Deihi v. Wp

Digitally signedby VIDYA G RLocation: HighCourt ofKarnataka -1-WP No. 9594 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED [THIS THE DAY OF JUNE, 2023 BEFORE. THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV|&WRIT PETITION NO. 9594 OF 2023 (TIT) BETWEEN: 1.COFFEE DAY RESORTS (MSM) PVT. LTD.,.(FOR THE MERGED ENTITY SHANKAR-RESOURCES PVT. LTD.)A COMPANY INCORPORATED UNDER THECOMPANIES ACT, 1956HAVING ITS REGISTERED OFFICE ATNO.23/2, COFFEE DAY SQUARE,VITTAL MALLYA ROAD, BENGALURU - 560 OOL1REPRESENTED BY ITS DIRECTOR|MR. NANJUNDA SHETTY JS _ PETITIONER| (BY SRI. T. SURYANARAYANA, SENIOR ADVOCATE FORSRI TANMAYEE RAJKUMAR., ADVOCATE) AND: 1.THE DEPUTY COMMISSIONER OF INCOME-TAX,CIRCLE 2(1)(1)_BMTC BUILDING,8O FEET ROAD, KORAMANGALA,|BENGALURU - 560 095 2.THE PRINCIPAL COMMISSIONER OF |INCOME TAX-1,5 FLOOR, BMTC BUILDING , | 6 BLOCK, 80 FEET ROAD,KORAMANGALA, BENGALURU - 560 095 (BY SRI. K.V. ARAVIND, ADVOCATE A/WSRI M. DILIP, ADVOCATE) .. RESPONDENTS THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF!THE CONSTITUTION OF INDIA, PRAYING TO-QUASH_ THEORDER DTD 28/03/2023 BEARING NO. ITBA.AST.F.148A/2022-23/1051516338(1) (ANNEXURE-K) PASSED BY THE R-1 UNDER.SEC 148A(D) OF THE ACT, REJECTING THE PETITIONERS|OBJECTION AS TO THE INITIATION OF THE REASSESSMENT|PROCEEDINGS FOR THE AY 2019-20 AND ETC. THIS WRIT PETITION COMING ON FOR PRELIMINARY,HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has filed the present writ petitionseeking quashing of the order dated 28.03.2023 atAnnexure-K passed by the first respondent under Section148A (d) of the Income Tax Act, 1961 (‘the Act” for short)rejecting petitioners objection as against initiation ofre-assessment of proceedings for the Assessment year|2OL9-20. FF F2. The petitioner has also sought for setting aside of |the notice dated 28.03.7023 at Annexure-L issued|pursuant to the order at Annexure-K. _ 3. The petitioner Coffee Day Resorts (MSM) Pvt.Ltd., has questioned the validity of the re-assessment,proceedings as noticed above. It is to be noticed that)Shankar Resources Pvt. Ltd., was Non-Banking FinancialCompany (NBFC) and merged subsequently into the)petitioner company by an order of amalgamation of)National Company Law Tribunal (NCLT) dated 18.06.2019|with the appointed dated being 01.04.2018. 4. It is submitted that respondent authorities issueda notice under Section 148A (b) of the Act on 28.01.2023.calling upon Shankar Resources Private Limited toshow-cause as to why in view of the details contained inenclosures mentioned in point no.1 above, a notice underSection 148 of the Income Tax Act, 1961 should not be'issued. | 5. The petitioner made out reply on 04.02.2023specifically stating that the company to which notice underSection 148A (b) came to be issued to M/s.ShankarResources (P) Ltd., with PAN Number Nas| amalgamated with M/s.Coffee Day Resorts (MSM) Pvt.Ltd., with PAN Number with effect from)01.04.2018. Accordingly, it was contended that theCompany M/s.Shankar Resources (P) Ltd., ceased to exist.from 01.04.2018 and there was no assessable entity by.name M/s.Shankar Resources (P) Ltd., for the Assessment|Year 2019-270. 6. Various other contentions have been taken, onsubstantive grounds as regards the correctness ofissuance of notice under Section 148A (b) which howeverneed not be adverted to in light of the first contention|relating to non-existence of M/s.Shankar Resources (P)|Ltd., aS noticed above. Only on the short ground that the)reply not having been taken note of, order being passed|under Section 148A (d) of the Act, copy of which isproduced at Annexure-K, the order requires to be.interfered in light of said legal position. 7. It is noticed that In the order under Section148A (d) the authority has taken note of merging of| -5- M/s.Shankar Resources (P) Ltd., with Coffee Day Resorts|(MSM) Pvt. Ltd., Dut has adverted on merits and concludedthat case was made out for issuance of notice under|Section 148 of the Act. 7. It is noticed that In the order under Section148A (d) the authority has taken note of merging of| -5- M/s.Shankar Resources (P) Ltd., with Coffee Day Resorts|(MSM) Pvt. Ltd., Dut has adverted on merits and concludedthat case was made out for issuance of notice under|Section 148 of the Act. 8. It is a matter of record that as on the date noticeunder Section 148A (bD) was issued on 28.03.2023, theentity to which notice was issued was not in existencehaving merged along with the petitioner company. Even.otherwise, it must be noted that consequent to merger,|the|transactionsrelating CO erstwhileCompany|M/s.Shankar Resources (P) Ltd., find mention in the books|of the petitioner. 9. In light of the judgment of the Apex Court in thecase oT Principal Commissioner of Income Tax, New Deihi v. Maruti Suzuki Inadia Ltd.reported in.(2019)107 taxmann.com 375 (SC),it is clear that notice and.assessment order passed in the name of non-existing:company is a substantive illegality and is an order passedwithout jurisdiction. Accordingly, only on the above ground -6§- of M/s.Shankar Resources (P) Ltd., having merged with.the petitioner company and was not an existing entity ason the date of issuance of notice, the notice under Section148A (b) dated 28.01.2023 vide Annexure-D, similar|j1dentical notice dated 23.02.7023 at Annexure-F andnotice dated 13.03.2023 at Annexure-H are set aside. So'also, order under Section 148A (d) dated 28.03.2023 vide|Annexure-K|and|noticeunder|Section148dated.28.03.7023 vide Annexure-L are set aside. © Q. Needless to state that the authorities are atliberty to initiate appropriate proceedings as is open in law.and permissible insofar as contents of the notice at Section 148A (Db) as against the petitioner company in accordancewitn law. Sd/-| JUDGE. NP|