THE RESPONDENT : MR NITIN K MEHTA, ADVOCATE

BENCH

MR. M.R. SHAH AND MR. B.N. KARIA, JJ.

JUDGMENT

(PER : HONOURABLE MR.JUSTICE M.R. SHAH)

[1.0] RULE. Shri Nitin Mehta, learned Counsel waives service of notice of rule on behalf of the respondent. In the facts and circumstances of the case and with the consent of the learned advocates appearing on behalf of the respective parties, all these petitions are taken up for final hearing today.

[2.0] In all these petitions under Article 226 of the Constitution of India, respective petitioners have prayed for an appropriate writ, order or direction to quash and set aside the impugned notice /notices under Section 148 of the Income Tax Act issued by the Assessing Officer to reopen the assessment for the Assessment Year 2009-10.

[2.1] Number of submissions have been made by the learned Counsels appearing on behalf of the respective parties. However, for the reasons stated hereinbelow, the impugned notices are required to be quashed and set aside only on one ground without touching and /or considering the other grounds. Only one ground on which the impugned notices are required to be quashed and set aside is, whether the impugned notices under Section 148 of the Income Tax Act, which has been issued against the amalgamating Company, can be sustained or not?

[3.0] Heard the learned Counsel appearing on behalf of the respective parties. It is not in dispute that the respective petitioners are already ordered to be amalgamated with Takshashila Realties Pvt Ltd with effect from 01/04/2010 pursuant to the scheme of amalgamation sanctioned by this Court. It is also not in dispute that the impugned notices under Section 148 of the Income Tax Act to reopen the reassessment for the Assessment Year 2009-10 in the case of the respective petitioners (amalgamating Company) (original assessee) have been issued on 21/01/2011. It is the case on behalf of the respective petitioners that though in the objections, against the reasons recorded to reopen the assessment it was specifically pointed out and it was requested to drop the reassessment proceedings against the respective petitioners, the Assessing Officer has not agreed with the said objections solely on the ground that the proceedings under Section 147 of the Income Tax Act are initiated for the Assessment Year 2009- 10 and the respective petitioners are amalgamated into Takshashila Gruh Nirman (subsequently named as Takshahila Realties Pvt. Ltd.) on 01/04/2010 and hence, the Company was existent for the period for which the proceedings are being initiated. Hence, the respective petitioners have preferred the present Special Civil Applications under Article 226 of the Constitution of India.

[4.0] Shri J.P. Shah, learned Counsel appearing on behalf of the respective petitioners has relied upon the decision of the Division Bench of this Court in the case of Khurana Engineering Ltd. Vs. Deputy Commissioner of Income- Tax reported in [2014] 364 ITR 600 (Guj.) and it is submitted that once the original assessee is ordered to be amalgamated, notice for assessment / reassessment against the amalgamated Company / transferor Company shall not be sustainable. It is submitted that in the present case when the impugned notices are issued in the name of the original assessee, the same has been issued against the non-existent Company as after the order passed by this Court sanctioning the scheme of amalgamation and the original assessee – amalgamating Company is ordered to be amalgamated into Takshashila Gruh Nirman (subsequently named as Takshahila Realties Pvt. Ltd.) such a notice against the non existent Company – amalgamating Company is not permissible. Making the above submissions and relying upon the above decision, it is requested to quash and set aside the impugned notices under Section 148 of the Income Tax Act, which are issued against the original assessee – amalgamating Company – transferor Company.

[5.0] Shri Nitin Mehta, learned Counsel appearing on behalf of the revenue has tried to oppose the present petitions by submitting that as the impugned notices under Section 148 of the Income Tax Act are issued to reopen the assessment for the Assessment Year2009-10, and therefore, at the relevant time /during the assessment year under consideration, the assessee Company was in existence, and therefore, the impugned notices under Section 148 of the Income Tax Act against the original assessee – amalgamating Company /transferor Company is /are permissible.

[5.1] Now so far as reliance placed upon the decision of Division Bench of this Court in the case of Khurana Engineering Ltd. (Supra) is concerned, it is submitted by Shri Nitin Mehta, learned Counsel appearing on behalf of the revenue that in the case before the Division Bench notice under Section 142 of the Income Tax Act was for the preappointed date. It is submitted that therefore on facts the said decision shall not be applicable to the facts of the case on hand.

[6.0] Heard the learned Counsels appearing on behalf of the respective parties at length. At the outset, it is required to be noted and it is not in dispute that 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. It is also not in dispute that the respective petitioners – original assessee are ordered to be amalgamated with one Takshashila Gruh Nirman (subsequently named as Takshahila Realties Pvt. Ltd.). The scheme of amalgamation has been sanctioned by this Court, by which the respective petitioners are ordered to be amalgamated into Takshashila Gruh Nirman (subsequently named as Takshahila Realties Pvt. Ltd.) 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 cannot be disputed 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. Under the circumstances, the impugned notices, which are issued against the non existent Company, cannot be sustained and the same deserves to be quashed and set aside. Identical question came to be considered by the Division Bench of this Court in the case of Khurana Engineering Ltd. (Supra). It was the case where the original assessee Company was ordered to be amalgamated with effect from 01/04/2009. Notice under Section 148 of the Income Tax Act was issued against and the transferor Company – amalgamating Company on 20/06/2012. The Division Bench of this Court in a writ petition filed by the transferor Company has observed and held that on and from the appointed date, as per the scheme of amalgamation sanctioned by the Court, the transferor Company shall not be in existence, and therefore, the impugned notices against the transferor Company (non existent Company) shall not be permissible. The Division Bench has observed that in such a situation the assessment can always be made and is supposed to be made on the transferee Company taking into account the income of both the transferor and transferee Company and also the more advisable course from the point of view of the revenue would be to make one assessment on the transferee Company and to make separate protective assessments on both the transferor and transferee Companies separately. Ultimately, the Division Bench has held that the transferor Company would no longer be amenable to the assessment proceedings for the Assessment Year 2010-11, and therefore, notice for producing documents for such assessment would therefore be invalid.

In view of the above binding decision of the Division Bench of this Court also, the impugned notices under Section 148 of the Act issued against the original assessee – amalgamating Company for the Assessment Year 2009-10 cannot be sustained and the same deserves to be quashed and set aside on the aforesaid ground alone.

[7.0] In view of the above and for the reasons stated hereinabove, all these petitions succeed. The impugned notices are hereby quashed and set aside. Rule is made absolute to the aforesaid extent. In the facts and circumstances of the case, there shall be no order as to costs.

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