Alok Knit Exports Ltd v. Deputy Commissioner Of Income Tax, Circle6(1

Digitallysigned byMEERAMEERAMAHESHMAHESHJADHAVJADHAVDate:2023.10.2617:28:13+0530 1/4 433-wp-7998-23.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAYCIVIL APPELLATE JURISDICTION WRIT PETITION NO. 7998 OF 2023 Skoda Auto Volkswagen India Pvt Ltd.Vs.Assistant Commissioner of Income TaxCircle-8, Pune & Ors. ..Petitioner ..Respondents ---- Mr. Madhur Agrawal i/b Mr. Atul Jasani for Petitioner.Mr. Suresh Kumar for Respondents. ---- CORAM : K. R. SHRIRAM & NEELA GOKHALE, JJ.DATED : 23[rd] OCTOBER 2023 P.C. : 1Petitioner is impugning an order passed under Section 148A(d) of theIncome Tax Act 1961, read with notice issued under Section 148 of the Act,both dated 27[th] April 2023, seeking to reopen the assessment for A.Y.2016-2017. 2The primary ground of challenge is that the order has been passedand notice has been issued to a non existing entity. It is petitioner’s casethat assessee was amalgamated with Volkswagen India Pvt Ltd., w.e.f. 1[st]April 2019. The scheme of amalgamation was sanctioned by NCLT on 5[th]September 2019. Petitioner’s case is that the scheme of amalgamation wasfiled with the Registrar of Companies as also with the Income Taxauthorities. Mr. Agrawal brought to our notice copies of letters addressed tothe Income Tax Authorities, copies whereof are annexed to the petition. 3This was brought to the notice of the assessing officer on receipt ofthe notice under Section 148A(b) of the Act. Despite bringing to notice ofthe assessing officer, the assessing officer has not even referred to thecommunication received from petitioner in this regard. In fact, in theimpugned order, the assessing officer has only referred to a request foradjournment made by petitioner but has not referred to a letter dated 21[st]April 2023, that petitioner sent, where petitioner, after dealing with the merits of the case, at paragraph 11 stated as under: 11. Further, the Assessee would like to mention that post the mergerof Skoda Auto India Pvt Ltd. with SKODA AUTO Volkswagen IndiaPrivate Limited w.e.f. April 1, 2019 vide order of National CompanyLaw Tribunal (‘NCLT’), Mumbai Bench dated September 5, 2019,Skoda Auto India ceases to exist.of Skoda Auto India Pvt Ltd. with SKODA AUTO Volkswagen IndiaPrivate Limited w.e.f. April 1, 2019 vide order of National CompanyLaw Tribunal (‘NCLT’), Mumbai Bench dated September 5, 2019,Skoda Auto India ceases to exist. 4There is an affidavit in reply filed through one Prashant B. Gandhale, Deputy Commissioner of Income Tax, affirmed on 3[rd] August 2023, inwhich, the stand taken is rather strange. According to the assessing officer,no response was received from assessee through e-filing portal asmandatory as per the faceless assessment scheme. 5Mr. Agrawal states that reply was being filed through Skoda AutoVolkswagen India Pvt Ltd., which is the new name of amalgamated entityVolkswagen India Pvt Ltd, and that entity cannot file a reply in the portal inthe name of non existing Skoda Auto Volkswagen India Pvt Ltd. Hence thereply was sent via email. 6Having considered the petition, the matter is squarely covered by the judgment of the Apex Court in Principal Commissioner of Income Tax Vs.1,Maruti Suzuki India Ltd., wherein the Apex Court reiterated the settledposition that the basis on which the jurisdiction is invoked, is under Section148 of the Act and when such jurisdiction was invoked on the basis ofsomething which was fundamentally at odds with the legal principle thatthe amalgamating entity ceased to exist upon the approved scheme ofamalgamation, the notice is bad in law. This was followed by this court in Alok Knit Exports Ltd. Vs. Deputy Commissioner of Income tax, Circle6(1) (1) Mumbai2 , wherein paragraph 6 reads as under: 6Having considered the petition, the matter is squarely covered by the judgment of the Apex Court in Principal Commissioner of Income Tax Vs.1,Maruti Suzuki India Ltd., wherein the Apex Court reiterated the settledposition that the basis on which the jurisdiction is invoked, is under Section148 of the Act and when such jurisdiction was invoked on the basis ofsomething which was fundamentally at odds with the legal principle thatthe amalgamating entity ceased to exist upon the approved scheme ofamalgamation, the notice is bad in law. This was followed by this court in Alok Knit Exports Ltd. Vs. Deputy Commissioner of Income tax, Circle6(1) (1) Mumbai2 , wherein paragraph 6 reads as under: “6 The Apex Court in its recent judgment on this subject in PrincipalCommissioner of Income Tax V/s. Maruti Suzuki India Ltd.considered the judgment of Sky Ligh Hospitality (supra) of the ApexCourt and said that the Apex Court has expressly mentioned that inthe peculiar facts of that case wrong name given in the notice wasmerely a clerical error. The Apex Court in Maruti Suzuki India Ltd.(supra) has also observed that what weighed in the dismissal of theSpecial Leave Petition were the peculiar facts of that case. The ApexCourt has reiterated the settled position that the basis on whichjurisdiction is invoked is under Section 148 of the Act and when suchjurisdiction was invoked on the basis of something which wasfundamentally at odds with the legal principle that the amalgamatingentity ceases to exist upon the approved scheme of amalgamation, thenotice is bad in law. The Apex Court has held as under : “In the present case, despite the fact that the assessingofficer was informed of the amalgamating company havingceased to exist as a result of the approved scheme ofamalgamation, the jurisdictional notice was issued only inits name. The basis on which jurisdiction was invoked wasfundamentally at odds with the legal principle that theamalgamating entity ceases to exist upon the approvedscheme of amalgamation. Participation in the proceedingsby the appellant in the circumstances cannot operate as anestoppel against law. This position now holds the field inview of the judgment of a co- ordinate Bench of twolearned judges which dismissed the appeal of the Revenuein Spice Enfotainment on 2 November 2017. The decisionin Spice Enfotainment has been followed in the case of the 1(2019) 416 ITR 613 (SC) 2(2021) 130 taxmann.com 457 (Bombay) respondent while dismissing the Special Leave Petition forAY 2011-2012. In doing so, this Court has relied on thedecision in Spice Enfotainment.” 7Petitioner had already brought it to the notice of the Income TaxAuthorities about the amalgamation. Mr. Agrawal submits that during thehearing of the scheme petition before the NCLT, the Central GovernmentAdvocate had appeared. Mr. Agrawal also states that this was brought to thenotice of respondent no.1 on receipt of the reopening notice under Section148A(d) of the Act. Therefore, the impugned order as well as the noticeissued under Section 148 of the Act have to be quashed and set aside. 8Though, Mr. Suresh Kumar made a valiant attempt to persuade thecourt to think otherwise, we are not so persuaded. Alok Knit Exports Ltd.(Supra) and Maruti Suzuki (Supra) hold the field. Therefore, we have nohesitation in quashing and setting aside the impugned order and the noticeboth dated 27[th] April 2023. 9Petition disposed. (NEELA GOKHALE, J.) (K. R. SHRIRAM, J.)