M/S BIT-BYTE INVESTMENT SERVICES PVT. LTD vs. DEPUTY COMMISSIONER OF INCOME TAX & ANR.

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W.P.(C)/14405/2022HC DelhiDLHC01038226202212 October 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court set aside the impugned order passed under Section 148A(d) and the notice issued under Section 148 of the Income Tax Act, 1961, both dated March 30, 2022, for Assessment Year 2018-19. The Court remanded the matter back to the Assessing Officer. The reasoning was based on the Revenue's concession that the impugned order and notice could be set aside and the matter remanded. The High Court directed the Assessing Officer to pass a fresh order in accordance with the law after considering the reply filed by the petitioner-assessee dated March 25, 2022, within eight weeks. The principle established is that reassessment proceedings initiated against a merged entity without proper consideration of the merger and the assessee's reply can be set aside and remanded for fresh adjudication. No specific issue was left undecided; the entire matter was remitted for fresh consideration.

What were the facts?

The petitioner, M/s Bit-Byte Investment Services Pvt. Ltd., filed a writ petition challenging a show cause notice dated March 12, 2022, issued under Section 148A(b) of the Income Tax Act, 1961, and an order passed under Section 148A(d) along with a notice under Section 148, both dated March 30, 2022, for Assessment Year 2018-19. The petitioner contended that these actions were void ab initio as they were issued in the name of 'M/s Leasemen Fin-invest India Ltd.', a non-existent entity that had merged with the petitioner effective April 1, 2015. The petitioner had previously undergone complete scrutiny for AY 2018-19, with an assessment order passed under Section 143(3) without additions. The show cause notice alleged non-accounting of payments on which tax was deducted. The petitioner replied, stating the non-existence of the entity and that income was accounted for in their books. The impugned order under Section 148A(d) erroneously stated no response was filed.

What were the issues?

1. Whether the show cause notice, order, and notice for reassessment proceedings under Sections 148A(b), 148A(d), and 148 of the Income Tax Act, 1961, are void ab initio as they were issued in the name of a non-existent entity that had merged with the petitioner. Assessee's Contention: The petitioner argued that the impugned notices and order are void ab initio because they were issued to 'M/s Leasemen Fin-invest India Ltd.', an entity that merged with the petitioner company (M/s Bit-Byte Investment Services Pvt. Ltd.) effective April 1, 2015, as per an NCLT order dated July 12, 2018. They relied on the Supreme Court decision in Pr. Commissioner of Income Tax v. Maruti Suzuki India Limited. The petitioner also highlighted that their PAN was merged with the transferee company's PAN on the Income Tax Portal and that the amalgamation/demerger issue was already examined in their original scrutiny assessment for AY 2018-19, which resulted in no additions. Revenue's Contention: The Revenue, through its learned senior standing counsel, stated that it had no objection if the impugned order passed under Section 148A(d) and the notice issued under Section 148 were set aside and the matter was remanded back for a fresh decision by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d),Section 148,Section 143(3),Section 143(3A),Section 143(3B)

AI-generated summary — verify with the full judgment below

$~31 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 14405/2022 M/S BIT-BYTE INVESTMENT SERVICES PVT. LTD ..... Petitioner Through: Mr.Gautam Jain with Mr.Ajit Kumar Jha and Mr.Piyush Kumar Kamal, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX & ANR. ..... Respondents Through: Mr.Ajit Sharma, Sr.Standing Counsel for the Revenue with Mr.A.Renganath, Advocate. CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA O R D E R % 12.10.2022 C.M.No.43987/2022 Exemption allowed, subject to all just exceptions. Accordingly, the application stands disposed of. W.P.(C) No.14405/2022 & C.M.No.43986/2022 Present writ petition has been filed challenging the show cause notice dated 12th March, 2022 issued under Section 148A(b) of the Income Tax Act, 1961 [‘the Act’] as well as the order passed under Section 148A(d) of the Act and the notice issued under Section 148 of the Act, both dated 30th March, 2022 for the Assessment Year 2018-19. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/06/2026 at 21:11:06

Learned counsel for the Petitioner submits that the impugned order and notices are void ab-initio as they have been issued in the name of “M/s Leasemen Fin-invest India Ltd.” a non-existent entity which was merged with the Petitioner with the effective date being 01st April, 2015 vide order dated 12th July, 2018 passed by the NCLT. In support of his submission, he relies upon the decision of the Supreme Court in Pr. Commissioner of Income Tax v. Maruti Suzuki India Limited, (2019) 416 ITR 613 (SC). He states that even on the Income Tax Portal, the PAN of the non- existent transferor company was merged with the PAN of the transferee company i.e. the Petitioner. He further states that the case of the Petitioner for the Assessment Year 2018-19 was selected for complete scrutiny and one of the issues that was examined was “amalgamation or demerger”. He states that after a detailed examination and after considering the replies of the Petitioner, an assessment order dated 22nd February, 2021 was passed under Section 143(3) read with Section 143(3A) and 143(3B) of the Act without making any additions. Learned counsel for the Petitioner states that the impugned notice dated 12th March, 2022 was issued to “M/s Leasemen Fin-invest India Ltd.” under Section 148A(b) of the Act seeking to initiate re-assessment proceedings on the ground that the assessee had received some payments on which tax had been deducted but the same had not been accounted for as no return of income had been filed by the assessee. He states that the Petitioner in its reply dated 25th March, 2022 to the show cause notice informed the Respondents that the re-assessment proceedings were sought to be initiated against a non-existent company as it had amalgamated with the Petitioner and the income of the assessee had already been accounted for in the books This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/06/2026 at 21:11:06

of accounts of the Petitioner. He further states that the impugned order under Section 148A(d) of the Act was passed by the Respondents stating that no response has been filed by the assessee. Issue notice. Mr.Ajit Sharma, learned senior standing counsel accepts notice on behalf of the Respondents-Revenue. He states that he has no objection if the impugned order passed under Section 148A(d) of the Act and the notice issued under Section 148 of the Act are set aside and the matter is remanded back for a fresh decision by the Assessing Officer. Keeping in view the aforesaid, the impugned order passed under Section 148A(d) of the Act and the notice issued under Section 148 of the Act, both dated 30th March, 2022, for the Assessment Year 2018-19 are set aside and the matter is remanded back to the Assessing Officer with a direction to pass a fresh order in accordance with law after considering the reply filed by the Petitioner-assessee dated 25th March, 2022 within eight weeks. With the aforesaid directions, present writ petition along with pending application stands disposed of. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J OCTOBER 12, 2022 KA This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/06/2026 at 21:11:06

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