Private Limited v. Deputy Commissioner Of Income Tax, Circle 13-1 &Ors

$~116 & 119 IN THE HIGH COURT OF DELHI AT NEW DELHI +W.P.(C) 6900/2022 & C.M.Nos.21028-21029/2022 JINDAL EXPORTS AND IMPORTS PRIVATE LIMITED SUCCESSOR TO JINDAL MENTHOL AND INVESTMENT PRIVATE LIMITED..... Petitioner Through:Mr.Ved Kumar Jain with Mr.NischayKantoor, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 13-1 &ORS...... Respondents Through:Mr.Sunil Agarwal, senior standingcounsel for the Revenue. +W.P.(C) 6916/2022 & C.M.Nos.21089-21090/2022 JINDAL EXPORT AND IMPORT PRIVATE LIMITED(SUCCESSOR TO JINDAL MENTHOL AND INVESTMENT(SUCCESSOR TO JINDAL MENTHOL AND INVESTMENT PRIVATE LIMITED)..... Petitioner Through:Mr.Ved Kumar Jain with Mr.NischayKantoor, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13-1 & ORS. ..... Respondents Through:Mr.Sunil Agarwal, senior standingcounsel for the Revenue. W.P.(C) Nos.6900/2022 & 6916/2022 Date of Decision: 02[nd]May, 2022 % CORAM:HON'BLE MR. JUSTICE MANMOHANHON'BLE MR. JUSTICE DINESH KUMAR SHARMA MANMOHAN, J (Oral): J U D G M E N T 1.Present writ petitions have been filed challenging the reassessmentnotices dated 27[th]March, 2021 and 28[th]March, 2021 issued under Section148 of the Income Tax Act, 1961 [‘the Act’] for the assessment years 2014-15 and 2015-16 as well as the assessment orders dated 30[th]March, 2022passed under Section 147 read with Section 143(3) of the Act. 2.Learned counsel for the Petitioner states that the impugned notices aswell as the orders are void ab initio as they have been issued in the name of‘Jindal Menthol & Investment Pvt. Ltd.’, a non-existing entity as it hadmerged with the Petitioner company with effect from 1[st]April, 2013 videorder dated 6[th]August, 2014 passed by this court under Section 394 of theCompanies Act, 1956. He relies on the decision of the Supreme Courtin Pr. Commissioner of Income Tax v. Maruti Suzuki India Limited,(2019) 416 ITR 613 (SC) wherein it has been held that the issuance of anotice to the non-existing company is a substantive illegality and not aprocedural violation. 3.Learned counsel for the Petitioner states that the income, alleged tohave escaped assessment, has been offered to tax in the hands of theamalgamated entity and assessment orders dated 29[th]December, 2016 and16[th]December, 2017 have been passed accepting the same. W.P.(C) Nos.6900/2022 & 6916/2022 4.Learned counsel for the Petitioner further states that the impugnedassessment order has been issued in violation of the principle of naturaljustice as the Petitioner was not given adequate opportunity of being heard.He points out that the Petitioner had not even been granted a day’s time torespond to the show cause notice dated 30[th]March, 2022. In support of hissubmission, he relies on the decision of this Court in the case of NidhiAgrawal v. ITO W.P.(C) 6259/2022 where under similar circumstances i.e.the time granted for replying to show cause notice was less than one day,this Court had set aside the assessment order. 5.Issue notice. 6.Mr.Sunil Agarwal, senior standing counsel accepts notice on behalf ofthe Respondents.He states that in the present case, the impugnedassessment orders have been passed in the name of ‘Jindal Exports andImports Private Limited’ (Successor to Jindal Menthol & InvestmentPrivate Limited) i.e. the amalgamated entity. He also states that the issue asto whether income has escaped assessment or not is a question of factwhich the petitioner can agitate in appeal proceedings. 5.Issue notice. 6.Mr.Sunil Agarwal, senior standing counsel accepts notice on behalf ofthe Respondents.He states that in the present case, the impugnedassessment orders have been passed in the name of ‘Jindal Exports andImports Private Limited’ (Successor to Jindal Menthol & InvestmentPrivate Limited) i.e. the amalgamated entity. He also states that the issue asto whether income has escaped assessment or not is a question of factwhich the petitioner can agitate in appeal proceedings. 7.Having heard learned counsel for the parties, this Court is of the viewthat even if the submission of learned counsel for the Respondents isaccepted, then also the impugned assessment orders are liable to be setaside as the Petitioner was not given adequate opportunity to file responseto the said show cause notice-cum-draft assessment orders. Consequently,as there has been a violation of principle of natural justice, the impugnedassessment orders as well as demand and penalty notices dated 31[st]March,2022 are set aside and the matter is remanded back to the Assessing Officerfor fresh adjudication. W.P.(C) Nos.6900/2022 & 6916/2022 Page 3 of 4 8.The petitioner shall file its response to the show cause notices dated30[th]March, 2022 within two weeks. The Assessing Officer is directed to fixthe date of hearing after four weeks and decide the same by way of areasoned order in accordance with law after giving an opportunity ofhearing to the petitioner. The rights and contentions of all the parties areleft open. 9.In view of the above, present writ petitions and applications standdisposed of. MANMOHAN, J MAY 02, 2022KA DINESH KUMAR SHARMA, J W.P.(C) Nos.6900/2022 & 6916/2022