M/S. DOLF LEASING LTD.,NEW DELHI vs. ITO, NEW DELHI

The assessee has raised as many as nine grounds of appeal. However, the assessee has mainly agitated the issuance of notice u/s 148 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] which is on the non existing company i.e. the assessee company, which has already wound up.

Facts, in brief, are that M/s S. N. Dotcom Private Limited was amalgamated with M/s Suave Technologies (P) Limited vide order of Hon’ble Delhi High Court dated 17th August, 2012 w.e.f. 01.04.2011. M/s Suave Technologies (P) Limited was later amalgamated with M/s Dolf Leasing Limited, i.e. the assessee, as per the order of Hon'ble Delhi High Court dated 15 July, 2014 w.e.f. 01.04.2014. Therefore, the appeal has been filed by M/s Dolt Leasing Limited, the appellant, who has challenged the validity of notice u/s 148 as it was issued in the name of M/s S. N. Dotcom Private Limited on 30th March, 2014 when the said company was not in existence. The appellant has challenged the addition on merits as well.

As far as merits of the addition are concerned, the ld. CIT(A) observed that the evidence of accommodation entries was found/seized during the search and the appellant did not comply with the statutory notices issued nor did it furnish any information or evidence to controvert, the finding of AO at the appellate stage. The ld. CIT(A) further observed that the appellant cannot take advantage of its own statutory lapse, besides the finding that the notice u/s 148 is deemed to have been issued in the name of M/s Suave Technologies (P) Limited in view of Section. 292B (for the reason that the amalgamated company steps into the shoes of amalgamating company and no evidence of application for cancellation of PAN and intimation of amalgamation to AO has been furnished) the technical grounds of appeal are also liable to be dismissed. Accordingly the ld. CIT(A) dismissed the appeal of the assessee.

I have heard both the sides and perused the relevant material on record. The issue before us is as to whether the notice issued in the name of M/s S. N. Dotcom Private Limited on 30.03.2014 if a valid notice issued in the name of M/s Dolf Leasing Company Limited or not. The answer is quite evident, which is negative and no notice had been issued on M/s Dolf Leasing Company Limited but the same had been issued in the name of M/s S. N. Dotcom Private Limited, which, in fact, had merged on 17.08.2012 with M/s Sauve Technologies [P] Ltd. Therefore, in such circumstances, and facts of the case, notice to a non existing person is no notice and the Assessing Officer does not acquire jurisdiction to assess or reassess u/s 147/148 of the Act. In that view of the matter, the notice so issued is bad in law and the assessment so made is directed to be quashed.

In the result, the appeal of the assessee is allowed. The order is pronounced in the open court on 11.10.2017.