Assessment proceedings against amalgamated company - CASE LAW

BDR BUILDERS & DEVELOPERS PVT. LTD. vs. ACIT - HC Delhi -26 July 2017

Question of law that was discussed " A notice under section 148 has been issued against the amalgamated company on the date on which it was amalgamated by the order passed by high court. The Notice issued was related to earlier AY before such amalgamtion for which sec 143(1) was already issued by AO. The notices and assessment orders issued against amalgamated co. later of such amalgamtion would be void..."


Some notable findings and facts :

1- Merely the case where amalgamated co has responded some of the notices will not make any difference since the existence of the amalgamated company ceases to exist,

2- Reference to the court case Rustagi Engineering Udyog (P) Ltd. v. Deputy Commissioner of Income Tax where it was held that it is well settled law that amalgamated co would stand dissolved from the date on which such amalgamation would take place,

3-  The Court referred to the decision of this Court in case Spice Infotainment Ltd. v. CIT where the Court had upheld the order of the ITAT declaring the assessment against an Assessee after it was dissolved to be invalid. The Court termed it a ‘jurisdictional defect' ,

4- It was discussed that all notices should be served to the amalgamating company after the amalgamation effective date and it does not mean that proceedings against any transferor company before such amalgamation would be against transferee company,

this Court quashes the notice issued by the AO under Section 148 of the Act seeking to reopen the assessment of the Petitioner for the AY in question.

For full text of case law please refer -https://www.taxpundit.org/phocadownload/Taxpundit_Reporter/Taxpundit_Reporter_2017/August_2017/817Taxpundit6.pdf

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