Loading judgment…
Facts
The revenue filed two appeals against orders of the CIT(A) for AY 2015-16 and 2016-17. The appeals were filed belatedly. The assessee, Energy Commodities Pvt. Ltd. (now merged with Ishana Projects Pvt. Ltd.), was involved in the sale of bogus investments. Reopening was initiated under Section 147/148 of the Act.
Held
The Tribunal held that the notice under Section 148 was issued to a company that had already merged and ceased to exist. Therefore, the assessment order was bad in law. The Tribunal upheld the order of the CIT(A) which had quashed the assessment order on this technical ground, relying on the Supreme Court decision in Maruti Suzuki India Ltd.
Key Issues
Whether a notice under Section 148 can be issued to a company that has already merged with another entity and ceased to exist.
Sections Cited
147, 148, 132, 133A, 127, 149, 151, 143(3), 68, 115JB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
O R D E R Per Bench : These two appeals are filed by the revenue against the separate orders of the ld. CIT(Appeals), Kolkata-27, both dated 15.04.2025 for the assessment years 2015-2016 & 2016-2017.
Both appeals of the revenue are filed belatedly by 05 days each. In this regard, the revenue has filed affidavit in both the appeals stating therein sufficient reasons for condonation of delay. Considering facts and circumstances of the case and the reasons stated in the affidavit, we condone the delay of 05 days each in both the appeals of the revenue and both the appeals are admitted for hearing.
It was submitted by the Ld. Sr.DR that the assessee being Energy Commodity Private Limited was involved in sale of bogus investments. It was submission that consequently reopening had been done by issuance of notice 148 of the Act on 10/01/2024 and the reasons were recorded and x x x x x x It was the submission that the assessment came to be completed u/s.143(3) of the Act r.w.s.147 of the Act on 29/03/2024 where the bogus investment sold was treated as unexplained income of the assessee and brought to tax. It was the submission that on appeal, Ld.CIT(A) on the technical ground that the assessee had merged with M/s. Ishana Projects Private Limited, deleted the additions and quashed the assessment order. It was submission that the Ld.CIT(A) ought to have decided the issues on merits and he should not have quashed the assessment order. He vehemently supported the order of the AO.
In reply, the Ld.AR submitted that the assessee Energy Commodities Private Limited amalgamated with M/s Ishana Projects Private Limited by an order dated 19/07/2022. It was the submission that this was intimated to the AO as also the PCIT vide communication dated 27/09/2022. It was the submission that the reasons recoded for reopening in para 2 also specifically brings out the fact that the assessee Energy Commodities Pvt. Ltd has merged with M/s Ishana Projects Pvt. Ltd vide NCLT order dated 19/07/2022. It was submission that once the merger takes place, obviously the company Energy Commodities Pvt. Ltd would no more exist. It was the submission that the order of the Ld. CIT(A) quashing the assessment order in the case of Energy Commodities Pvt. Ltd. by relying upon the decision of the Hon’ble Supreme Court in the case of Maruti Suzuki Ltd, reported in 107 taxmann.com 375 was right. It was submission that the order of the Ld. CIT(A) is liable to be upheld.
We have considered the rival submission. A perusal of the facts in the present case clearly shows that the reasons recorded has been issued in the case Energy Commodities Pvt. Ltd. The PAN Number referred to in the notice issued u/s.148 of the Act is also that of Energy Commodities Pvt. Ltd. The fact remains that the when the said reasons were recorded and when the notice was issued, M/s Energy Commodities Pvt. Ltd. did not exist, insofar as, it had already merged with M/s Ishana Projects Pvt. Ltd. Once it is recognized by the AO that M/s Energy Commodities Pvt Ltd. has already been merged/amalgamated with M/s Ishana Projects Pvt. Ltd and this has also categorically mentioned in the reasons recorded. It was no more available with the AO to issue a notice in the case of an amalgamated company as the said company was no more exist. This being so, we find no error in the order of the Ld.CIT(A) in quashing the assessment orders passed in the case of Energy Commodity Pvt. Ltd by relying upon the decision of the Hon’ble Supreme Court in the case of Maruti Suzuki India Ltd, referred to supra. In these circumstances the order of the CIT(A) in both the appeals for both the assessment years under consideration stand upheld and both appeals filed by the revenue stand dismissed.