CREATIVE VINTRADE LLP vs. ASSISTANT /DY COMMISSIONER OF INCOME TAX AND ORS

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WPA/25916/2022HC CalcuttaWBCHCA052068202201 December 2022Author: HON'BLE JUSTICE MD. NIZAMUDDIN2 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal held that the impugned notice and order dated July 28, 2022, were not sustainable in law. The reasoning was based on the admitted fact, supported by records, that the assessment proceedings were initiated against a non-existing entity, Creative Vintrade Private Limited, which had already been converted into Creative Vintrade LLP. This conversion had been previously intimated to the Income Tax Authority. Consequently, the Tribunal quashed the impugned notice and order. The disposal of the writ petition would not preclude the Income Tax authority from issuing any fresh notice in accordance with law.

What were the facts?

The petitioner, Creative Vintrade LLP, challenged a notice and order dated July 28, 2022, issued under Sections 148 and 148A(d) of the Income Tax Act, 1961, for assessment year 2013-14. The impugned action was initiated against a non-existing entity, Creative Vintrade Private Limited. The petitioner contended that the company had been converted into an LLP (Creative Vintrade LLP) long ago and this conversion was intimated to the Income Tax Authority on February 22, 2018. The petitioner argued that the notice and order were unsustainable due to these admitted facts supported by records.

What were the issues?

1. Whether the impugned notice and order dated July 28, 2022, issued under Section 148 and 148A(d) of the Income Tax Act, 1961, are sustainable in law, given that they were issued against a non-existing entity (Creative Vintrade Private Limited) which had already been converted into Creative Vintrade LLP, a fact previously intimated to the Income Tax Authority. Assessee's contentions: The petitioner argued that the notice and order were liable to be quashed as they were issued against a defunct entity. They relied on the fact that the conversion to LLP was duly intimated to the respondent authority on February 22, 2018, and this fact was supported by records. Revenue's contentions: The learned advocate for the respondent Income Tax Authority was not in a position to contradict the petitioner's allegations and submissions, which were supported by records.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A(d)

AI-generated summary — verify with the full judgment below

1.12.

2022 Asssistant/Deputy Commissioner of Income Tax, Ward 8(2), Kolkata & Ors. Mr. Avra Mazumder, Mr. Binayak Gupta, Mr. Suman Bhowmik … for the petitioner Mr. Tilak Mitra …. for Union of India Affidavit of service filed in Court be kept with the records. Heard learned Counsel appearing for the parties. By this matter petitioner has challenged the impugned notice and order dated 28th July, 2022 relating to assessment year 2013-14 under Section 148 and 148A(d) of the Income Tax Act, 1961 which has been issued in the name of Creative Vintrade Private limited, which according to the petitioner, is non-existing entity and since it has already been converted as LLP (Creative Vintrade LLP) with identification No. AAG-0819 under the LLP Act, 2008, long back and this fact of conversion was already intimated to the respondent Income Tax Authority by letter dated 22nd February, 2018 which appears at page 61 being annexure P/1 to the writ

2 petition and petitioner submits that in view of this admitted fact substantiated by records, the aforesaid impugned order is not sustainable in law and is liable to be quashed. Learned advocate appearing for the respondent Income Tax Authority is not in a position to contradict the aforesaid allegation and submission of the petitioner which is supported by records. Considering the submission of the parties, this writ petition being WPA 25916 of 2022 is disposed of by quashing the impugned notice and order dated 28th July, 2022 being annexure P-18 and P-19 to the writ petition. However, disposal of this writ petition will not prevent the Income Tax authority concerned to issue any fresh notice, in the matter in accordance with law.

(Md. Nizamuddin, J.)

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