|DATE:||(Date of pronouncement)|
|DATE:||April 13, 2011 (Date of publication)|
|Click here to download the judgement (i_k_agencies_notice_merging_co.pdf)|
Reopening Notice issued to Amalgamating Co Void & not saved by s. 292B
Abhudey Properties Pvt. Ltd was amalgamated with the assessee (I.K. Agencies) and wound up w.e.f. 1.4.1995 as a result of which the assessee took over all assets and liabilities of the wound up company. On 20.1.1997, the WTO issued a notice u/s 17 of the W.T. Act (= s. 147) on Abhudey Properties Pvt. Ltd directing it to file its wealth-tax return for the relevant period when the said company was no more in existence. As no return was filed by the wound up company, the WTO issued a notice dated 10.9.1997 u/s 16(4) on the assessee pursuant to which the assessee filed a return. The WTO thereafter passed an assessment order u/s 16(3)/17. The assessee challenged the reassessment on the ground that the notice u/s 17 having been addressed to the wound-up company, all proceedings were void. HELD upholding the challenge:
(i) The law is well settled that the jurisdiction to reopen a proceeding depends upon issue of a valid notice. If the notice is not properly issued, the proceedings are ultra vires. A notice issued on a non-existent person is void. The fact that the assessee has filed a return in response to the notice makes no difference;
(ii) S. 42C (=s. 292B) does not save the defect in the notice. The defect goes to the root of the jurisdiction to reopen the proceedings.