TMI Blog2023 (8) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... EN VAISHNAV) 1. Rule returnable forthwith. Mr. Nikunt Raval, learned advocate waives service of notice of Rule for and on behalf of the respondents. 2. With consent of the learned advocates for the respective parties, the matter is taken up for final hearing today as the issue is covered by several decisions of this Court. 3. The prayer in this petition is to issue a writ of certiorari for quashing and setting aside the order under Section 148A(d) of the Income Tax Act, 1961 dated 30.7.2020 and the impugned notice of even date by which the respondent proposed to reopen the assessment of the deceased assessee for the AY 2017-18. 4. The facts in brief would indicate that late Shri Pradeep Roshanlal Jain filed his return of income for the AY 2017- 18 on 30.10.2017 declaring total income of Rs.16,97,640/-. Shri Jain (since deceased) died on 30.9.2020. A death certificate is annexed as Annexure `D to the petition. It is the case of the legal heir who has filed this petition that by various letters and emails between 16.12.2020 and 20.3.2022, the department was informed of the death of Shri Pradeep Jain. It appears that respondent issued a notice u/S.148 on 30.7.2022. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment. 6.3 In the case of Rajender Kumar Sehgal (Supra), the Delhi High Court observed at Paragraphs- 2 and 3 as under; 2. The undisputed facts are that the deceased assessee had filed income tax returns and continued to do so, till her death. The return for AY 2010-2011 was processed, in a routine manner and the deceased assessee was intimated about it. On 17.01.2015, the said assessee died. The impugned reassessment notice was issued under Section 148 of the Act to the said deceased; the petitioner, a legal representative of the deceased, Rajendra Kumar Sehgal (hereafter called the petitioner ) and he was intimated this fact; without prejudice. Thereafter, vide letter dated 15.05.2017, the petitioner also sought a copy of the reasons to believe . The revenue furnished the reasons to believe recorded on its file in support of its opinion that reassessment was necessary. This indicated that according to information received, the deceased had shown some transactions which led to a claim for losses brought forward, pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to a correct and alive person and not to the dead person. Thus, in the instant case the jurisdictional requirement under Section 148 of the Act of Service of Notice was not fulfilled. The law mandates that the moment the revenue came to know about the death of the original assesse, they are legally bound to make the legal representative for the purpose of proceeding in the matter. At the cost of repetition, during the original assessment proceeding itself, the original assesseeBhim Sen Chopra died and the assessing officer was well-informed, as such there was no question to issue a notice under Section 148 of the Act as against the dead person. 10. Heavy reliance has been made by learned Counsel for the Revenue that in view of the provision of Section 292 BB of the Act and the regular response by the petitioner has cured the defect of issuance of notice to the dead person. We are not in agreement with such contention, inasmuch as, Section 292 BB does not save complete absence of notice. It is only the infirmities in the manner of service of notice that this section seeks to cure, but in no case this section will save the revenue from issuing a notice to the dead pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved and held as under at Paragraphs20 to 33; 20 In Spice Entertainment, a Division Bench of the Delhi High Court dealt with the question as to whether an assessment in the name of a company which has been amalgamated and has been dissolved is null and void or, whether the framing of an assessment in the name of such company is merely a procedural defect which can be cured. The High Court held that upon a notice under Section 143 (2) being addressed, the amalgamated company had brought the fact of the amalgamation to the notice of the assessing officer. Despite this, the assessing officer did not substitute the name of the amalgamated company and proceeded to make an assessment in the name of a non-existent company which renders it void. This, in the view of the High Court, was not merely a procedural defect. Moreover, the participation by the amalgamated company would have no effect since there could be no estoppel against law : 11. After the sanction of the scheme on 11th April, 2004, the Spice ceases to exit w.e.f. 1st July, 2003. Even if Spice had filed the returns, it became incumbent upon the Income tax authorities to substitute the successor in place of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad amalgamated with Lakhanpal Infrastructure Pvt Ltd. A Division Bench of the Delhi High Court upheld the setting aside of assessment orders, noting that Spice Entertainment is an authority for the proposition that completion of assessment in respect of a non-existent company due to the amalgamation order, would render the assessment a nullity. 23 In Micra India, the original assessee Micra India Pvt. Ltd had amalgamated with Dynamic Buildmart (P) Ltd. Notice was issued to the original assessee by the Revenue after the fact of amalgamation had been communicated to it. The Court noted that though the assessee had participated in the assessment, the original assessee was no longer in existence and the assessment officer did not the take the remedial measure of transposing the transferee as the company which had to be assessed. Instead, the original assessee was described as one in existence and the order mentioned the transferee s name below that of the original assessee. The Division Bench adverted to the judgment in Dimension Apparels wherein the High Court had discussed the ruling in Spice Entertainment. It was held that this was a case where the assessment was contrary to l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away the jurisdiction of any other court, tribunal or authority to express any opinion in conflict with or in departure from the view taken by this Court because permitting to do so would be subversive of judicial discipline and an affront to the order of this Court.However this would be so not by reference to the doctrine of merger. 27. The submission however which has been urged on behalf of the Revenue is that a contrary position emerges from the decision of the Delhi High Court in Skylight Hospitality LLP which was affirmed on 6 April 2018 by a two judge Bench of this 32 Special Leave Petition (C) (D) No. 14106 of 2018 Court consisting of Hon ble Mr Justice A K Sikri and Hon ble Mr Justice Ashok Bhushan. In assessing the merits of the above submission, it is necessary to extract the order dated 6 April 2018 of this Court: In the peculiar facts of this case, we are convinced that wrong name given in the notice was merely a clerical error which could be corrected under Section 292B of the Income Tax Act. The special leave petition is dismissed. Pending app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the name of the Company, which had ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/ s. Skylight Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused. 28. The decision in Spice Entertainment was distinguished with the following observations: 19. Petitioner relies on Spice Infotainment Ltd. v. Commissioner of Service Tax, (2012) 247 CTR 500. Spice Corp. Ltd., the company that had filed the return, had amalgamated with another company. After notice under Section 147/148 of the Act was issued and received in the name of Spice Corp. Ltd., the Assessing Officer was informed about amalgamation but the Assessment Order was passed in the name of the amalgamated company and not in the name of amalgamating company. In the said situation, the amalgamating company had filed an appeal and issue of validity of Assessment Order was raised and examined. It was held that the assessment order was invalid. This was not a case w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely a technical error which could be corrected 36 Civil Appeal No. 285 of 2014 and connected cases 37 Special Leave Petition No. 7409 of 2018 under Section 292B. Thus, there is no conflict between the decisions in Spice Enfotainment on the one hand and Skylight Hospitality LLP on the other hand. It is of relevance to refer to Section 292B of the Income Tax Act which reads as follows: 292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. In this case, the notice under Section 143(2) under which jurisdiction was assumed by the assessing officer was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section, income includes any gain accruing from the transfer, in any manner whatsoever, of the business or profession as a result of the succession Now, in the present case, learned Counsel appearing on behalf of the respondent submitted that SPIL ceased to be an eligible assessee in terms of the provisions of Section 144C read with clause (b) of sub section 15. Moreover, it has been urged that in consequence, the final assessment order dated 31 October 2016 was beyond limitation in terms of Section 153(1) read with Section 153 (4). For the purposes of the present proceeding, we do not consider it necessary to delve into that aspect of the matter having regard to the reasons which have weighed us in the earlier part of this judgment. 32. On behalf of the Revenue, reliance has been placed on the decision of this Court in Commissioner of Income Tax, Shillong v Jai Prakash Singh38 ( Jai Prakash Singh ). That was a case where the assessee did not file a return for three assessment years and died in the meantime. His son who was one of the legal representatives filed returns upon which the assessing officer issued notices under Section 142 (1) and Section 143 (2). These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 142(1) and 143(2). No objection was raised by the legal representative who had filed the return that a notice should also to be served to other legal representatives of the deceased assessee. No 40 (1943) 11 ITR 202 (Bombay) objection was raised before the assessing officer. Similarly, the decision in Maharaja of Patiala was a case where the notice had been served on the legal representative, the successor Maharaja and the Bombay High Court held that it was not void merely because it omitted to state that it was served in that capacity. 33. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s question viz. whether the Income Tax Officer had reason to believe that underassessment had resulted from non-disclosure of material facts, before the Income Tax Officer himself in the assessment proceedings and if unsuccessful there before the appellate officer or the Appellate Tribunal or in the High Court under Section 66(2) of the Indian Income Tax Act. The existence of such alternative remedy is not however always a sufficient reason for refusing a party quick relief by a writ or order prohibiting an authority acting without jurisdiction from continuing such action. 29. In the present case the Company contends that the conditions precedent for the assumption of jurisdiction under Section 34 were not satisfied and come to the court at the earliest opportunity. There is nothing in its conduct which would justify the refusal of proper relief under Article 226. When the Constitution confers on the High Courts the power to give relief it becomes the duty of the courts to give such relief in fit cases and the courts would be failing to perform their duty if relief is refused without adequate reasons..... THE SINE QUA NON FOR ACQUIRING JURISDICTION TO REOPEN AN ASSESSM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded Act was required to be followed. 6.7.1 Here, it is pertinent to note that the notice was issued in the name of the present petitioner, who happens to be the legal heir of the original assessee, i.e. late Ms. Shah. Thus, it becomes clear that, before issuing the notice to the present petitioner, the Respondent-authorities failed to comply with the provisions of the amended Act. It is not being disputed by the Respondent-authorities that the impugned order is also passed in the name of the dead person, i.e. late Ms. Shah, which is a nullity. Under the circumstances, the provisions of Section 292B and 292BB of the Act shall not apply in the facts of the case on hand, as discussed herein above. 6.7.2 Keeping in mind the ratio laid down by the Apex Court on the issue involved in this matter as well as the decisions of the other High Courts, we are of the view that the proceedings initiated by the Respondentauthorities against a dead person, i.e. late Ms. Shah in this case, as well as the impugned orders passed by it deserves to be quashed and set aside. 7. In view of above, this petition is allowed. The impugned order u/S.148(d) dated 30.7.2022 and the impugned no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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