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TMI Blog2024 (11) TMI 1162X X X X Extracts X X X X X X X X Extracts X X X X ..... unal (NCLT). Subsequently, by a letter dated March 29, 2018, the Assessing Officer of the amalgamating company was duly informed about the said amalgamation and a copy of the said order passed by the NCLT was also duly submitted to the concerned authority. A similar letter was also duly addressed to the Assessing Officer of the amalgamated company on March 29, 2018. 3. Thereafter, the amalgamated company was renamed Gloster Limited The order dated January 19, 2018 passed by the NCLT provided that with effect from January 1, 2015 and up to and including the effective date i.e. March 30, 2015, the amalgamating company shall carry on and be deemed to have carried on business for and on behalf of and in trust for the amalgamated company. Additionally, it provided that upon coming into effect of the scheme of amalgamation, the amalgamating company would stand dissolved without winding up. In view of the above, the amalgamating company stood dissolved without winding up on March 30, 2018. 4. Pursuant to the above, for the financial year 2017-18, consolidated accounts were prepared of the amalgamated company which incorporated all income and expenses of the amalgamating company. The ama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 2018-19 and had been assessed thereon under section 143(3). In the said reply, the petitioner also mentioned about the lack of break up but did not request for the same. The petitioner also requested for an opportunity of hearing. 8. On March 30, 2022, March 31, 2022, April 1, 2022, April 4, 2022 and April 5, 2022 the 2022 respectively, the petitioner's representative attended the office of the respondent No.1 to personally explain the matter but the concerned respondent did not have any time for the petitioner's representative. On April 5, 2022, the respondent No.1 indicated that a hearing would take place on April 7, 2022. 9. On April 7, 2022, instead of affording an opportunity of hearing, the Assessing Officer addressed a letter to the petitioner on the basis as if by its letter dated March 30, 2022, the petitioner had requested for details of the items mentioned in the notice under section 148A(b) and purported to provide such details in 45 sheets, the aggregate total of which amounted to Rs. 579,97,07,53,714/-, out of which Rs.339,06,74,106/- pertained to the heads mentioned in the notice under section 148A(b). Such details also included amounts pertainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... priate stage, if necessary. It is further contended that the assesse had failed to reflect the accounts of the amalgamating company despite repeated opportunities being provided or to provide an explanation for the same. In such circumstances, being left with no alternative, the Assessing officer reopened the case of the existing company. The assessee was also provided with several opportunities to explain its case. Thus, there can be no question of violation of the principles of natural justice. 13. For convenience, the relevant sections of the Act are as follows: 147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). Explanation.-For the purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,- (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated accounts. A scrutiny assessment under section 143(3) of the Act was made on March 2, 2021 on the basis of such consolidated accounts. This significant jurisdictional fact is conspicuously absent in the impugned orders. 16. Even prior to the said assessment, the Assessing Officers of both the amalgamating and amalgamated companies had been informed by letters dated March 29, 2018 of such amalgamation. In response to the e-mail dated January 23, 2019, the Assessing Officer had been duly informed by letter dated January 29, 2019 that in view of the amalgamation, the amalgamating company was not required to file any return for the assessment year 2018-19 and that the amalgamated company had already filed its return on the basis of audited accounts wherein income and expenses of the amalgamating company had been duly incorporated. This aspect of the matter has also been completed ignored by the respondent authorities and goes to the root of wrongful and arbitrary assumption of jurisdiction by the authorities. 17. In view of the above, the Assessing Officer could not have assumed jurisdiction under sections 147/148/148A of the Act on the ground that the amalgamating company was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the said assessment year, i.e. after March 31,2022. By reason of the third proviso to section 149(1) of the Act, the time or extended time allowed to the assessee, in terms of the show cause notice issued under section 148A(b), ought to be excluded. 21. In any event, no opportunity of hearing was granted to the petitioners despite requests. It was incumbent upon the Assessing Officer to grant an effective hearing to the assessee before passing the order under section 148A(d) of the Act. Consequently, there has been a violation of the principles of natural justice in the manner in which the impugned proceedings have been conducted. In this connection in Somnath Dealtrade (P.) Ltd. v. Union of India, (2022) 143 taxmann.com 71 (Calcutta), it has been held as follows: 16. In Girdhar Gopal Dalmia v. Union of India [2023] 450 ITR 143 (Cal), passed in M. A. T. No. 727 of 2022 dated June 21, 2022, the court considered the scheme of the Act after its amendment and introduction of section 148A and held as follows (page 146 of 450 ITR) : Firstly, clause (b) of section 148A of the Act provides for an opportunity of being heard to the assessee within such time as may be specified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of being heard by service of a notice to show cause provided a cause is cited within the time specified in the notice, which may vary from a minimum of seven days to a maximum thirty days from the date of issuance of the notice. Such time fixed by the notice can be extended on the basis of an application by the assessee. Although the impugned proceedings were initiated on March 23, 2022 by issuance of the notice under section 148A(b) whereby the petitioner was granted seven days to respond, i.e., by March 30, 2022. Nevertheless, the petitioner showed cause and requested for a personal hearing without filing a separate extension application. In view of the above, the contention of the Assessing Officer that he was not required by law to grant any personal hearing or any extension of time beyond the time fixed by the notice under section 148A(b) is without basis and untenable. 23. The Assessing Officer had seven days from 31 March 2022 i.e., upto 6 April 2022 to issue the notice under section 148. By the letter dated April 7, 2022, the Assessing Officer sought to make out as if the petitioner had asked for details even though the petitioner had not. The Assessing Officer suo moto ..... 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