M/s. Bright Town Investment Advisor Private Limited vs. The Income Tax Officer

This writ petition has been filed aggrieved by the initiation of proceedings under Section l48r\ (d) of the lncome Tax Act, 1961, (for short "the Act") against a dissolved or non-existing entity. The proceedings were initiated against Ir4/s.VVSS Estates Private Limited, which stood merged with the petitioner, in a scheme of amalgamation, instituted before the National Company Law Tribunal, tsench-1, Hyderabad. I'he S-cheme of amalgamation was /

Learned counsel for the petitioner relied upon the.iudgments of this High Court in M/s.Virchow Drugs Limited v. The Income Tax Officerrdecided on 20.09.2023 antl also in Nunhems India Private Limited v. The Depufy Commissioner of Income Tax Circle 512 decided on 04.01 .2024. Both these writ petitions stood allowed relying upon the decisions of the Hon'ble Supreme Court. 'wp.No.11247 ot zo23 'wp.r,ro.37863 of 2021

It woutd be relevant at this juncture to take note of the relevant portion of the order passed by this court in W.P.No.11247 of 2023, which is reproduced herein under: *20. The Hon'ble Supreme Court finally endorsing the earlier view of the High court of Delhi in the case of Spice Infotainment, supra, in paragraph Nos.33 to 35 held as under: "ln the present case' despite tl're lact that the AO was inforrned of the amalgamating cornpany having ceased to exist as a result of the approved schente of anralgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was funiamentally at odds with the legal principle that the dmalgamating entity ceases to exist upon the approved scheme of amalg,Iamation. participation in tle proceedings by the appellant in the circumstauces cannot operate as an estoppels against law. This position now holds the filed in view of the judgment of a co- ordinate Bench of two leanred judges which dismissed the appeal of the Revenue in Spice Enfotainment ou 2nd Nov', 2017' The decision in Spice Enfotainment has been fbllowed in the case of the respondent while dismissing the Special Leave Petition for asst- yr. ZOil-lZ.ln doing so, tlris Court has relied on the decision in Spice Enfotairrment. Wefindnoreasontotakeadifferentview.Thereisavalue which the Court must abide by in plomoting the interest of certainty in tax litigation. The view which has been taken by this court in relation tothe respondent for asst. yr' 201l-12 must, in our view be adopted in respect of the preserrt appeal which relates to asst. yr. 2}li_13. Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observi*g t6e requirernent of consistency and certainty. tndividual affairs are conducted and business decisions are rnrd" in the expectation of consistency, uniformity and certainty. To detract f'rom tlrose principles is neither expedient nor desirable. For the teasons, we find no merit in the appeal' The appeat is accordingly dismissed' 'Ihere shall be no order as to costs.t'

It is also relevant at this,iu1gfu?Ft. takc ttote of yet another recent decision of the l{igh court of Bornbay irt the case of SLSA I I i i I _:l I I I I I { I L itI , t i i : iI I t s ! II I I I It 1

Given the aforesaid lacts ar;d circurnstances of the case and also the admitted &rctual rnir-trix, as har; been, revcaled in the preceding paragraphs. \ /c are of ihe lonside[eii view that t['re present is also the casc whibh squarely stands covercd try the dccision of thc Hon'ble Supierne (ourt ir;' the c;ise of Maruti Suzuki (lndia) I-inrited (supra). and the recer"rt decision of the l{igh Court of Boml;ay irr ihe case oi SL,SA INDIA (p) LTD., (supra), and the eailier.iuclgment of-- tlie l-ligh Court of I)elhi in the case of Spice h:firtainrnent (:;rirrra). 2j. The present Writ Petition dt-'serve-c to be ancl is accordingly allowed, hoiding drat the norice dared 24.03.2023 issued section l48A(d) of the Act and rhei consequentiar notice of the same date i-e. 24.03.2023 under Section 148 of the Act, both being bad in law, are set aside. as the entire proceetlings itself is against a non-existing cornpany."

Keeping in view the aforesaid .iudicial prece<rents and the decision rendered by" the Fforr'ble suprcmc court in the case of PCIT v. MARUTI suzuKl INDIA LIivrI'I'ED''. rue areof the considered opinion that thc prc:.sent is a fit casc which cleserves to be allorved ancl is acc:ordingly allorved. 'fhe impugned Notice dated 17.06.201 and the consequential proceedings drawn by the respondent authorities stan(ls set asideiquashecl. However. the right of the Department stands resen ed to initiate appropriate proceedings, if they' so want, against the rnerged contpany." 'ArR oNLtNE zotg sctt4 I

In view of'the judicial prqcedent which is consistently being foltowed by the Hon''ble Supreme Court as also by atl the High Courts, we are inclined to allow the instant writ petition as well' As a consequence, the impugned ngtice issued against the going company i.e. M/s.VVSS Estates Private Limi-ted is set aside reserving the right of the Department of availing appropriate legal remedies for the statute still permits against the successor company i.e. the petitioner.

It is needless. to merrtion that the petitioner also, if at al[, if the Income Tax ,ifirf", initiates any proceedings would be entitled represent and contest the case on merits, in accordance with law'

Accordingly, this Writ Petition stands allowed. No order as to costs. Miscellaneous applications pencling, if otrY, shall stand closed. T.SREENIVAS REDDY ASSISTANT REGISTRAR //// SECTION OFFICER

PSK. TKS qJ-