USHA PROPERTIES DEVELOPMENT PRIVATE LIMITED vs. UNION OF INDIA AND ORS

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WPO/2447/2022HC CalcuttaWBCHCO004601202206 September 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the impugned notice dated March 30, 2019, and the subsequent order under Section 148A(d) and notice under Section 148 both dated June 29, 2022, were not tenable in the eye of law. The primary reasoning was that the notices were issued in the name of a non-existent company, as the transferor company had already been amalgamated. Consequently, all further steps taken pursuant to these notices were also deemed not tenable. The High Court quashed the impugned notices and order. However, the court clarified that this quashing would not prevent the respondents from issuing a fresh notice in accordance with the law. The writ petition was allowed on this specific ground. No affidavits were called for, and the allegations in the writ petition were not deemed denied.

What were the facts?

The petitioner, Usha Properties Development Private Limited, filed a writ petition challenging a notice dated March 30, 2019, issued under Section 148 of the Income Tax Act, 1961, for assessment year 2013-14. The petitioner contended that the notice was issued in the name of a transferor company that had already been amalgamated with retrospective effect from April 1, 2018, with the amalgamation date being December 13, 2018. The department was informed of this amalgamation on May 23, 2019. Despite this information, the department had not withdrawn the impugned notice. The petitioner argued that a notice issued to a non-existent company is not legally tenable. The High Court considered the submissions and the procedural history.

What were the issues?

1. Whether a notice issued under Section 148 of the Income Tax Act, 1961, in the name of a company that has already been amalgamated and ceased to exist is legally tenable? Assessee's Contention: The petitioner argued that the impugned notice dated March 30, 2019, issued under Section 148, is not tenable in law because it was issued in the name of a non-existent company. The company had amalgamated on December 13, 2018, with retrospective effect from April 1, 2018, and the department was duly intimated. The petitioner relied on the Gujarat High Court's decision in Takshashila Realties Pvt. Ltd. Versus Dy Commissioner of Income Tax (2016 SCC OnLine Guj 6462) and a previous order by the same judge in Brubeck Resources Pvt. Ltd. & Anr. Vs. Union of India & Ors. Revenue's Contention: The judgment does not record any specific arguments made by the respondents (Union of India and Ors.).

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

OD - 1 ORDER SHEET WPO/2447/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE USHA PROPERTIES DEVELOPMENT PRIVATE LIMITED VS UNION OF INDIA AND ORS BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date: 6th September, 2022.

Appearance: Mr. Pranit Bag, Adv. Mr. Brijesh Kumar Singh, Adv. …For the Petitioner Mr. Smarajit Roy Chowdhury, Adv. …For the Respondents The Court : Heard learned advocates appearing for the parties. In this writ petition, petitioner has challenged the impugned notice dated 30th March, 2019 relating to assessment year 2013-14 under Section 148 of the Income Tax Act, 1961 in the name of transferor company on the ground that the noticee has already been amalgamated on 13th December, 2018 with retrospective effect from 1st April, 2018 and the department has been intimated about this amalgamation which is matters of record and such notice in the name of a non-existing company is not tenable in the eye of law since information of such amalgamation has already given to the respondent on 23rd May, 2019 received by the respondent office on 28th May, 2019 yet the Respondent concerned has not withdrawn the impugned notice. In support of his contention Mr. Bag, learned advocate appearing for the petitioner has relied on a decision of the Hon’ble Gujarat High Court in the case of Takshashila Realties Pvt. Ltd. Versus Dy Commissioner of Income Tax reported in 2016 SCC OnLine Guj 6462 and specifically relies on Paragraph 10 of the said judgment and also my own order dated 2nd

2 August, 2021 in WPA 1791 of 2020 (Brubeck Resources Pvt. Ltd. & Anr. Vs. Union of India & Ors.). Considering the submissions of the parties, I am of the view that the impugned notice dated 30th March, 2019 (annexure P-3) and order under Section 148A(d) and notice under Section 148 both dated 29th June, 2022 (annexure P-7) to the writ petition are not tenable in the eye of law and all further steps pursuant to the said impugned notices/order also are not tenable in the eye of law and the same are quashed. The writ petition is allowed and the impugned notices/order are quashed solely on the ground that the impugned notices were issued in the name of non-existing company. However, quashing of the notices will not prevent the respondents from issuing fresh notice in accordance with law. Since no affidavits have been called for, allegations made in the writ petition are not deemed to have been denied by the respondents. Accordingly, WPO 2447 of 2022 is disposed of. (MD. NIZAMUDDIN, J.) TR/

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