M/S LINK COMMODITIES LLP vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX 2 KOLKATA AND ORS

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WPA/20500/2022HC CalcuttaWBCHCA040593202216 September 2022Author: HON'BLE JUSTICE MD. NIZAMUDDIN2 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal quashed the impugned order dated 27th July, 2022. The reasoning was based on the petitioner's submission, supported by records and not contradicted by the revenue, that the order was issued in the name of a non-existing entity (Link Commodities Pvt. Ltd.) which had already been converted into an LLP (Link Commodities LLP). The fact of conversion was previously intimated to the Income Tax authority. The Tribunal held that the order was not sustainable in law due to being issued against a non-existent entity. The operative direction was to quash the impugned order. The Tribunal also noted that the dismissal of the writ petition would not prevent the Income Tax Authority from issuing a fresh notice in accordance with law. No issue was expressly left undecided.

What were the facts?

The petitioner, M/s. Link Commodities LLP, challenged an order dated 27th July, 2022, issued under Section 148 of the Income Tax Act, 1961, for assessment year 2013-2014. The petitioner contended that the order was issued in the name of a non-existing entity, Link Commodities Pvt. Ltd., which had already been converted into an LLP (Link Commodities LLP) with identification number AAC-2237 under the LLP Act, 2008. This conversion was communicated to the Income Tax authority by a letter dated 14th August, 2014. The petitioner argued that due to this admitted fact, the impugned order was unsustainable.

What were the issues?

1. Whether the impugned order dated 27th July, 2022, issued under Section 148 of the Income Tax Act, 1961, for assessment year 2013-2014, is sustainable in law when it was issued in the name of a non-existing entity (Link Commodities Pvt. Ltd.) that had already been converted into an LLP (Link Commodities LLP)? Assessee's contention: The petitioner argued that the order was invalid as it was passed against a non-existent entity, Link Commodities Pvt. Ltd., which had been converted into Link Commodities LLP. This conversion was duly intimated to the Income Tax authorities on 14th August, 2014, and supported by records. Therefore, the impugned order should be quashed. Revenue's contention: The learned advocate for the respondent Income Tax Authority was not in a position to contradict the petitioner's submission and the supporting records.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

16.09.

2022. p.b. Sl. No.

47.

W.P.A. 20500 of 2022 M/s. Link Commodities LLP Vs. The Principal Commissioner of Income Tax-2, Kolkata & Ors. Mr. Anurag Roy, Mr. Kushagra Shah. ……..for the petitioner. Mr. Om Narayan Rai. ……..for the UOI. Heard learned advocates appearing for the parties. The affidavit of service filed in Court today be kept with the record. By this writ petition, petitioner has challenged the impugned order dated 27th July, 2022 relating to assessment year 2013-2014 under Section 148 of the Income Tax Act, 1961 which has been issued in the name of Link Commodities Pvt. Ltd. which according to the petitioner, is non-existing entity and since it has already been converted as LLP Link Commodities LLP with identification No.AAC-2237 under the LLP Act, 2008, and this fact of conversion was already intimated to the respondent Income Tax authority by letter dated 14th August, 2014 which appears at page 25 being Annexure P/5 to the writ petition and petitioner submits that in view of this admitted fact substantiated by records, the 2 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 20500 of 2022 is disposed of by quashing the impugned order dated 27th July, 2022 being Annexure P-11 to the writ petition. However, dismissal of this writ petition will not prevent the Income Tax Authority concerned to issue any fresh notice in the matter in accordance with law. With these observations and directions, this writ petition stands disposed of. (Md. Nizamuddin, J.)

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