JINDAL EXPORTS AND IMPORTS PVT. LTD. (SUCCESSOR TO QUICK EXPORTS PRIVATE LIMITED) vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 19-1 & ORS.

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W.P.(C)/6563/2022HC DelhiDLHC01711179202226 April 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MR. JUSTICE DINESH KUMAR SHARMA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the impugned assessment order was liable to be set aside on the short ground of being violative of the principle of natural justice. Even if the revenue's submission that the order was passed in the name of the amalgamated entity was accepted, the petitioner had no opportunity to deal with or respond to the show cause notice dated March 28, 2022, as it had been issued after the date and time of compliance had expired. Consequently, the assessment order was set aside. The matter was remanded back to the Assessing Officer for fresh adjudication. The petitioner was directed to file its response to the show cause notice within two weeks, and the Assessing Officer was directed to fix a hearing date after four weeks and decide the matter in accordance with law after providing an opportunity of hearing. The rights and contentions of all parties were left open. The Court did not decide the issue of whether the notice and order were void ab initio due to being issued in the name of a non-existent entity.

What were the facts?

The petitioner, Jindal Exports and Imports Pvt. Ltd. (successor to Quick Exports Private Limited), filed a writ petition challenging a reassessment notice dated March 26, 2021, and an assessment order and demand notice dated March 31, 2022, for Assessment Year 2014-15. The petitioner argued that the notice and order were void ab initio because they were issued in the name of 'Quick Exports Pvt. Ltd.', a non-existent entity after its merger with the petitioner company effective April 1, 2013. The petitioner also contended that the income had been offered to tax in the hands of the amalgamated entity, and an earlier assessment order existed. Furthermore, the petitioner claimed a violation of natural justice as the show cause notice dated March 28, 2022, required compliance before its issuance date and time.

What were the issues?

1. Whether the reassessment notice and assessment order are void ab initio as they were issued in the name of a non-existent entity (Quick Exports Pvt. Ltd.) which had merged with the petitioner company, thereby constituting a substantive illegality under Section 148 and Section 147 read with Section 143(3) of the Income Tax Act, 1961, as per the ruling in Pr. Commissioner of Income Tax v. Maruti Suzuki India Limited. 2. Whether the assessment order is liable to be set aside for violation of the principle of natural justice, specifically concerning the show cause notice dated March 28, 2022, which stipulated a compliance date and time prior to its issuance. Assessee's Contentions: - The impugned notice and order are void ab initio as they were issued in the name of a non-existent entity, relying on the Supreme Court's decision in Pr. Commissioner of Income Tax v. Maruti Suzuki India Limited. - The income in question was already offered to tax in the hands of the amalgamated entity, and a prior assessment order exists. - The assessment order was passed in violation of natural justice due to the show cause notice having a compliance deadline before its issuance. Revenue's Contentions: - The impugned assessment order was passed in the name of the amalgamated entity. - The issue of whether income escaped assessment is a question of fact to be agitated in appeal proceedings.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

$~101 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 6563/2022 & CM APPLs.19942/2022, 20114/2022 JINDAL EXPORTS AND IMPORTS PVT. LTD. (SUCCESSOR TO QUICK EXPORTS PRIVATE LIMITED) ..... Petitioner Through: Mr. Ved Jain, Advocate with Ms. Richa Mishra and Mr. Nishchay Kantoor, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 19-1 & ORS. ..... Respondents Through: Mr. Sunil Agarwal, Advocate with Mr. Tushar Gupta, Mr. Samarth Chaudhari, Advocates. CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE DINESH KUMAR SHARMA O R D E R % 26.04.2022 Present writ petition has been filed challenging the reassessment notice dated 26th March, 2021 issued under Section 148 of the Income Tax Act, 1961 [‘the Act’] for the Assessment Year 2014-15 as well as assessment order and demand notice dated 31st March, 2022 issued under Section 147 read with Section 143(3) of the Act. Learned counsel for the petitioner states that the impugned notice as well as the impugned order are void ab initio as they have been issued in the name of “Quick Exports Pvt. Ltd.” a non-existent entity which had merged with the Petitioner company with effect from 1st April, 2013 vide order 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 18/06/2026 at 06:43:49

dated 6th August, 2014 passed by this Court under Section 394 of the Companies Act, 1956. He relies on the decision of the Supreme Court in Pr. Commissioner of Income Tax v. Maruti Suzuki India Limited, (2019) 416 ITR 613 (SC), wherein it has been held that the issuance of a notice to the non-existing company is a substantive illegality and not a procedural violation. Learned counsel for the petitioner states that the income alleged, to have escaped assessment, had been offered to tax in the hands of the amalgamated entity and an assessment order dated 29th December, 2016 had been passed accepting the same. He also states that the impugned assessment order has been passed in violation of the principle of natural justice as the Petitioner was not given an opportunity of being heard. He points out that show cause notice dated 28th March, 2022 though signed on 14:52 hours on 29th March, 2022 required the Petitioner to comply with the same by 12:00 PM on 29th March, 2022 i.e. the compliance date was set prior to the issuance of the notice. Issue notice. Mr. Sunil Agarwal, Advocate accepts notice on behalf of the respondents. He states that in the present case, the impugned assessment order has been passed in the name of the amalgamated entity. He also states that the issue as to whether income has escaped assessment or not is a question of fact which the petitioner can agitate in appeal proceedings. Having heard learned counsel for the parties, this Court is of the view that even if the submission of learned counsel for the respondents is accepted then also the impugned assessment order is liable to be set aside as the petitioner had no opportunity to deal with or respond to the show cause 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 18/06/2026 at 06:43:49

notice dated 28th March, 2022, as it had been issued after the date and time of compliance had expired. Consequently, the impugned assessment order is set aside on the short ground of being violative of principle of natural justice and the matter is remanded back to the Assessing Officer for fresh adjudication. The petitioner shall file its response to the show cause notice dated 28th March, 2022 within two weeks. The Assessing Officer is directed to fix the date of hearing after four weeks and decide the same in accordance with law after giving an opportunity of hearing to the petitioner. The rights and contentions of all the parties are left open. In view of the above, the present writ petition and applications stand disposed of. MANMOHAN, J DINESH KUMAR SHARMA, J APRIL 26, 2022 AS 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 18/06/2026 at 06:43:49

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