Sunteck Realty Ltd vs Deputy Commissioner Of Income Tax, ...
2026 Latest Caselaw 1350 Bom

Bombay High Court

Sunteck Realty Ltd vs Deputy Commissioner Of Income Tax, ... on 6 February, 2026

Author: B. P. Colabawalla

Bench: B. P. Colabawalla

  2026:BHC-OS:4031


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       Digitally                     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
       signed by
       TRUSHA
TRUSHA TUSHAR                             ORDINARY ORIGINAL CIVIL JURISDICTION
TUSHAR MOHITE
MOHITE Date:
       2026.02.12
       13:03:27
       +0530
                                                WRIT PETITION (L) NO.4707 OF 2025


                    Sunteck Realty Ltd.                                                 .. Petitioner

                              Versus

                    Deputy Commissioner of Income Tax,
                    Central Circle 3(4), Mumbai & Ors.                                  .. Respondents

                         Mr. Sham V. Walve a/w Mr.Abhishek Khandelwal a/w Mr.Bhavik
                         Chheda, Advocate for the Petitioner.

                         Mr.N.C.Ranganayakulu, Advocate for the Respondents.

                                            CORAM:             B. P. COLABAWALLA &
                                                               FIRDOSH P. POONIWALLA, JJ.

                                             DATE:             FEBRUARY 6, 2026

                    P. C.

1. Rule. Respondents waive service. With the consent of parties,

Rule made returnable forthwith and heard finally.

2. The above Writ Petition has been filed challenging the Order

dated 31st August 2024 passed under Section 148A(d) of the Income Tax Act,

1961 (for short 'I.T. Act'), and the Notice dated 31st August 2024 issued under

Section 148 thereof on the ground that the Impugned Notice was issued to a

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non - existent entity and it is therefore invalid. The Assessment Year in

question is Assessment Year 2018-19.

3. The present Petitioner is a successor to the erstwhile entity

named Starlight Systems (I) LLP (hereinafter referred to as 'Starlight LLP') .

The brief facts of the case are that Starlight LLP filed its return of income for

A.Y. 2018 - 19 which was processed under Section 143(1) of the I.T. Act.

Thereafter, Starlight LLP's case was selected for scrutiny relating to A.Y. 2018

- 19 and an Assessment Order dated 27 th September 2021 came to be passed

under Section 143(3) read with section 144B of the I.T. Act making certain

additions. Subsequently, there was a re-assessment initiated for A.Y. 2018 -

19 under Section 148 of the I.T. Act in the name of Starlight LLP. However,

while the re-assessment proceedings were ongoing, Starlight LLP was

converted into a Private Limited Company (incorporated on 29 th April 2022)

and a fresh Incorporation Certificate was issued to that effect in the name of

'Starlight Systems (I) Pvt. Ltd.' Subsequent thereto, a Company Petition was

filed in the NCLT for amalgamation of Starlight Systems (I) Pvt. Ltd. into the

Petitioner - Company. In pursuance thereof, the Petitioner claims that it

informed the respective Jurisdictional Officers about the proposed scheme of

amalgamation and called upon them to file their representations before the

NCLT.

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4. In the meantime, the re-assessment proceedings in relation to

Starlight LLP culminated into an Assessment Order dated 31 st March 2024

passed under Section 147 read with section 144B of the I.T. Act making

additions in the hands of Starlight LLP. This is not under challenge in the

present Writ Petition. Thereafter, the NCLT vide an Order dated 29th July

2024 approved the scheme of amalgamation between Starlight Systems (I)

Pvt. Ltd. (amalgamating company) and the Petitioner (amalgamated

company). Immediately thereafter, the Petitioner claims that it informed the

Department about the approval of the amalgamation scheme by raising a

request on the Income Tax Portal, which was accepted by the Department on

31st July 2024.

5. Despite this being the position, the Petitioner states that the

Department issued yet another Show Cause Notice dated 17 th August 2024,

under Section 148A(b) of the I.T. Act, for the A.Y. 2018 - 19, in the name of

Starlight LLP seeking to re-open their case. The Petitioner, on behalf of

Starlight LLP, filed a response on 26th August 2024 challenging the re-

assessment on merits. Consequently, the Impugned Order dated 31 st August

2024 came to be passed under Section 148A(d), concluding that income

chargeable to tax had escaped assessment in the case of Starlight LLP. The

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Impugned Notice dated 31st August 2024 was also issued in the name of

Starlight LLP.

6. At the outset, Mr. Walve, the learned Counsel appearing on

behalf of the Petitioner, states that, by way of this Writ Petition, the

Petitioner is only challenging the Order dated 31 st August 2024 passed under

Section 148A(d) of the I.T. Act and the Notice dated 31 st August 2024 issued

under Section 148, for A.Y. 2018 - 19. The primary ground of challenge is

that the Impugned Notice issued under Section 148 is invalid as it has been

issued to a non - existent entity. He submits that the issue raised in this Writ

Petition is squarely covered by the decision of the Hon'ble Supreme Court in

Principal Commissioner of Income Tax, New Delhi vs. Maruti Suzuki India

Ltd. [2019] 107 taxmann.com 375 (SC) . He also relies on a recent judgment of

this Court in J M Mhatre Infra (P.) Ltd. vs. Union of India [2026] 182

taxmann.com 275 (Bombay) which re-iterates the said legal position.

7. Per contra, Mr. Ranganayakulu, the learned counsel for the

Revenue, states that an Affidavit-in-Reply has been filed on behalf of the

Department in July 2025. He submits that in response to the Impugned

Show Cause Notice under Section 148A(b), the Petitioner did not bring out

the facts relating to any amalgamation of the erstwhile entity. In fact, the

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authorised representative who has signed on the said response has

mentioned 'Starlight Systems (I) LLP (now merged with Sunteck Realty

Ltd.)'. Accordingly, he submits that if Starlight LLP was a non - existent

entity, then its name should not have been mentioned in the response to the

Show Cause Notice issued under Section 148A(b) of the I.T. Act. He further

relies on a judgment of the Hon'ble Delhi High Court in Sky Light Hospitality

LLP vs. Assistant Commissioner of Income Tax, Circle 28(1), New Delhi

[2018] 90 taxmann.com 413 (Delhi) to submit that in any case, such an

irregularity in the Impugned Notice would be a curable defect under Section

292B of the I.T. Act as opposed to a jurisdictional defect. He further drew our

attention to the fact that an SLP was filed against this judgment in Sky Light

(supra) and the same came to be dismissed by the Hon'ble Supreme Court in

Sky Light Hospitality LLP vs. Assistant Commissioner of Income-tax [2018]

92 taxmann.com 93 (SC). Accordingly, he submitted that the Impugned

Notice is sustainable in the eyes of law and thus, the Writ Petition need not

be entertained.

8. To counter this, Mr. Walve submitted that in response to the

Show Cause Notice issued under Section 148A(b), the mention of wordings

'now merged with Sunteck Realty Ltd.' would itself constitute sufficient

intimation to the Assessing Officer, and merely countering the Show Cause

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Notice on merits would not take away the Petitioner's right to challenge the

Impugned Notice on jurisdictional grounds, once the issue on the legality of

such notice is well settled. He pointed out that the Impugned Order itself

records the name as 'Starlight Systems (I) LLP (now merged with Sunteck

Realty Ltd.)'. He also submitted that the Department was informed about the

amalgamation scheme prior to initiation of the re-assessment. He further

submitted that the facts in Sky Light (supra) were peculiar in nature and

cannot be applied to the facts of this case. He drew our attention to another

judgment of this Court in City Corporation Ltd. vs. Assistant Commissioner

of Income-tax [2025] 171 taxmann.com 301 (Bombay) wherein the decision

of the Hon'ble Delhi High Court in Sky Light (supra) has been distinguished.

Accordingly, he submitted that the Impugned Order and Notice deserve to be

set aside on this ground itself.

9. We have heard the learned Counsel appearing on behalf of the

parties, and have considered the rival submissions. The only challenge before

us is to the Impugned Order passed under Section 148A(d) of the I.T. Act and

the Impugned Notice issued under Section 148 thereof. The only issue before

us is whether the same could have been passed/issued in the name of a non -

existent entity. It is not in dispute that the erstwhile entity i.e. Starlight

Systems (I) LLP was converted into a Private Limited Company [Starlight

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Systems(I) Pvt. Ltd.], which in turn, merged into the Petitioner Company

vide NCLT's Order dated 29th July 2024 (Exhibit 'L'). It is also not in dispute

that the Petitioner had intimated the Income Tax Department about the

amalgamation scheme prior to approval of the same. Even after approval of

the scheme, the Petitioner had taken steps and made a request on the Income

Tax Portal to that effect and the same was approved. Therefore, it is not a

case where the Income Tax Department was not aware about the

amalgamation of the entity. Thus, we find force in the submissions advanced

on behalf of the Petitioner that the Impugned Notice dated 31 st August 2024,

under Section 148 of the I.T. Act, issued in the name of the erstwhile entity

viz. Starlight Systems (I) LLP (Exhibit 'P-1') [for A.Y. 2018 - 19] cannot

stand. This has now been consistently held not only by the Hon'ble Supreme

Court in the case of Pr. CIT v. Maruti Suzuki India Ltd. [2019] 107

taxmann.com 375 (SC), but several other decisions of this Court. The reliance

placed by the Revenue on Sky Light (supra) is misconceived as the facts of

that case were peculiar in nature. This has also been observed by the Hon'ble

Supreme Court while dismissing the SLP in the said case. Moreover, this

Court in City Corporation (supra) has already distinguished the said

judgment in the following Paragraphs:

"25. Mr Suresh Kumar's contention about the facts in the present case being akin to those in Skylight Hospitality LLP

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(supra) cannot be accepted. Except for submitting that the facts are similar or comparable, nothing was shown to us based upon which such a submission could be entertained, much less sustained. In any event, the Hon'ble Supreme Court, in the case of Maruti Suzuki (supra), considered the Delhi High Court's decision in Skylight Hospitality LLP (supra) and held that the same was delivered "in the peculiar facts of the case". In fact, even the Delhi High Court had clarified that the decision was in the case's peculiar facts.

26. In that case, there was substantial and affirmative material and evidence on record to show that issuing the notice in the name of the dissolved company was only a mistake. The Court held that the Special Leave Petition filed by the Skylight Hospitality LLP (supra) against the judgment of the Delhi High Court rejecting its challenge was dismissed in the peculiar facts of the case, which weighed with the Court in concluding that there was merely a clerical mistake within meaning of Section 292B. The Hon'ble Supreme Court held that in Maruti Suzuki (supra) the notice under Section 143(2) under which jurisdiction was assumed by the assessing officer, was issued to a non- existent company. The assessment order was issued against the amalgamating company. "This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B".

27. The argument now sought to be raised by Mr Suresh Kumar based on Skylight Hospitality LLP (supra) was considered and rejected by the Gujarat High Court in Anokhi Realty (P.) Ltd. v. Income-tax Officer [2023] 153 taxmann.com 275/295 Taxman 60 (Gujarat). In Adani Wilmar Ltd. v. Assistant Commissioner of Income-tax [2023] 150 taxmann.com 178/292 Taxman 592/456 ITR 551 (Gujarat), another Division Bench of the Gujarat High Court rejected the Revenue's argument based on lack of inter- departmental coordination or non-application of mind when materials relating to amalgamation were already available with the department. The Court held that based upon such grounds, notices could not have been issued to a non-existent company.

28. The Delhi High Court, in the case of Principal Commissioner of Income Tax -7, Delhi v. Vedanta Limited ITA No. 88 of 2022 decided on 17 January 2025 / [2025] 170 taxmann.com 833 (Delhi) rejected a contention very similar to that raised by Mr Suresh Kumar, relying on Skylight Hospitality LLP (supra). The Delhi High Court noted that the decision of

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the Supreme Court in Maruti Suzuki (supra), while enunciating the legal position concerning an order being framed in the name of a non-existent entity, had unequivocally held as being a fatal flaw which could neither be corrected nor rectified. It had held explicitly that such an order cannot be salvaged by taking recourse to Section 292B of the IT Act. The Court also noticed the peculiar facts obtained in Skylight Hospitality LLP (supra), which alone had led to the Supreme Court upholding the assessment made, albeit in the name of an entity that had ceased to exist."

10. In view of the above discussion, we hereby quash and set aside

the Impugned Order dated 31st August 2024 passed under Section 148A(d) of

the I.T. Act (Exhibit 'P') as well as the Impugned Notice dated 31 st August

2024 issued under Section 148 thereof (Exhibit 'P-1') for A.Y. 2018 - 19 and

all consequential orders / notices emanating therefrom.

11. Rule is made absolute in the above terms and the Writ Petition

is also disposed of in terms thereof. No orders as to costs.

12. 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.

[FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.]

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