RAJASTHAN GLOBAL SECURITIES PVT LTD ( SUCCESSOR TO AUREOLE IMPEX PVT LTD) vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 19(1) DELHI

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W.P.(C)/15178/2022HC DelhiDLHC01040904202203 November 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 held that not only the initial notice but also the impugned order under Section 148A(d) and the subsequent notice under Section 148 were issued on the PAN of the transferor company, Aureole Impex Pvt Ltd. The Court found that the petitioner's primary argument that the transferee company's return included the transferor company's financial data and that a scrutiny assessment order under Section 143(3) had been passed, had not been examined on merit. Consequently, the impugned order under Section 148A(d) and the consequential notice under Section 148 were set aside. The notice under Section 148A(b) was deemed to have been issued to the transferee company. The petitioner was granted liberty to file its response to the Section 148A(b) notice within two weeks, and the Assessing Officer was directed to pass a fresh order under Section 148A(d) within eight weeks. The Court clarified that it had not commented on the merits of the controversy, leaving the rights and contentions of all parties open.

What were the facts?

The petitioner, Rajasthan Global Securities Pvt Ltd (successor to Aureole Impex Pvt Ltd), challenged notices and an order related to reassessment proceedings for Assessment Year 2013-14. The petitioner argued that Aureole Impex Pvt Ltd had merged with Rajasthan Global Securities Pvt Ltd in 2013, ceasing to exist as a separate entity. Consequently, notices issued under Section 148 and Section 148A(b) of the Income Tax Act, 1961, and the order under Section 148A(d) were invalid as they were issued in the name of a non-existent entity. The petitioner also stated that its own return for AY 2013-14 included Aureole Impex's financial data, and the PAN of Aureole Impex had been surrendered.

What were the issues?

1. Whether the notices issued under Section 148 and Section 148A(b) of the Income Tax Act, 1961, and the order passed under Section 148A(d) of the Act for Assessment Year 2013-14 are invalid, being issued in the name of a non-existent entity (Aureole Impex Pvt Ltd) due to a prior amalgamation. Assessee's Contention: The notices and order are a nullity because Aureole Impex Pvt Ltd had merged with Rajasthan Global Securities Pvt Ltd and ceased to exist. The petitioner's return for AY 2013-14, filed by the transferee company, included the transferor company's financial data, and the transferor's PAN was surrendered. Reliance was placed on the High Court's amalgamation order dated 21st March, 2013. Revenue's Contention: Sections 148A(b) and 148A(d) are procedural. No prejudice was caused as the final notice under Section 148 and the order under Section 148A(d) were issued to the correct legal entity (though the judgment later clarifies this was not the case).

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

NEUTRAL CITATION NUMBER: 2022/DHC/004675 W.P.(C) No.15178/2022 Page 1 of 3 $~47 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 15178/2022 RAJASTHAN GLOBAL SECURITIES PVT LTD ( SUCCESSOR TO AUREOLE IMPEX PVT LTD) ..... Petitioner Through: Mr.Kapil Goel, Advocate (through Video Conferencing) versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 19(1) DELHI ..... Respondent Through: Mr.Ruchir Bhatia, Advocate % Date of Decision: 03rd November, 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: C.M.No.46963/2022 Exemption allowed, subject to all just exceptions. Accordingly, the application stands disposed of. W.P.(C) No.15178/2022 & C.M.No.46962/2022 1. Present writ petition has been filed challenging the notice dated 17th April, 2021 issued under Section 148 of the Income Tax Act, 1961 (‘the Act’), notice dated 28th May, 2022 issued under Section 148A(b) of the Act as well as the order dated 27th July, 2022 passed under Section 148A(d) of the Act and the consequential notice dated 27th July, 2022 for the Assessment Year 2013-14. 2. Learned counsel for the Petitioner states that Aureole Impex Pvt. Ltd. (Transferor Company) was merged with M/s. Rajasthan Global Securities Digitally Signed By:JASWANT SINGH RAWAT Signing Date:04.11.2022 19:25:16 Signature Not Verified

NEUTRAL CITATION NUMBER: 2022/DHC/004675 W.P.(C) No.15178/2022 Page 2 of 3 Private Limited (Transferee Company) vide this Court’s order dated 21st March, 2013 w.e.f. 01st April, 2012. He states that after amalgamation order passed by the High Court, the company stood dissolved without winding up. He submits that in view of the aforesaid merger, there was no obligation and scope under law for any income tax returns to be filed by Aureole Impex Pvt. Ltd. He states that the Petitioner- Rajasthan Global Securities Private Limited had filed its income tax return for the Assessment Year 2013-14, inclusive of the financial data/numbers of Aureole Implex Pvt. Ltd. for the relevant period, dated 30th September 2013 and scrutiny assessment under Section 143(3) of the Act was also done. He states that the then Assessing Officer had been duly informed vide letter dated 10th June, 2013, served on 01st July, 2013, that Aureole Impex Pvt. Ltd. had been amalgamated with M/s. Rajasthan Global Securities Limited. He emphasises that along with the said letter, the PAN Card issued to Aureole Impex Pvt. Ltd. had been surrendered. He, therefore, submits that the original notice dated 17th April, 2021issued under Section 148 of the Act and the notice issued under Section 148A(b) of the Act is a nullity since it has been issued in the name of a non existing entity. 3. Issue notice. Mr.Ruchir Bhatia, learned senior standing counsel accepts notice on behalf of the Respondent-Revenue. He submits that Sections 148A(b) and 148A(d) of the Act are procedural provisions and no prejudice has been caused to the Petitioner by issuing the initial notice to the transferor company, as the final notice under Section 148 as well as the order under Section 148A(d) have been issued to the correct legal entity. 4. Having heard learned counsel for the parties, this Court is of the view that not only the notice was issued in the name of the transferor company Digitally Signed By:JASWANT SINGH RAWAT Signing Date:04.11.2022 19:25:16 Signature Not Verified

NEUTRAL CITATION NUMBER: 2022/DHC/004675 W.P.(C) No.15178/2022 Page 3 of 3 but the impugned order under Section 148A(d) of the Act as well as the notice under Section 148 of the Act have been issued on the PAN of the transferor company. This Court is also of the view that the primary argument advanced by the Petitioner that the transferee company had filed its return inclusive of the financial data/numbers of the transferor company has not been examined on merit inasmuch as the scrutiny assessment order dated 07th October, 2015 has not been dealt with. 5. For the aforesaid reasons, the impugned order passed under Section 148A(d) of the Act as well as the consequential notice dated 27th July, 2022 issued under Section 148 of the Act for the Assessment Year 2013-14 are set aside and the notice issued under Section 148A(b) of the Act is deemed to have been issued to the transferee company i.e. the Petitioner. In the interest of justice, the Petitioner is given liberty to file its reply/response to the notice issued under Section 148A(b) of the Act along with all the relevant documents within two weeks from today. The Assessing Officer is directed to pass a fresh order under Section 148A(d) of the Act within eight weeks thereafter in accordance with law. 6. With the aforesaid liberty and directions, present writ petition along with pending application stands disposed of. This Court clarifies that it has not commented on the merits of the controversy. The rights and contentions of all the parties are left open. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J NOVEMBER 3, 2022/KA Digitally Signed By:JASWANT SINGH RAWAT Signing Date:04.11.2022 19:25:16 Signature Not Verified

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