S. 148 : Reassessment-Notice-Non existing company-Merger of companies-Notice served on non-existing company or entity despite the respondents’ knowledge of its non-existence-Notice is quashed and set aside. [S. 2(31), 292B, 148A, 151, 292B, Art. 226]
The petitioner company, City Corporation Limited (CCL), merged with its subsidiary company, Amanora Future Towers Pvt. Ltd. (AFTPL) in 2018, as per the order of the National Company Law Tribunal (NCLT). The petitioner informed the Income Tax Department of the merger in 2020. However, in 2023, the ACIT issued a notice under Section 148 to AFTPL on its pre-merger PAN, despite the fact that AFTPL had ceased to exist after the merger. The petitioner filed writ challenging the notice on the ground that since AFTPL was a non-existent entity, no notice could have been issued to it. Relying on the Supreme Court decision in Maruti Suzuki India Ltd. v. PCIT (2019) 107 taxmann.com 375 /265 Taxman 515/ 416 ITR 613 (SC), the court held that issuing a notice to a non-existent company is a substantive illegality and not merely a procedural lapse under Section 292B. The court quashed and set aside the notice, emphasizing that procedural compliance is critical and cannot be ignored even if a technical glitch occurs.(WP Nos .6076 / 6077 /6078/6079/ 6080/ 6081 of 2023 dt. 29-1-2025) (AY. 2013 -14, 2014-15, 2016-17, 2017-18, 2018-19 2019-20 )
City Corporation Limited v. ACIT (Bom) (HC) www.itatonline.org
(Coram : Hon’ble Shri Justice M.S. Sonak & Hon’ble Shri Justice Jitendra Jain)