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Q Validity of 148 notice when the assessment for the same assessment year has not concluded yet?  IN THE DELHI HIGH COURT DCM Shriram Ltd. v. Asstt. CIT, W.P.(C) 6627/2022 & CM APPL.20136/2022 on dated 10 May, 2022

 

Ans: Notice for reassessment could not have been issued. IN THE DELHI HIGH COURT DCM Shriram Ltd. v. Asstt. CIT, W.P.(C) 6627/2022 & CM APPL.20136/2022 on dated 10 May, 2022- FCA BPMUNDRA

The admitted position is that the assessment of the petitioner company i.e. DCM Shriram Ltd. for the assessment year 2018-19 has not concluded yet and the same is pending adjudication before Dispute Resolution Panel. Consequently, this Court is in agreement with the submission of learned counsel for the petitioner that notice for reassessment could not have been issued to the petitioner for the assessment year 2018-19.

 

IN THE DELHI HIGH COURT

MANMOHAN & DINESH KUMAR SHARMA, JJ.

DCM Shriram Ltd. v. Asstt. CIT

W.P.(C) 6627/2022 & CM APPL.20136/2022 10 May, 2022

Petitioner by: V.P. Gupta, Advocate with Anlinav Kumar, Advocate

Respondent by: Kunal Sharma, Sr. Standing Counsel with Zehra Khan, Jr. Standing Counsel and Shray Nargotra, Advocate

JUDGMENT

Manmohan, J (Oral)

 

1. Present writ petition has been filed challenging the Notice, dated 4-4-2022 issued under section 148 of the Income Tax Act, 1961 (‘the Act’) in the name of Petitioner Company i.e. DCM Shriram Ltd. in respect of Permanent Account Number (‘PAN’) of Bioseed Research India (P) Ltd., which stood amalgamated with the Petitioner Company with effect from 1-4-2013 in pursuance to the order passed by Delhi High Court under sections 391 to 394 of the Companies Act, 1956 and is not in existence since then.

 

8. Learned counsel for the Petitioner states that the impugned notice has been issued pursuant to the Notice, dated 17-3-2022 issued under section 148A(b) of the Act in the name of Bioseed Research India (P) Ltd., which company is not in existence. He states that in the notice, dated 17-3-2022, issued in the name of Bioseed Research India (P) Ltd., the Respondent referred to certain transactions of foreign remittances and had stated that return of income was not filed by the petitioner company for the assessment year 2018-19. He further states that the Petitioner Company duly informed the Respondent vide its Letter, dated 24-3-2022 that the company, namely, Bioseed Research India (P) Ltd. is not in existence. It was also brought to the notice of the respondent, vide the aforesaid letter, that the transactions referred to in the said notice of the Respondent were undertaken by the Petitioner Company and same had been duly accounted for in the books of the Petitioner company.
9. He states that despite the aforesaid communication, the Respondent passed the Order, dated 4-4-2022 under section 148A(d) of the Act in the name of non-existent company, i.e. Bioseed Research India (P) Ltd. He further states that in the aforesaid order, the Respondent has taken note of the event of amalgamation and has also noted that PAN of the Company (Bioseed Research India (P) Ltd.) had been marked with the amalgamated company i.e. the Petitioner company on ITBA Portal. He states that the Respondent subsequently issued the impugned notice under section 148 of the Act in the name of Petitioner company with PAN of Bioseed Research India (P) Ltd.
10. He also states that assessment in the case of the Petitioner company for the assessment year 2018-19 has still not concluded and same is pending adjudication before the Dispute Resolution Panel (‘DRP’). Therefore, according to him, reassessment notice could not have been issued in the case of Petitioner Company for the assessment year 2018-19.
11. Issue notice. Mr. Kunal Sharma, learned counsel for the respondent-revenue, accepts notice.
12. He states that in the present case, though the Notice, dated 17-3-2022 under section 148A(b) and the impugned Order, dated 4-4-2022 under section 148A(d) had been issued/passed in the name of Bioseed Research India (P) Ltd., yet the same had been served upon the successor entity i.e. DCM Shriram Ltd. He emphasises that the petitioner company i.e. DCM Shriram Ltd. was well aware of the proceedings right from the inception and consequently there has been no violation of principle of natural justice. He lastly states that notice under section 148 has been issued in the name of correct entity i.e. DCM Shriram Ltd.
13. Having heard learned counsel for the parties, the admitted position is that the assessment of the petitioner company i.e. DCM Shriram Ltd. for the assessment year 2018-19 has not concluded yet and the same is pending adjudication before Dispute Resolution Panel. Consequently, this Court is in agreement with the submission of learned counsel for the petitioner that notice for reassessment could not have been issued to the petitioner for the assessment year 2018-19.
14. Accordingly, on this short ground alone, the present writ petition and application are allowed. If the law permits the respondent/revenue to take further steps in the matter, it shall be at liberty to do so. Needless to state that if and when such steps are taken and if the petitioner has a grievance, it shall be at liberty to take its remedies in accordance with law.

FCA BPMUNDRA