QUEST GLOBAL ENGINEERING SERVICES PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX

PDF · subscribers
WP/102087/2022HC KarnatakaKAHC02007001202212 September 2024Bench: JYOTI MULIMANI5 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the entire proceedings, including the notice under Section 148A(b), the order passed under Section 148A(d), and the notice issued under Section 148 of the Income Tax Act, 1961, were irregular and liable to be set aside. The Court observed that the notice under Section 148A(b) was issued showing the defunct PAN number of the erstwhile company, Quality Engineering and Software Technologies Private Limited. Furthermore, the Section 148A(d) order was passed against this non-existent company, and the Section 148 notice was also issued to it using its defunct PAN. Since Quality Engineering and Software Technologies Private Limited was non-existent post-amalgamation, the proceedings were quashed. The Court ordered a Writ of Certiorari, quashing the order dated 05.04.2022 under Section 148A(d) and the notice dated 05.04.2022 under Section 148 for Assessment Year 2018-19.

What were the facts?

The petitioner, Quest Global Engineering Services Private Limited, is the merged entity of Quality Engineering and Software Technologies Private Limited and Quest Global Engineering Private Limited, with an appointed date of amalgamation as 01.04.2016, approved by the National Company Law Tribunal on 17.10.2017. The petitioner filed its return for Assessment Year 2018-19, including transactions of the amalgamating companies. The case was selected for scrutiny, and a draft order under Section 143(3) read with Section 144C(1) was passed. Subsequently, on 15.03.2022, the Assessing Officer issued a notice under Section 148A(b) for compliance by 25.03.2022. The petitioner responded, intimating the merger status. On 05.04.2022, the Assessing Officer passed an order under Section 148A(d) and issued a notice under Section 148. The petitioner filed a writ petition challenging these proceedings.

What were the issues?

1. Whether the proceedings initiated under Section 148A(b), the order passed under Section 148A(d), and the notice issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2018-19 are liable to be set aside, considering that they were issued against a non-existent entity (Quality Engineering and Software Technologies Private Limited) post-amalgamation. Assessee's Contention: The petitioner argued that the proceedings were irregular and liable to be set aside because the notices and orders were issued to Quality Engineering and Software Technologies Private Limited, which had ceased to exist due to the amalgamation. The petitioner relied on the fact that the amalgamation was approved by the NCLT and intimated to the Assessing Officer. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 144C(1),Section 148A(b),Section 148A(d),Section 148

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2024:KHC-D:13068 WP No. 102087 of 2022

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 12TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MS. JUSTICE JYOTI MULIMANI WRIT PETITION NO. 102087 OF 2022 (T-IT) BETWEEN:

QUEST GLOBAL ENGINEERING SERVICES PRIVATE LIMITED (FOR THE MERGED ENTITY M/S. QUEST ENGINEERING AND SOFTWARE TECHNOLOGIES PRIVATE LIMITED), NO.437/A, PLOT NO.2, AEQUS SPECIAL ECONOMIC ZONE, HATTARAGI VILLAGE, HUKKERI TALUKA, BELAGAVI, KARNATAKA-591 245, REPRESENTED BY ITS DIRECTOR, MR. RAMAN SUBRAMANIAN, AGE: 59 YEARS. …PETITIONER (BY SRI. K.R.PRADEEP AND SMT. GIRIJA.G.P., ADVOCATES)

AND:

1.

ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, BELAGAVI, FEROZ KHIMJIBHAI COMPLEX, OPP. CIVIL HOSPITAL, DR. AMBEDKAR ROAD, BELAGAVI-590 001.

2.

PRINCIPAL COMMISSIONER OF INCOME TAX, HUBBALLI, C.R. BUILDING, NAVANAGAR, HUBBALLI-580 025. …RESPONDENTS (BY SRI. M.THIRUMALESH., ADVOCATE)

Digitally signed by THEJASKUMAR N Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2024:KHC-D:13068 WP No. 102087 of 2022

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS.

THIS WRIT PETITION IS LISTED FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, AN ORDER IS MADE AS UNDER:

ORAL ORDER Sri.K.R.Pradeep., counsel for the petitioner and Sri.M.Thirumalesh., counsel for the respondents have appeared in person. 2. The short facts are these: On 17.10.2017, the National Company Law Tribunal, Bangalore Bench in C.P (CAA) No.42/BB/2017 approved the scheme of amalgamation between (1) Quality Engineering and Software Technologies Private Limited and (2) Quest Global Engineering Private Limited with (3) Quest Global Engineering Services Private Limited with appointed date of 01.04.2016. An intimation of the merger was given to the Assessing Officer. The petitioner filed a return of income for the Assessment Year 2018-19 including the transactions of the amalgamating companies. The case of the petitioner was selected for complete scrutiny and a notice under Section 143(2) of the

- 3 -

NC: 2024:KHC-D:13068 WP No. 102087 of 2022

Income Tax Act, 1961 was issued, since the case pertained to the amalgamation of companies, the case was transferred to the office of the first respondent. On 30.09.2021, the first respondent passed a draft order under Section 143(3) R/w Section 144C (1) of the Act in the case of the petitioner for the Assessment Year 2018-19. On 15.03.2022, a notice under clause (b) of Section 148A of the Act was issued by the first respondent seeking compliance on or before 25.03.2022. In response to the notice, the petitioner replied inter-alia intimating the merger status. The reply filed by the petitioner about financial statements for specific items as mentioned in the notice. On 05.04.2022, the first respondent passed an order under Section 148A(d) of the Act along with an issue of notice under Section 148 of the Act. Hence, the petitioner has filed the captioned Writ Petition under Articles 226 and 227 of the Constitution of India on several grounds as set out in the Memorandum of Writ Petition. 3. Heard the arguments and perused the Writ papers and the statement of objections with care.

- 4 -

NC: 2024:KHC-D:13068 WP No. 102087 of 2022

4.

A perusal of the entire writ papers reveals that a notice under Section 148A(b) of the Act was issued to Quest Global Engineering Services Private Limited showing the defunct PAN Number AAACQ0369B of erstwhile company i.e., Quality Engineering and Software Technologies Private Limited. However, 148A(d) order is passed against Quality Engineering and Software Technologies Private Limited and 148 Notice is issued to Quest Global Engineering Services Private Limited by showing the defunct PAN Number AAACQ0369B of Quality Engineering and Software Technologies Private Limited. It is pivotal to note that Quality Engineering and Software Technologies Private Limited was non-existent since the amalgamation had already taken place. Therefore, the entire proceedings i.e., issuance of notice under Section 148A(b), Order passed under Section 148A(d) and the notice issued under Section 148 of the Act are irregular and liable to be set aside and so, they are set aside. 5. The Writ of Certiorari is ordered. The Order dated 05.04.2022 passed by the first respondent under Section 148A(d) of the Income Tax Act, 1961 in DIN & NOTICE No.ITBA/AST/F/148A/2022-23/1042524088(1) for the

- 5 -

NC: 2024:KHC-D:13068 WP No. 102087 of 2022

Assessment Year 2018-19 vide Annexure-B and the notice dated 05.04.2022 issued by the first respondent under Section 148 of the Income Tax Act, 1961 in DIN & NOTICE No.ITBA/AST/S/148_1/2022-23/1042527588(1) for the Assessment Year 2018-19 vide Annexure-A is quashed. 6. Resultantly, the Writ Petition is allowed.

Sd/- (JYOTI MULIMANI) JUDGE TKN LIST NO.: 2 SL NO.: 30.1

More judgments on Section 144C(1)

All 423 judgments and leading authorities on Section 144C(1) →

Recent GST High Court judgments

Search GST case law →