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Ambuja Cements Rajasthan Ltd. Versus Assistant Commissioner of Wealth Tax-LTU, Mumbai

2016 (4) TMI 694 - ITAT MUMBAI

Validity of initiation of the proceedings u/s. 17 of W.T. Act - notice issued in the name of a non-existent amalgamating company - Held that:- Notably, ACRL, which was visited with the notice u/s. 17 of the Act had since amalgamated with ACL on 1.6.2004 in terms of an amalgamation scheme sanctioned by the BIFR. It is a trite law that initiation of the proceedings for reopening of the assessment hinges upon the service of a valid notice in terms of Sec. 17 of the Act. Ostensibly, the notice issue .....

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cannot be cured because it goes to the root of the jurisdiction to reopen the proceedings. - Decided in favour of assessee - WTA NO. 11/MUM/2014 - Dated:- 24-2-2016 - SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER For The Appellant : Shri Basant Kasat For The Respondent : Shri Neil Philip (DR) ORDER PER G.S. PANNU, AM : The captioned appeal by the assessee is directed against the order of CWT(A)-24, Mumbai dated 22.01.2014, pertaining to the Assessment Year 2004-05, w .....

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on the facts and in the circumstances of the case, the Ld. CIT(Appeals) erred in confirming the impugned order without appreciating the fact that when notice u/s 17 initiating reassessment proceedings is invalid, all subsequent proceedings become null and void. 1(c). That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and grossly erred in holding that the nullity of notice u/s 17 is curable u/s 42C. 2. That on the facts and in the circumstances of the .....

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ment Rajasthan Ltd. (in short ACRL‟) was engaged in the business of manufacture of cement and other related products. The said concern stood dissolved w.e.f. 1.6.2004 pursuant to its merger with one M/s. Ambuja Cements Ltd. (in short ACL‟) in terms of a scheme of amalgamation sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) vide orders dated 7.1.2004 and 27.5.2004. On 30.3.2011 a notice u/s. 17 of the Act was issued by the Assessing Officer on the ground tha .....

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ood dissolved and was not in existence inasmuch as it stood amalgamated with ACL. The Assessing Officer rejected the aforesaid plea of the assessee by relying on the provisions of Sec. 42C of the Act and stating that no notice shall be deemed to be invalid merely by reason of any mistake, defect or omission therein if such return of wealth, assessment, notice, summons or other proceedings is in substance and effect in conformity with or according to the intent and purpose of the Act. The Assessi .....

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for all the liabilities of ACRL. The CIT(A) also pointed out that replies to all the queries and notices of the Assessing Officer were furnished by ACL mentioning the subject as ACRL. For all the said reasons, CIT(A) upheld the stand of the Assessing Officer that provisions of Sec. 42C of the Act protects the initiation of assessment proceedings in the present case. Accordingly, the plea of the assessee that the assessment was invalid has been rejected. 6. Before us, the learned representative f .....

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pointed out that an identical controversy was considered by the Hon'ble High Court of Calcutta in the case of I.K. Agencies (P) Ltd. v. Commissioner of Wealth Tax, 347 ITR 664 wherein the plea of the assessee was upheld. A copy of the judgement of the Hon'ble Calcutta High Court has been placed on record. 7. On the other hand, the learned Departmental Representative (in short DR‟) appearing for the Revenue has not controverted the factual matrix brought out by the assessee but reit .....

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In this manner, the initiation of proceedings has been sought to be defended. 8. We have carefully considered the rival submissions. The preliminary point that has been raised by the appellant in this appeal revolves around the validity of initiation of the proceedings u/s. 17 of the Act. The Assessing Officer issued notice u/s. 17 of the Act on 30.3.2011 which is sought to be assailed by the appellant-company on the ground that the same was illegal, having been issued in the name of a non-exis .....

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present case, the fact that the amalgamated company, i.e. ACL, subsequently appeared in the proceedings cannot take away from the fact that the notice u/s. 17 of the Act was bad in law and such defect cannot be cured merely on account of the fact that the amalgamated company appeared subsequently. It is a well established position of law that the defect in the notice of reopening cannot be cured because it goes to the root of the jurisdiction to reopen the proceedings. The Hon'ble Calcutta .....

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