Bombay High Court
Shree Ganesh Trust vs Chiman S/O Dayaldas Sainani on 17 November, 2025
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
2025:BHC-OS:21233-DB
5.wp.4017.2025.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.4017 OF 2025
Shell India Markets Private Limited .. Petitioner
Versus
The Deputy Commissioner of Income Tax,
Circle-3(4), Mumbai & Anr. .. Respondents
Digitally
signed by
Mr. J. D. Mistri, Senior Advocate a/w Vishal Kalra,
UTKARSH
UTKARSH KAKASAHEB
KAKASAHEB BHALERAO
Sheeja John, Snigdha Gautam, Anoushka John i/b M. P.
BHALERAO Date:
2025.11.18
12:12:55
+0530
Savla & Co., Advocates for the Petitioner.
Mr. Arjun Gupta, Advocate for the Respondent.
CORAM : B. P. COLABAWALLA &
AMIT S. JAMSANDEKAR, JJ.
DATE : NOVEMBER 17, 2025
P. C.
1. Rule. Rule made returnable forthwith. The Respondents
waive service. With the consent of the parties, taken up for final
hearing.
2. The present Petition, filed under Article 226 of the
Constitution of India, 1950, prays for orders to quash and set aside (i)
the impugned notice dated 17th July 2025 issued under Section 143(2)
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of the Income Tax Act, 1961 (' the Act') (Exhibit-H), (ii) a notice
dated 26thAugust 2025 issued under Section 142(1) of the Act
(Exhibit-J),and (iii) all proceedings pursuant thereto for the
Assessment Year ('A.Y.') 2007-08.
3. For the A.Y.2007-08, the erstwhile assessee, i.e., Shell
Technology India Private Limited ("STIPL") filed its return of income
on 30thOctober 2007, declaring a total income of INR 26,53,092.
4. Thereafter, the erstwhile assessee, STIPL merged with
the Petitioner, Shell India Markets Private Limited, with
effect from 01st April 2008, pursuant to a Scheme of Amalgamation
approved by the Hon'ble High Courts of Karnataka and Madras vide
orders dated 22nd February 2010 and 24th February 2010, respectively.
The Scheme of Amalgamation provided inter alia that upon the
Scheme becoming effective, STIPL shall stand dissolved without
undergoing the process of winding up.
5. The Petitioner, by way of submission dated 21 stSeptember
2010, brought to the attention of the then Assessing Officer, the fact
of the aforesaid amalgamation/merger and the name of the merged
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entity [i.e. the Petitioner]. The Petitioner also furnished copies of the
orders passed by the Hon'ble High Courts. However, the then
Assessing Officer proceeded with the assessment proceedings and
issued inter alia a notice under Section 143(2) of the Act on 19 th
November 2010 in the name of 'STIPL', which was not in existence as
on that date. Thereafter, a final Assessment Order dated 07 th October
2011 under Section 143(3) read with Section 144C(13) of the Act, was
also passed in the name of erstwhile entity, i.e. STIPL.
6. In appellate proceedings, the Income Tax Appellate
Tribunal, vide its order dated 20th December 2017, held that the
Assessment Order dated 7th October 2011, having been passed in the
name of a non-existent entity, i.e. STIPL, was a nullity in the eyes of
law and liable to be quashed.
7. Respondent No. 1, challenged the Tribunal's order by way
of appeal to this Court. This Court, by its judgment and order dated
27th March 2025 [in Income Tax Appeal No. 2381 of 2018], upheld the
Tribunal's order setting aside the assessment order dated 7 th October
2011. This Court in its judgement and order dated 27 th March 2025
clarified that the Department's appeal against the Tribunal's order
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was being dismissed solely on the ground that the notice and the
Assessment Order had been passed in the name of the transferor
company (STIPL), and accepted the submission of the Respondent-
Assessee that such orders could not have been made against a non-
existent company. The Court further observed that the consequence
of this submission was that the Assessment Order and Notice ought to
have been issued in the name of the transferee company and not the
transferor. Accepting this position, the Court clarified that its order
dated 27th March 2025 would not preclude the Appellant-Revenue
from initiating fresh proceedings against the transferee company, in
accordance with law, for assessing the income in the hands of the
transferee company.
8. Without taking any other steps, on 17 th July 2025,
Respondent No.1 issued a notice to the Petitioner under Section
143(2) of the Act referring to the order of this Court dated 27 th March
2025, claiming that income was proposed to be assessed in the
Petitioner's hands in "compliance" with the order of this Court, and
hence required the Petitioner to submit evidence in support of "its"
return of income, and gather all information, documents which may
be relevant.
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9. In response thereto, the Petitioner vide its letter dated
29th July 2025, explained that the said notice was barred by
limitation, that no assessment order could be passed in this manner,
and no notice under Section 148 of the Act had been served on it, and
hence the notice was invalid and beyond jurisdiction. Instead of
dropping the proceedings, Respondent No.1 issued a notice under
Section 142(1) of the Act, wherein he relied upon Section 260 of the
Act to justify the proceedings and required the Petitioner to submit
various details within 15 days. This notice also purports to provide an
opportunity of being heard with respect to "all issues raised in under
Section 148 of the Act (reasons for reopening)".
10. The Petitioners have, by this Petition, challenged the
notice under Section 143(2) dated 17th July 2025 and the notice under
Section 142(1) dated 28th August 2025.
Submissions on behalf of the Petitioner
11. Mr. Mistri, learned Senior Counsel appearing for the
Petitioner, has assailed the legality and validity of the impugned
notices on various grounds set out in the Petition.The main
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contentions urged were (i) there was no "finding or direction" by the
High Court when dismissing the revenue's appeal of the type that
would enable the revenue to apply Sections 150 or 153(6) of the Act;
(ii) assuming for the sake of argument that it was held that the High
Court's order contained such a finding or direction, the relevant
statutory provisions had not been adhered to when seeking to
undertake further proceedings to assess the Petitioner; (iii) any
proposed assessment order would be barred by limitation; (iv) the
impugned notice was barred by limitation; (v) the provisions of the
Act invoked by the Respondents did not confer jurisdiction on
Respondent No.1; and (vi) Respondent No.1 had no jurisdiction to
issue the impugned notices.
12. Mr. Mistri submitted that the impugned Notices have
been issued on a complete misreading of the judgment dated 27 th
March 2025. The judgment does not contain any finding or direction
that would satisfy the well settled legal meaning of the phrase. What is
contemplated by the phrase is that the finding or direction must be
such as is necessary for the disposal of a particular case. In the instant
case, this Court in its judgement and order dated 27th March 2025 had
simply applied the well settled law laid down by the Hon'ble Supreme
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Court in Principal CIT vs Maruti Suzuki India Ltd. [(2019)
416 ITR 613 (SC)] and Reliance Industries Ltd. Vs P.L.
Roongta & Ors. [(2025) 479 ITR 770], and held that no
assessment order could be passed in the name of a non-existent entity
such as STIPL. He submitted that the subsequent
amplification/clarification issued was not necessary to dispose of the
appeal, and hence could not be considered to fall within the meaning
of the phrase "finding or direction" issued by this Court allowing the
Respondents to overcome the limitation provisions under the Act. He
emphasised that the words "this order would not preclude the
Appellant-Revenue from initiating fresh proceedings against
transferee company, in accordance with law" ex facie make it clear
that the Court merely left it open to the Respondents to take any steps
permitted by the Act. These words do not amount to a direction to
initiate fresh assessment for A.Y.2007-08, nor completion of the
assessment under Section 153 of the Act, in the hands of the
Petitioner.
13. In this connection, Mr. Mistri has placed reliance on the
decision of this Hon'ble Court in the case of Wavy Construction
LLP V/S Assistant Commissioner of Income-Tax [(2025)
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473 ITR 1 (Bombay)], which has re-iterated the legal position,
after an exhaustive review of the authorities on the subject, including
the decisions of the Hon'ble Supreme Court in ITO V/S Murlidhar
Bhagwan Das [(1964) 52 ITR 335 (SC)] and Rajinder Nath
V/S CIT [(1979) 120 ITR 14 (SC)].
14. Mr. Mistri contended that the impugned notice under
Section 143(2) of the Act, was clearly issued beyond the period of
limitation prescribed in the proviso to Section 143(2). He submitted
that the impugned notice under Section 143(2) has been issued
contrary to the statutory period of three months from the end of the
financial year in which the return was furnished and is, invalid and
bad in law for this reason as well. Further, the Petitioner contends
that, the conditions prescribed under Section 143(2) are not attracted,
since the provision stipulates that the Assessing Officer may issue a
notice only after being satisfied that it is expedient or necessary to
scrutinize the return of the assessee. Mr. Mistri contended that no
such satisfaction, as required by law, has been recorded or
demonstrated by Respondent No.1 in the present case.
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15. It is urged that even assuming for the sake of argument it
is held that the High Court order contains a "finding or direction" as
contemplated by Sections 150 and 153(6) of the Act, further
proceedings against the Petitioner could not be taken by merely
issuing the impugned notice under Section 143(2) of the Act. Section
150 of the Act explicitly requires that a notice/proceeding under the
re-assessment provisions of the Act must first be issued. It was
submitted that despite what is mentioned in the Section 142(1) order
dated 26th August 2025, Respondent No.1 has admitted in the
affidavit in reply dated 3rd November 2025 that no Notice under
Section 148 of the Act for reopening the assessment has been issued
to the Petitioner. The proceedings are, therefore, invalid and bad in
law for this reason as well.
16. Mr. Mistri also contended that in any event it was the
Tribunal [by its order dated 20th December 2017] that had quashed
the impugned assessment order dated 7th October 2011. Accordingly,
even if the extended period of limitation permitted by Section 153(6)
of the Act was available, it would have to be calculated from the date
of receipt of the Tribunal's order. The High Court's Judgement dated
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27th March 2025, merely dismissed the Revenue's appeal, and could
not further extend the period of limitation.
17. The grounds in the Petition also highlight other
infirmities in the impugned notices, inter alia, that the notices are
issued to the Petitioner in its standalone capacity and not as the
successor to STIPL. It is submitted that Section 260(1A) of the Act,
merely empowers the Assessing Officer to give effect to an order
passed by the High Court under Section 260A of the Act, and nothing
further. For all these reasons, it was contended that the impugned
Notice (s) issued under Section 143(2) as well as 142(1) are bad and
ought to be set aside.
Submissions on behalf of the Revenue
18. On the other hand, Mr. Gupta, learned Counsel for the
Revenue, while opposing the Petition, relies solely on Section 153(6)
of the Act. Mr. Gupta contended that the High Court order records
that "...the consequence of the Petitioner's submission and the order
... is that the income should have been assessed in the name of the
transferee company and not the transferor company," and that this
constitutes a finding or direction. On this basis, Mr. Gupta argued
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that no further step was required and Respondent No.1 was entitled
to straightaway issue notice under Section 143(2) of the Act and
proceed to make an assessment in the hands of the Petitioner. It was
urged that in pursuance thereof, the Revenue was entitled to pass an
order within the extended period of twelve months as provided under
Section 153(6) of the Act, reckoned from the end of the month in
which this Court's order was received by the Revenue authorities. Mr.
Gupta contended that the present case does not require reassessment
under Section 148 but is simply an assessment pursuant to the High
Court's findings. In support of this contention, he referred to certain
observations of the Hon'ble Supreme Court in Rajinder Nath V/S
Commissioner of Income Tax [(1979) 120 ITR 14 (SC)],
extracted in the affidavit in reply dated 3 rd November 2025. Mr.
Gupta, for Respondent No.1, accepted that in view of the plain
language of the order of this Court, no direction can be said to have
been issued, but contended that the judgement contains a finding that
the income is to be assessed in the hands of the
Petitioner/amalgamated company. It was urged that the original
period of limitation for passing an order of assessment was not
applicable, and the extended limitation period under Section 153(6) of
the Act became available for passing an assessment order in the
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hands of the Petitioner. Mr. Gupta submitted that the interpretation
canvassed by the Petitioner would make the provisions of Section
153(6) otiose and also placed reliance on the decision in the case of
Reliance Industries Ltd. V/S P. L. Roongta & Ors. [(2025)
479 ITR 770] (order dated 14th February 2025), wherein similar
directions were issued by this Court. It was his further submission
that the Petitioner is not correct in contending that the impugned
notice is barred by limitation in view of the proviso to Section 143(2)
of the Act, and that the Court should ignore the proviso, since the
proviso cannot apply to a notice issued in such a "second round" of
proceedings. He therefore submitted that the Petition ought to be
dismissed.
Reasons and conclusion
19. We have considered the submissions made on behalf of
the Petitioner and the Revenue. There is no dispute regarding the
facts, circumstances, and sequence of events in the present case.
20. The first issue that requires consideration is whether the
order of the Court in Income-tax Appeal No. 2381 of 2018 dated 27 th
March 2025 contains any "...finding or direction..." which is required
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to be given effect to. The Constitution Bench of the Hon'ble Supreme
Court in the case of Income Tax Officer V/S Murlidhar
Bhagwan Das [(1964) 52 ITR 335 (SC)],while interpreting the
expression 'finding' in the parimateria provision under the 1922 Act,
has held that a finding is, therefore, a decision on an issue framed in a
suit and a finding shall be one which by its own force, or in
combination with findings on other issues, should lead to the decision
of the suit itself. It was observed that such a finding must be necessary
for passing the final order or giving the final decision in the appeal.
Similarly, the expression "direction" as used in the provision was
interpreted, and the Court observed that the expression "direction"
cannot be construed in vacuum, but must be collated to the directions
which the Appellate Assistant Commissioner or other Tribunals can
issue, under the powers conferred on him or them under the
respective Sections. It was observed that therefore the expression
"finding" and the expression "direction" to mean, a "finding" that is
necessary for giving relief in respect of the assessment of the year in
question, and a "direction" is a direction which the appellate or
revisional authority, as the case may be, is empowered to give under
the provisions.
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21. In Rajinder Nath (supra) the expressions "finding" and
"direction" fell for consideration of the Hon'ble Supreme Court as
used in the provisions of Section 153(3)(ii) of the Act. The question
before the Court was whether there was any finding or direction
within the meaning of Section 153(3)(ii) of the Act in the order passed
by the Appellate Assistant Commissioner, in consequence of which, or
to give effect to, the assessments in question could be made within the
extended period of limitation. The Hon'ble Supreme Court held that
in order to fall within the ambit of the phrase, "finding" given in an
appeal, revision or reference arising out of an assessment must be a
finding necessary for the disposal of the particular case, that is to say,
in respect of the particular assessee and in relation to the particular
assessment year. As regards the expression "direction" in Section
153(3)(ii) of the Act, it was observed that it was well settled that it
must be an express direction necessary for the disposal of the case
before the authority or Court. It must also be a direction which the
authority or Court is empowered to give while deciding the case
before it. It was held that the meaning of the expressions "finding"
and "direction" in Section 153(3)(ii) of the Act must be so confined,
and more particularly so, considering the fact that Section 153(3)(ii) is
not a provision enlarging the jurisdiction of the authority or Court. It
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was a provision which merely raises the bar of limitation for making
an assessment order under Section 143 or Section 144 or Section 147.
22. After extensively considering the decisions of the
Supreme Court abovementioned, a division bench of the Bombay
High Court in Wavy Construction LLP (supra) reiterated this well
settled position in law.
23. Applying these principles to the facts of the present case,
we are of the opinion that the order of this Court dated 27 th March
2025 cannot be said to contain any "direction" within the meaning of
the word since the Court merely clarified that the revenue authorities
were not precluded from initiating fresh proceedings against
the transferee company (Petitioner) in accordance with law.The
emphasised words clearly rule out any question of a "direction" being
issued by the Court. This is also accepted by the Respondents. As to
whether the said order contained any "finding" within the meaning of
the word, we are of the view that in the first place there is no finding
at all. The Court has merely recorded what it felt was the consequence
and effect of the submission made by the Petitioner which had been
accepted by the Court. Clearly an effect or consequence can only arise
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after the submission has been accepted by the Court. Ex facie this can
never be a finding necessary to decide the appeal before the Court. To
put it differently, in order to decide the appeal before it, the Court
merely applied the principle laid down in Maruti Suzuki's case
(supra) and held that no assessment could be made on a non-existing
company. No consideration of the assessment in the hands of the
Petitioner was necessary to decide and finally dispose of the appeal.
Therefore, even assuming that a finding exists it is clearly not a
"finding" necessary to dispose of the appeal before the Court.
Accordingly, there is no question of the provisions of Section 153(6)
being attracted in the facts of the present case.
24. For all the reasons set out above, we are of the view that
the order of this Court in Income-tax Appeal No.2381 of 2018 dated
27th March 2025 does not contain any "finding" or "direction" as
contemplated by the provisions of Section 153(6) of the Act and
consequently no order of assessment could be passed in the case of
the Petitioner for the A.Y.2007-08 in view of the bar of limitation in
Section 153(1) of the Act.
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25. Moreover, neither the order in Reliance Industries Ltd.
(supra) passed by this Court, nor the Department's reliance on the
decision in Rajinder Nath (supra), advances the Department's case.
They do not lend support to the proposition urged by the Revenue in
the facts of the present case.
26. In view of what has been set out above, it is not necessary
for us to go into the various other grounds raised in the Petition or
contentions urged by Mr. Mistri, which are expressly left open for
consideration should the need so arise in this or some other
appropriate case.
27. In view of the foregoing discussion, the petition needs to
succeed. It is accordingly allowed in terms of prayer clause (a), which
reads as follows:-
"(a) issue a writ of and/or order and/or directions in the nature of
certiorari or any other appropriate writ, order or direction to
quash and set aside the impugned notice dated 17 July 2025
issued under Section 143(2) of the Act (Exhibit-H), notice dated
26August 2025 issued under Section 142(1) of the Act (Exhibit-J)
and the consequent proceedings thereof for AY 2007-08;"
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28. Rule is made absolute in the aforesaid terms, and the Writ
Petition is also disposed of in terms thereof. However, there shall be
no order as to costs.
29. This order will be digitally signed by the Private Secretary/
Personal Assistant of this Court. All concerned will act on production by
fax or email of a digitally signed copy of this order.
[AMIT S. JAMSANDEKAR, J.] [B. P. COLABAWALLA, J.]
NOVEMBER 17, 2025
Utkarsh
