BAXTER INDIA PRIVATE LIMITED GAMBRO INDIA PRIVATE LIMITED NOW MERGED WITH BAXTER INDIA PRIVATE LIMITED vs. ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE- 7 & ORS.

PDF · subscribers
W.P.(C)-8699/2022HC Delhi2022:DHC:216831 May 20223 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that none of the submissions and contentions advanced by the parties had been considered by the Assessing Officer. The Court observed that the issue of jurisdiction is a mixed question of fact and law. Therefore, it was necessary for the Assessing Officer to provide an opinion on this issue. Consequently, the Court set aside the impugned assessment order and demand notice. The Assessing Officer was directed to consider all the submissions and contentions made by the parties, including the reply filed by the petitioner on March 29, 2022, and pass a fresh reasoned order in accordance with the law within twelve weeks. The Court did not decide the merits of the case but remanded it for fresh consideration by the Assessing Officer.

What were the facts?

The petitioner, Baxter India Private Limited (formerly Gambro India Private Limited), filed a writ petition challenging an assessment order dated March 31, 2022, and a demand notice dated March 31, 2022, for Assessment Year 2016-17. The assessment order was passed under Section 147 read with Sections 144 & 144B of the Income Tax Act, 1961, imposing a demand of Rs. 8,58,76,140/-. The petitioner argued that the notice was issued by a non-jurisdictional officer to a non-existent entity, as Gambro India Private Limited had merged with Baxter India Private Limited effective April 1, 2015, and was dissolved. The petitioner contended that assessment against a non-existent entity is void ab initio, citing Supreme Court and High Court decisions. They also stated that the petitioner was already being assessed by the jurisdictional AO in Delhi for the relevant financial year.

What were the issues?

1. Whether the assessment order and demand notice issued for Assessment Year 2016-17 against Gambro India Private Limited, a merged and dissolved entity, are void ab initio due to lack of jurisdiction and assessment of a non-existent entity? (Question of law and fact, turning on Section 147, 144, 144B, 156 of the Income Tax Act, 1961). Assessee's Contentions: - The assessment order and demand notice are void ab initio as they were issued by a non-jurisdictional assessing officer to a non-existent entity. - Gambro India Private Limited merged with the petitioner with effect from April 1, 2015, and stands dissolved. - Assessment against a non-existent entity is void ab initio, relying on the Supreme Court decision in Principal Commissioner of Income tax vs. Maruti Suzuki (India) Limited and this Court's decision in Spice Infotainment vs. Commissioner of Income tax. - Since Gambro India ceased to exist, it had no separate existence, audited financials, or income to be assessed separately. - The petitioner is already being assessed by the jurisdictional AO in Delhi for the relevant FY, making the impugned reassessment proceedings a second and separate proceeding against a non-existent company, thus void ab initio. Revenue's Contentions: - The present case is covered by the Supreme Court judgment in Principal Commissioner of Income Tax (Central) – 2 vs. Mahagun Realtors (P) Ltd.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 156

AI-generated summary — verify with the full judgment below

W.P.(C) 8699/2022 Page 1 of 3 $~31 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 8699/2022 & CM APPL.26224/2022 BAXTER INDIA PRIVATE LIMITED GAMBRO INDIA PRIVATE LIMITED NOW MERGED WITH BAXTER INDIA PRIVATE LIMITED ..... Petitioner Through: Mr. Kamal Sawhney, Mr. Prashant Meharchndani, Mr. Arun Bhadauria, Mr. Nikhil Agarwal and Mr. Nishank Vashistha, Advocates. versus ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE- 7 & ORS. ..... Respondents Through: Mr. Zoheb Hossain with Mr. Vipul Agarwal and Mr. Parth Semwal, Advocates. % Date of Decision: 31st May, 2022 CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J (Oral): 1. Present writ petition has been filed challenging the impugned assessment order dated 31st March, 2022 passed for the Assessment Year 2016-17 under Section 147 read with Sections 144 & 144B of the Income Tax Act, 1961 (for short ‘Act’) as well as demand notice dated 31st March, 2022:DHC:2168-DB

W.P.(C) 8699/2022 Page 2 of 3 2022 issued under Section 156 imposing a demand of Rs.8,58,76,140/-. 2. Learned counsel for the Petitioner states that notice has been issued by a non-jurisdictional assessing officer to a non-existent entity. He states that the Respondent No.2 (the then jurisdictional Assessing Officer) was duly intimated much before he wrongfully initiated the impugned reassessment proceedings that Gambro India Private Limited has merged with Petitioner with effect from 01st April, 2015 and therefore stands dissolved. He states that the present case is squarely covered by the decision of the Supreme Court in Principal Commissioner of Income tax, New Delhi vs. Maruti Suzuki (India) Limited, (2020) 18 SCC 331 and this Court’s decision in Spice Infotainment vs. Commissioner of Income tax, (2012) 247 CTR (Del) 500 confirmed by the Supreme Court’s order dated 02nd November, 2018, wherein the Supreme Court has held that assessment against a non-existent entity is void ab initio. 3. He further states that since Gambro India has ceased to exist w.e.f 01st April, 2015, it neither has a separate existence nor has any audited financials and consequentially no income to be assessed separately for the relevant Financial Year (FY) 2015-16. He states that the Petitioner has already filed return of income for the relevant FY with Respondent No.3 (jurisdictional AO, Delhi) and is already being assessed in Delhi by Respondent No.3 for the relevant FY and reassessment proceedings under Section 148 are pending against the Petitioner before the Respondent No.3. Thus, he states that a second and separate reassessment proceeding for the relevant FY vide the impugned notice and impugned order against a non-existent company, Gambro India, is void ab initio. 2022:DHC:2168-DB

W.P.(C) 8699/2022 Page 3 of 3 4. Per contra, learned counsel for the Respondents states that the present case is covered by the latest judgment of the Supreme Court in Principal Commissioner of Income Tax (Central) – 2 vs. Mahagun Realtors (P) Ltd., 2022 SCC OnLine SC 407. 5. In rejoinder, learned counsel for the Petitioner states that the impugned assessment order is contrary to the judgment of the Apex Court in Mahagun Realtors (P) Ltd. (supra). 6. However, a perusal of the paper book reveals that none of the aforesaid submissions and contentions have been considered by the Assessing Officer. Since in the present case, the issue of jurisdiction is a mixed question of fact and law, this Court is of the view that it is necessary that the Assessing Officer gives its opinion on the said issue. Accordingly, this Court sets aside the impugned assessment order and demand notice under Section 156. The Assessing Officer is directed to consider the aforesaid submissions and contentions advanced by the parties as well as the reply dated 29th March, 2022 filed by the Petitioner and pass a fresh reasoned order in accordance with law within twelve weeks. 7. With the aforesaid direction, the present writ petition and application stand disposed of. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J MAY 31, 2022 AS 2022:DHC:2168-DB

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →