PARAMOUNT POLYMERS PVT LTD vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 19(1), NEW DELHI AND ANR.

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W.P.(C)/13480/2022HC DelhiDLHC01035408202226 September 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Delhi, considering the statement made by the revenue's counsel, set aside the impugned order passed under Section 148A(d) and the notice issued under Section 148, both dated July 31, 2022. The matter was remanded back to the Assessing Officer for a fresh decision in accordance with the law within four weeks. The court noted that if the petitioner remained aggrieved by the fresh decision, they would be at liberty to file appropriate proceedings. The writ petition and applications were disposed of accordingly. No specific finding was given on the merits of the amalgamation or the validity of the reopening notice, as the matter was remitted for fresh consideration.

What were the facts?

The petitioner, Paramount Polymers Pvt Ltd, filed a writ petition challenging an order dated July 31, 2022, passed under Section 148A(d) and a notice dated July 31, 2022, issued under Section 148 of the Income Tax Act, 1961, for assessment year 2017-18. The revenue alleged escapement of income amounting to Rs. 33,67,382/- on the grounds that the erstwhile company was a non-filer. The petitioner contended that the erstwhile company had amalgamated with them via an NCLT order dated November 8, 2017, and all its transactions, including the impugned ones, were duly disclosed, offered to tax, and assessed by the revenue. The petitioner also highlighted that the assessment under Section 143(3) for the relevant AY was already finalized for the petitioner and that the revenue had dropped similar proceedings for the erstwhile company for AY 2018-19 on similar facts.

What were the issues?

1. Whether the order passed under Section 148A(d) and the notice issued under Section 148 of the Income Tax Act, 1961, for assessment year 2017-18 are valid, considering the amalgamation of the erstwhile company with the petitioner and the prior finalization of assessment for the petitioner for the said year? Assessee's Contentions: - The erstwhile company amalgamated with the petitioner, and its transactions were merged and disclosed. - The assessment under Section 143(3) for the petitioner for AY 2017-18 was already finalized. - The revenue dropped similar proceedings for the erstwhile company for AY 2018-19 on identical facts, indicating inconsistency. Revenue's Contentions: - The revenue stated it had no objection if the file was remanded back to the Assessing Officer for fresh consideration.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 143(3)

AI-generated summary — verify with the full judgment below

WP(C) 13480/2022 Page 1 of 3 $~A-2 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 13480/2022 & CM APPLs.40983-40984/2022 PARAMOUNT POLYMERS PVT LTD ..... Petitioner Through: Mr.Gaurav Jain, Advocate with Ms.Akshita Goyal and Mr.Shubham Gupta, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 19(1), NEW DELHI AND ANR. ..... Respondents Through: Mr.Ruchir Bhatia, Sr.Standing Counsel with Ms.Mansie Jain, Advocate. % Date of Decision: 26th September, 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 order dated 31st July, 2022 passed under Section 148A(d) along with notice dated 31st July, 2022 issued under Section 148 of the Income Tax Act, 1961 (‘the Act’) for the assessment year 2017-18. 2. Learned counsel for the Petitioner states that the Respondent vide the said order sought to justify the reopening of the assessment for the This is a digitally signed Judgement. NEUTRAL CITATION NO: 2022/DHC/003913

WP(C) 13480/2022 Page 2 of 3 assessment year 2017-18 alleging escapement of income to the tune of Rs.33,67,382/- on account of the erstwhile Company being a non-filer, not considering the fact that the erstwhile Company got amalgamated with the Petitioner vide an order of NCLT dated 8th November, 2017 resulting in the merger of all the transactions entered into by the erstwhile company, including the impugned transactions with the results of the Petitioner Company for the relevant previous year, and was duly disclosed, and offered to tax, and also assessed by the respondent-revenue. 3. Learned counsel for the Petitioner states that the Respondent wrongfully passed the order under Section 148A(d) of the Act ignoring the contentions of the Petitioner that assessment under Section 143(3) of the Act had already been finalized in case of the Petitioner for the relevant assessment year. He further states that the respondents dropped the proceedings initiated under Section 148A of the Act in case of the erstwhile Company for the assessment year 2018-19 on the same set of facts, thereby contradicting its own stand. 4. Issue notice. 5. Mr.Ruchir Bhatia, learned counsel for the respondents-revenue, accepts notice. On instructions, he states that the respondents-revenue has no objection if the file is remanded back to the Assessing Officer for fresh consideration. 6. Keeping in view the aforesaid statement, the impugned order passed under Section 148A(d) and notice issued under Section 148 of the Act both dated 31st July, 2022 are set aside and the matter is remanded back to the Assessing Officer for a fresh decision in accordance with law within four weeks. This is a digitally signed Judgement. NEUTRAL CITATION NO: 2022/DHC/003913

WP(C) 13480/2022 Page 3 of 3 7. In the event, the petitioner is aggrieved by the said decision, the petitioner shall be at liberty to file appropriate proceedings in accordance with law. 8. Accordingly, the present writ petition along with applications stands disposed of. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J SEPTEMBER 26, 2022 TS This is a digitally signed Judgement. NEUTRAL CITATION NO: 2022/DHC/003913

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