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TMI Blog2023 (5) TMI 1391X X X X Extracts X X X X X X X X Extracts X X X X ..... e and otherwise unreasonable being passed against the facts and laws applicable in the case. 2. That the Learned Commissioner of Income Tax (Appeals)-21, Kolkata misdirected himself in law in confirming the validity of the impugned reassessment proceedings which was initiated vide issue of notice dated 30th March, 2018 issued under section 148 of the Act in the name of non-existent company viz. "GPT Ventures Private Limited", which had already amalgamated with Appellant Assessee Company i.e. GPT Sons Private Ltd, and thereby confirming the validity of the said impugned Assessment order dated 29.12.2018 passed under section 147/143(3) of the Act. 3. That the Learned Commissioner of Income Tax (Appeals)-21, Kolkata erred in confirming the validity of the impugned reassessment proceedings which was initiated vide issue of notice dated 30th March, 2018 issued under section 148 of the Act despite of the patent defect that the said notice was issued and the purported reassessment proceedings was initiated thereon in the name of non-existent amalgamated company viz. "GPT Ventures Private Limited" arbitrarily on the ground that such defect is a curable defect under section 292B of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erator or any other person whatsoever. 8. That the Learned Commissioner of Income Tax (Appeals)-21, Kolkata failed to appreciate that the veracity and genuineness of the aforesaid sum of Rs. 9,55,00,000 cannot be doubted as the said sum received by M/s. GPT Venture Private Limited from M/s Instyle Trading Pvt. Ltd on various dates of the Financial Year 2010-11, became own money of M/s. GPT Venture Private Limited w.e.f. 01.04.2010 pursuant to the Scheme of Amalgamation approved by Hon'ble Calcutta High Court vide its order dated 18th March, 2011 rendered in Company Petition No. 546 of 2010. 9. That the Learned Commissioner of Income Tax (Appeals)-21, Kolkata erred in confirming the arbitrary addition of Rs. 9,55,00,000, made by the Assessing Officer as unexplained cash credit under section 68 of the Income Tax Act, by relying on various judgements which are inapplicable to the facts of this case and are totally distinguishable and by arbitrarily not considering the detailed submissions and judgments relied upon by the Appellant Assessee Company. 10. That the Appellant Assessee Company craves leave to add, alter or amend any ground of appeal during the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no. 8, it is stated that ITPL was amalgamated and Shri Ramesh Chand Daga was required to state the nature of business of ITPL. Question no. 10 also dealt with asking details of scheme of amalgamation of ITPL. Further, from perusal of question no. 15, it is noted that in the question itself, it has been stated that ITPL was amalgamated into the GPT group concern. 3.3. Based on this statement, Ld. AO recorded the reasons to believe that investments made by the GPT group are nothing but own unaccounted money of the assessee which has been routed back in their regular books of accounts in the guise of share capital and share premium and hence, there is an escapement of income which needs further scrutiny to safeguard the interest of revenue. The reasons so recorded are placed in the paper book at page nos. 71 to 78. Based on these reasons to believe, notice u/s. 148 of the Act dated 30.03.2018 was issued in the name of GVPL. 3.4. There have been two schemes of amalgamation approved by the orders of Hon'ble High Court of Calcutta, the first order is dated 18.03.2011 which is effective from 01.04.2010, approving the merger of two companies i.e. RNT Consultants & Investors Pvt. Ltd. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amated company) since amalgamated to M/s. GSPL (amalgamating company". Ld. CIT, DR thus submitted that the assessment was completed by referring to the amalgamated company GSPL, into which GVPL had got merged. 6. We have heard the rival contentions and perused the material available on record. Admittedly, it is a fact on record and is undisputed that GVPL was not in existence on the date of issue of notice u/s. 148, dated 30.03.2018 as it had already got merged into GSPL under the approved scheme of amalgamation by the Hon'ble High Court of Calcutta vide order dated 13.07.2012, which was effective from 01.04.2011. It is also a fact on record that ITPL had got merged into GVPL under the similar approved scheme of amalgamation effective from 01.04.2010. From the perusal of the order of Hon'ble High court at Calcutta which approved the scheme of amalgamation relating to GVPL and GSPL, from its page no. 5, we note that prior to giving approval to the scheme of amalgamation, Hon'ble high Court had issued notice to the Central Government to put up its case. However, despite notice having been served, nobody appeared to represent the Central Government. Relevant extracts from the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant documents in respect of scheme of amalgamation to the Central Government, income tax authorities, Reserve Bank of India, Securities & Exchange Board and such other regulators or authorities who are likely to be affected by the scheme of amalgamation, to make their representation. The observations of Hon'ble Supreme Court in this respect are extracted as under: "4.3. In compliance with section 230(5) of the Companies Act, 2013, notices under Form No. CAA. 3 under sub-Rule (1) of Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 were sent to the Department. Sub-section (5) of section 230 of the Companies Act, 2013 provides as under: "(5) A notice under sub-section (3) along with all the documents in such form as may be prescribed shall also be sent to the Central Government, the income-tax authorities, the Reserve Bank of India, the Securities and Exchange Board, the Registrar, the respective stock exchanges, the Official Liquidator, the Competition Commission of India established under sub-section (1) of section 7 of the Competition Act, 2002, if necessary, and such other sectoral regulators or authorities which are likely to be affe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.10.2017, 20.10.2017, 26.10.2017, 28.12.2017, 10.01.2018, 20.04.2018 and 01.05.2018; and, vide Orders dated 18.05.2017 and 30.08.2017 by the NCLT, Guwahati. Accordingly, the Schemes attained statutory force J.K. (Bom.) (P.) Ltd. v. New Kaiser-I-Hind Spg. &Wvg. Co. Ltd. [1970] 40 Compo Cas. 689 not only inter se the Transferor and Transferee Companies, but also in rem, since there was no objection raised either by the statutory authorities, the Department, or other regulators or authorities, likely to be affected by the Schemes." 6.2. The companies Act, 1956 contained similar provisions u/s. 394 and 394A as referred above by the Hon'ble Supreme Court from the Companies Act, 2013 while observing as to sending all the relevant documents in respect of Scheme of Amalgamation to the Central Government to make its representation. 7. We observe from the material on records that in the reasons to believe recorded by the Ld. AO, reference has been made to the amalgamation of ITPL into GVPL which evidently demonstrates that the fact of amalgamation was in the knowledge of the Ld. AO at the time of recording of reasons to believe, after which only approval is sought from the appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1963) 48 ITR 59 (SC). 8.3. In a recent decision by the Hon'ble Jurisdictional High Court of Calcutta in the case of Brubeck Resources Pvt. Ltd. Vs. Union of India in WPA No. 1791 of 2020 order dated 02.08.2021 wherein notice u/s. 148 was issued in the name of amalgamated company, had observed in para 10 by placing reliance on another decision of Hon'ble Gujarat High Court in the case of Takshashila Realties Pvt. Ltd. Vs. DCIT reported in 2016 SCC online Gujarat 6462, as under: "10. Heard the learned Counsels appearing on behalf of the respective parties at length. At the outset, it is required to be noted and it is not in dispute that the impugned notices under Section 148 of the Income Tax Act have been issued against the original assessee on 21.01.2011 to reopen the assessment for the Assessment year 2009-10. It is also not in dispute that the respective petitioners-original assessee are ordered to be amalgamated with one Takshashila Gruh Nirman (Subsequently named as Takshahila Realties Pvt. Ltd). The scheme of amalgamation has been sanctioned by this Court, by which the respective petitioners are ordered to be amalgamated into Takshashila Gruh Nirman (Subsequently nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oving of the scheme of amalgamation. Participation in the proceeding by the appellant in the circumstances cannot operate as an estoppels against law. The relevant extracts in this respect are reproduced as under: "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 dismissed the appeal of the Revenue in Spice Entertainment on 2 November 2017. The decision in Spice Entertainment has been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011-12. In doing so, this Court has relied on the decision in Spice Entertainment. " While arriving at such a decision, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by suppressing the fact of amalgamation. It was contested by the assessee that notice has been issued on a non-existent entity i.e MRPL which had got amalgamated into MIPL, though the fact of which was never brought on record including in the course of search and other subsequent proceedings. Having regard to the facts of the case, the appeal of the Revenue was allowed. Relevant paragraph from this decision are reproduced as under; "41. In the light of the facts, what is overwhelmingly evident is that the amalgamation was known to the assessee even at the stage when the search and seizure operations took place, as well as statements were recorded by the revenue of the directors and managing director of the group. A return was filed, pursuant to notice, which suppressed the fact of amalgamation; on the contrary, the return was of MRPL. Though that entity ceased to be in existence, in law, yet, appeals were filed on its behalf before the CIT, and a cross appeal was filed before ITAT. Even the affidavit before this court is on behalf of the director of MRPL. Furthermore, the assessment order painstakingly attributes specific amounts surrendered by MRPL, and after considering the sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ored to the file of ITAT, which shall proceed to hear the parties on the merits of the appeal as well as the cross objections, on issues, other than the nullity of the assessment order, on merits. The appeal is allowed, in the above terms, without order on costs." 8.6. From the above it is noted that the said judgment is given on its peculiar set of facts wherein conduct of assessee consistently held itself out as the assessee though it had amalgamated into another company. In the present case before us, the facts are materially different from these, hence distinguished. 9. Considering the above judicial precedents in the present case before us, it is a fact on record as noted from the reasons to believe recorded by the Ld. AO that he already had the knowledge about the amalgamation which had taken place within the GPT group companies since questions were raised while recording statement of certain persons which formed the basis for initiating the proceeding u/s. 148 read with section 147 of the Act. Further, from the relevant extracts of the order of Hon'ble Jurisdictional High Court of Calcutta which approved the Scheme of Amalgamation, it is noted that notices were issued on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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