HAZEL COMMOTRADE PRIVATE LIMITED vs. UNION OF INDIA AND ORS

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WPO/2456/2022HC CalcuttaWBCHCO004612202206 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 April 28, 2022, and the order under Section 148A(d) and notice under Section 148 both dated July 23, 2022, were not tenable in the eye of law. The Court reasoned that issuing such notices in the name of a non-existing company, especially after amalgamation and intimation to the department, renders them invalid. Consequently, all further steps pursuant to these notices were also deemed not tenable. The writ petition was allowed, and the impugned notices were quashed solely on the ground that they were issued in the name of a non-existing company. The Court clarified that this quashing would not prevent the respondents from issuing a fresh notice in accordance with the law. The operative direction was to quash the impugned notices and allow the writ petition.

What were the facts?

The petitioner, Hazel Commotrade Private Limited, challenged a notice dated April 28, 2022, issued under Section 148 of the Income Tax Act, 1961, for assessment year 2015-16. The petitioner argued that the notice was issued in the name of a transferor company that had already amalgamated on March 3, 2022. Information regarding this amalgamation was provided to the department on February 5, 2021, and May 26, 2022. Despite this, the department had not withdrawn the impugned notice. The petitioner relied on a Gujarat High Court decision and a previous order by the same judge.

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 amalgamated and whose amalgamation has been intimated to the department, is tenable in law? Assessee's Contention: The petitioner argued that the impugned notice is not tenable as it was issued in the name of a non-existing company, post-amalgamation. They cited the decision in Takshashila Realties Pvt. Ltd. Vs. Dy. Commissioner of Income Tax (2016 SCC OnLine Guj 6462) and an order in WPA 1791 of 2020 (Brubeck Resources Pvt. Ltd. & Anr. Vs. Union of India & Ors.). Revenue's Contention: The judgment records no specific arguments from the respondents.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

OD - 2 ORDER SHEET WPO/2456/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE HAZEL COMMOTRADE 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 28th April, 2022 relating to assessment year 2015-16 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 3rd March, 2022 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 5th February, 2021 and 26th May, 2022 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 August, 2021 in WPA 1791 of 2020 (Brubeck Resources Pvt. Ltd. & Anr. Vs. Union of India & Ors.).

2 Considering the submissions of the parties, I am of the view that the impugned notice dated 28th April, 2022 (annexure P-3) and order under Section 148A(d) and notice under Section 148 both dated 23rd July, 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 are quashed solely on the ground that the impugned notices were issued in the name of non-existing company. However, quashing of this notice 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 2456 of 2022 is disposed of. (MD. NIZAMUDDIN, J.) TR/

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