M/S Neo Structo Construction Pvt Ltd v. C/Sca/5803/2022 Judgment Dated: 21/06/2022

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 5803 of 2022With R/SPECIAL CIVIL APPLICATION NO. 5804 of 2022With R/SPECIAL CIVIL APPLICATION NO. 5805 of 2022 FOR APPROVAL AND SIGNATURE: HONOURABLE MR. JUSTICE A.J.DESAI andHONOURABLE MR. JUSTICE BHARGAV D. KARIA ========================================================== ========================================================== M/S NEO STRUCTO CONSTRUCTION PVT LTD Versus ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3(1)(1) ==========================================================Appearance:MR DHINAL A SHAH(12077) for the Petitioner(s) No. 1MR MANISH BHATT FOR M R BHATT & CO.(5953) for the Respondent(s) No. 1========================================================== CORAM:HONOURABLE MR. JUSTICE A.J.DESAIandHONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 21/06/2022COMMON ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE A.J.DESAI) 1. Heard learned advocate Mr. Dhinal A.Shah for the petitioner and learned Senior Advocate Mr. Manish Bhatt for M.R.Bhatt & Co.for the respondent. 2. RULE. Learned Senior Advocate Mr. Manish Bhatt waives serviceof notice of rule on behalf of the respondent.of notice of rule on behalf of the respondent. 3. The issue involved in these petitions is identical and therefore, thepetitions have been heard together and disposed of by this commonjudgement. For the sake of convenience, facts are recorded fromSpecial Civi Application No. 5803 fo 2022.petitions have been heard together and disposed of by this commonjudgement. For the sake of convenience, facts are recorded fromSpecial Civi Application No. 5803 fo 2022. 4. By way of present petition under Article 226 of the Constitution ofIndia, the petitioner has challenged notice dated 30.03.2021 issuedunder section 148 of the Income Tax Act, 1961 for the assessmentyear 2015-16.India, the petitioner has challenged notice dated 30.03.2021 issuedunder section 148 of the Income Tax Act, 1961 for the assessmentyear 2015-16. 5. Brief facts of the case are as under: 5.1The petitioner was formerly known as Bilfinger Neo StructoPvt. Ltd. One Bilfinger Plant Equipment Pvt. Ltd merged withBilfinger Neo Structo Pvt. Ltd w.e.f. 01.04.2021. The scheme ofmerger of the companies were duly approved by the Bombay HighCourt vide order dated 01.04.2014. Consequently, name ofBilfinger Neo Structo Pvt. Ltd was changed to Neo StructoConstruction Private Limited which was approved by the Registrarof Companies, Mumbai and accordingly, certificate was issued on23.01.2018. 5.2The information about the merger of the company wasintimated in the original return of income filed in case of BilfingerNeo Structo Pvt. Ltd for the assement year 2015-16. 5.3The respondent thereafter issued impugned notice dated30.06.2021 under section 148 of the Act,1961 proposing toreassess the income of the petitioner in the name of Billfinger PlantEquipments Pvt. Ltd for the assessment year 2015-16 to which thepetitioner raised oabjection. 5.4The respondent issued a notice under section 142(1) dated10.11.2021 asking for various details and information for theAssessment Year 2015-16. The respondent issued a notice under section 142(1) dated 5.5The petitioner again filed objection on 13.11.2021 andraised specific objection about issuance of the impugned notice to anon-existent entity since the company was merged way back in theyear 2004. 5.6Thereafter, without considering said objection, a notice cameto be issued under section 142(1) of the Act, 1961 by therespondent-authority on 12.03.2022 calling for the certaininformation. 5.7Thereafter, the respondent-authority has issued notice undersection 148 dated 30.06.2021 to Neo structo Construction PrivateLimited for the Assessment Year 2015-16. 5.4The respondent issued a notice under section 142(1) dated10.11.2021 asking for various details and information for theAssessment Year 2015-16. The respondent issued a notice under section 142(1) dated 5.5The petitioner again filed objection on 13.11.2021 andraised specific objection about issuance of the impugned notice to anon-existent entity since the company was merged way back in theyear 2004. 5.6Thereafter, without considering said objection, a notice cameto be issued under section 142(1) of the Act, 1961 by therespondent-authority on 12.03.2022 calling for the certaininformation. 5.7Thereafter, the respondent-authority has issued notice undersection 148 dated 30.06.2021 to Neo structo Construction PrivateLimited for the Assessment Year 2015-16. 5.8It is the case of the petitioner that impugned notice is issuedproposing to reassess the total income of the non-existing companyi.e. Bilfinger Plant Equipments Pvt. Ltd, which had been mergedwith Bilfinger Neo Structo Pvt. Ltd. With appointed dated01/04/2014, pursuant to the scheme of merger approved byBombay High Court vide order dated 27.04.2015. 6. Learned advocate Mr.Dhinal Shah has submitted that in view of thefact that notice has been issued under section 148 of the Act,1961to the present petitioner, the present notice under section 148issued to the non-existent entity cannot survive. Hence, the samemay be quashed and set aside.fact that notice has been issued under section 148 of the Act,1961to the present petitioner, the present notice under section 148issued to the non-existent entity cannot survive. Hence, the samemay be quashed and set aside. 7. Learned advocate Mr. Shah relied upon the judgement of Hon’bleSupreme Court in case of Principal Commissioner of Income Taxvs. Maruti Suzuki India Ltd (107 Taxmann. Com. 375) in whichthe Supreme Court has held as under:Supreme Court in case of Principal Commissioner of Income Taxvs. Maruti Suzuki India Ltd (107 Taxmann. Com. 375) in whichthe Supreme Court has held as under: “33.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 in itsname. The basis on which jurisdiction was invoked wasfundamentally at odds with the legal principle that theamalgamating entity ceases to exist upon the approved schemeof amalgamation. Participation in the proceedings by theappellant in the circumstances cannot operate as an estoppelagainst law. This position now holds the field in view of thejudgment of a co-ordinate Bench of two learned judges whichdismissed the appeal of the Revenue in Spice Enfotainment on2 November 2017. The decision in Spice Enfotainment hasbeen followed in the case of the respondent while dismissingthe Special Leave Petition for AY 2011-2012. In doing so, thisCourt has relied on the decision in Spice Enfotainment.” 8. He further placed reliance on the decision of this Court in case ofGayatri Microns Ltd vs. Assistant Commissioner of IncomeTax reported in [2020] 114 Taxmann.com 318 in which this Courthas held as under:Gayatri Microns Ltd vs. Assistant Commissioner of IncomeTax reported in [2020] 114 Taxmann.com 318 in which this Courthas held as under: 8. He further placed reliance on the decision of this Court in case ofGayatri Microns Ltd vs. Assistant Commissioner of IncomeTax reported in [2020] 114 Taxmann.com 318 in which this Courthas held as under:Gayatri Microns Ltd vs. Assistant Commissioner of IncomeTax reported in [2020] 114 Taxmann.com 318 in which this Courthas held as under: “9. The controversy in the present petition, is no longer resintegra. The Apex Court in the case of Principal Commissionerof Income Tax vs. Maruti Suzuki India Limited (supra), inparagraph 33, has categorically held that if the company hasceased to exist as a result of the approved scheme ofamalgamation then in that case, the jurisdictional notice issuedin its name would be fundamentally illegal and withoutjurisdiction. It is also held that upon the amalgamating entityceasing to exist, it cannot be regarded as a person under sub-section (31) of section 2 of the Act; against whom assessmentproceedings can be initiated. The Apex Court has further heldthat participation by the amalgamated company in theproceedings would be of no effect as there is no estoppelagainst law. 10. Similarly, this court, in the judgment in the case ofDharamnath Shares and Services (P) Ltd. (supra) whilereferring to its earlier decision in the case of KhuranaEngineering Limited (supra) held that once the assesseecompany gets amalgamated with the transferee company, itsindependent existence does not survive and therefore it wouldno longer be amenable to the assessment proceedings. Thus, itis well settled proposition of law that upon its amalgamationthe transferor company ceases to exist and becomes extinct, andit would no longer be amenable to the assessment proceedingsconsidering the fact that the extinct entity would not be coveredwithin the ambit of the provisions of the Act. 11. Accordingly, in view of the aforesaid concluded propositionof law; which applies on all fours to the facts of the presentcase, the notice dated 25th March, 2019 issued by therespondent under the provisions of section 148of the Act for the assessment year 2012-13, being without jurisdiction, is notsustainable.” 9. On the other hand, learned advocate Mr.Manish Bhatt has opposedthis petition.this petition. 10.We have heard learned advocates appearing for the respectiveparties. It is an undisputed fact that the Billfinger Neo Structo PvtLtd. was merged with Neo Structo Construction Pvt. Ltd by theorder of the High Court of Bombay in Company Petition No. 21 of2015 connected with Company Summons for Direction No. 875 of2014. The petitioner has specifically raised his objection in thereply however, notice has been issued to the company viz.Billfinger Bilfinger Plant Equipment Pvt. Ltd which is alreadymerged with the present petitioner.parties. It is an undisputed fact that the Billfinger Neo Structo PvtLtd. was merged with Neo Structo Construction Pvt. Ltd by theorder of the High Court of Bombay in Company Petition No. 21 of2015 connected with Company Summons for Direction No. 875 of2014. The petitioner has specifically raised his objection in thereply however, notice has been issued to the company viz.Billfinger Bilfinger Plant Equipment Pvt. Ltd which is alreadymerged with the present petitioner. 11.We are in agreement with the submissions made by learnedadvocate for the petitioner. The ratio laid down by the Hon’bleApex Court in case of Principal Commissioner of Income Tax vs.Maruti Suzuki India Ltd(supra) and in case ofGayatri MicronsLtd vs. Assistant Commissioner of Income Tax (supra) is applicablein the facts and circumstances of the present case in view of thefact that now the notice has already been issued to the presentpetitioner-company under section 148 of the Income Tax Act forthe assessment years involved in the present group of petitions. advocate for the petitioner. The ratio laid down by the Hon’bleApex Court in case of Principal Commissioner of Income Tax vs.Maruti Suzuki India Ltd(supra) and in case ofGayatri MicronsLtd vs. Assistant Commissioner of Income Tax (supra) is applicablein the facts and circumstances of the present case in view of thefact that now the notice has already been issued to the presentpetitioner-company under section 148 of the Income Tax Act forthe assessment years involved in the present group of petitions. 12.Accordingly, we hereby allow the petitions and quash and set asideNotice dated 30.03.2021 in Special Civil Application No. 5803 of2022, Notice dated 25.03.2021 in Special Civil ApplicationNotice dated 30.03.2021 in Special Civil Application No. 5803 of2022, Notice dated 25.03.2021 in Special Civil Application No. 5805 of 2022 and Notice dated 25.03.2021 in Special CivilApplication No. 5804 of 2022. Rule is made absolute to theaforesaid extent in each petition. (A.J.DESAI, J) JYOTI V. JANI (BHARGAV D. KARIA, J)