Wp/59/2020 Of Nayara Energy Limited v. The Assistant Commissioner Of Income Tax Circle-5(3)(2) And 2 Ors

Digitallysigned byGAURIGAURI AMITGAEKWADAMITDate:GAEKWAD2021.12.1517:43:07+0530 IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.59 OF 2020 Nayara Energy Limited (Successor on amalgamation toVadinar Power Co. Ltd.) ….Petitioner V/s. The Assistant Commissioner of IncomeTax Circle – 5 (3) (2) & Ors. ….Respondents ---- Mr. P.J. Pardiwalla, Senior Advocate a/w. Mr. Niraj Sheth i/b. Mr. Atul K.Jasani for petitioner.Mr. Suresh Kumar for respondents. ---- CORAM : K.R. SHRIRAM &AMIT B. BORKAR, JJ. DATED : 13[th] DECEMBER 2021 AMIT B. BORKAR, JJ. P.C. : 1Petitioner is impugning an order dated 4[th] December 2019passed by respondent rejecting the objections raised by petitioner forAssessment Year 2014-2015 for the notice issued under Section 148 of theIncome Tax Act, 1961 (the said Act). 2One of the main ground of challenge to this notice apart frommany others is that the notice under Section 148 of the said Act has beenissued to a non existing company. Therefore, Mr. Pardiwalla states that asheld by this Court as well as the Apex Court in various judgments, one ofthe most recent being Principal Commissioner of Income Tax, New DelhiV/s. Maruti Suzuki India Ltd. and in Writ Petition No.2828 of 2019 dated11[th] August 2021 by this Court, the notice is bad in law. 3Mr. Pardiwalla submitted that on 31[st] October 2018 the NationalCompany Law Tribunal, Ahmedabad (NCLT) passed an order in a scheme ofamalgamation between Vadinar Power Company Limited and petitioner,which was earlier called Essar Oil Limited. On 30[th] November 2018 FormNo.INC-28 was filed with Registrar of Companies and on 10[th] December2018 intimation was also given to respondent no.1. In the letter dated10[th] December 2018, it is expressly mentioned “Accordingly, the companyhas ceased to exist w.e.f. November 30, 2018, i.e., from the date of filing ofe-form INC-28 with ROC” and this letter has been issued by petitioner onbehalf of merged entity “Vadinar Power Company Limited”. Even theletterhead shows “on behalf of merged company Vadinar Power CompanyLimited”. 4On 3[rd] January 2019 petitioner informed PrincipalCommissioner of Income Tax-5 about the amalgamation. On 31[st] January2019 respondent nos.1 and 2 were informed about the amalgamation.Notwithstanding that, on 31[st] March 2019 respondents issued a notice toVadinar Power Company Limited under Section 148 of the said Act thoughthe company had ceased to exist having been amalgamated with petitioner.On 14[th] May 2019 petitioner requested respondent to treat the return filedon 27[th] November 2014 as filed in compliance of the notice and soughtreasons recorded under Section 148(2) of the said Act. In the communication, petitioner has made it very clear that Vadinar PowerCompany Limited now merged with Nayara Energy Limited. On28[th] September 2019 once again respondent issued notice to Vadinar PowerCompany Limited, a non existing company. Petitioner responded by a letterdated 14[th] October 2019 where once again it was mentioned “NayaraEnergy Limited (on behalf of merged company) and also (on behalf ofmerged entity Vadinar Power Company Limited). On 18[th] October 2019,reasons recorded for reopening the assessment for Assessment Year 2014-2015 was provided again to Vadinar Power Company Limited, the nonexisting company. On 18[th] November 2019 petitioner objected to thevalidating of the reassessment proceedings and on the letterhead again it ismentioned Nayara Energy Limited (formerly known as Essar Oil Limited)(on behalf of merged company Vadinar Power Company Limited). Still theimpugned order disposing of the objections dated 4[th] December 2019 waspassed in the name of Vadinar Power Company Limited. In the entire orderdisposing of the objections, Mr. Pardiwalla submitted that there is noreference even made to any of the communications from petitioner thatVadinar Power Company Limited has ceased to exist having beenamalgamated with petitioner. 5In view of the above, the notice issued under Section 148 of thesaid Act to a non existing company is bad in law and therefore, even the order disposing of the objections passed will also be bad in law. 6In the circumstances, petition is allowed in terms of prayer clause – (a) which reads as under : (a) to issue a Writ of Certiorari or a Writ in thenature of Certiorari or any other appropriate Writ,Order or Direction under Article 226 of theConstitution of India calling for the records of thePetitioner’s case and after examining the legalityand validity thereof, quash and set aside theimpugned notice dated 31[st] March 2019 (ExhibitM) issued by Respondent No.1 under Section 148of the Act to reopen the assessment for theassessment year 2014-15 as well as the impugnedorder dated 4[th] December 2019 (Exhibit S) rejectedthe Petitioner’s objections for the assessment year2014-15. 7The Principal Chief Commissioner is directed to hold an enquiry against the concerned officers as to why despite being brought to theirnotice that Vadinar Power Company Limited is a non existing entity havingbeen amalgamated with petitioner notices were continued to be issued inthe name of Vadinar Power Company Limited and even the order disposingof the objections came to be passed in the name of Vadinar Power CompanyLimited resulting in the notice under Section 148 of the said Act itself beingquashed. The Principal Chief Commissioner, after holding an enquiry, maytake such action as required against the erring officers, if found guilty. Theenquiry shall be completed within six weeks from today. 8A copy of this order be sent to the Principal ChiefCommissioner, Mumbai and also sent to Chairman, CBDT and to the LawMinister (Government of India) for information and necessary action. 9Petition disposed. (AMIT B. BORKAR, J.) (K.R. SHRIRAM, J.)