Gujarat High Court
Vital Connections Llp vs The National Faceless Assessment ... on 4 April, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/7622/2022 JUDGMENT DATED: 04/04/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7622 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 7625 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
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Approved for Reporting Yes No
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VITAL CONNECTIONS LLP
Versus
THE NATIONAL FACELESS ASSESSMENT CENTRE & ORS.
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Appearance:
MR. TUSHAR HEMANI, SR.ADVOCATE WITH MS VAIBHAVI K PARIKH,
ADVOCATE WITH MS. RESHAM THAKKAR, ADVOCATE (3238) for the
Petitioner(s) No. 1
MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1,2,3
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 04/04/2025
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE D.N.RAY)
1. Heard learned Senior advocate Mr.Tushar Hemani with
learned advocate Ms. Vaibhavi K. Parikh with learned advocate Ms.
Resham Thakkar appearing on behalf of the Petitioner and learned
Senior Standing Counsel Mr. Varun K. Patel for the Respondents.
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C/SCA/7622/2022 JUDGMENT DATED: 04/04/2025
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2. Rule returnable forthwith. Learned Senior Standing Counsel
Mr.Varun Patel waives service of the notice of the rule on behalf of
the Respondents. With the consent of the learned advocates for the
respective parties, the matter is taken up for hearing, as the issue
involved is very short.
3. As the issues arising in these petitions are common they are
heard together and disposed of by this common Judgment.
4. Special Civil Application No.7622 of 2022 pertains to
Assessment Year 2016-17, whereas, Special Civil Application
No.7625 of 2022 pertains to Assessment Year 2013-14. For the sake
of convenience, Special Civil Application No. 7622 of 2022 is being
taken up as the lead matter.
5. The brief facts of the case are as follows:
5.1 The Petitioner is a Limited Liability Partnership (LLP). One
Kauvery Trexim Private Limited (the Assessee) stood amalgamated
with Vital Connections Private Limited pursuant to an order dated
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C/SCA/7622/2022 JUDGMENT DATED: 04/04/2025
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15.12.2017 passed by the Ld. National Company Law Tribunal
(NCLT). Subsequently, Vital Connections Private Limited was
converted into a Limited Liability Partnership under the name Vital
Connections LLP (the petitioner herein) with effect from
13.03.2018.
5.2 The Respondent issued a notice dated 31.03.2021 under
Section 148 of the Income-tax Act, 1961 ("the Act") in the name of
the Assessee. In response, the Petitioner submitted objections to the
initiation of the reassessment proceedings vide communication dated
22.07.2021, specifically bringing to the Respondent's attention the
factum of merger of the Assessee with the Petitioner. It was
contended that the reassessment proceedings were void ab initio, as
the notice was issued in the name of a non-existent entity, and
accordingly, the Petitioner requested that the proceedings be
dropped.
5.3 Thereafter, vide notice dated 14.03.2022 issued under Section
142(1) of the Act, the Respondent called upon the Petitioner to
furnish certain information and documents. In reply, the Petitioner
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reiterated its request for disposal of the objections earlier raised vide
letter dated 22.07.2021.
5.4 The Respondent framed the assessment in the case of the
Petitioner for the Assessment Year in question vide order dated
30.03.2022, passed under Section 147 read with Section 144B of the
Income-tax Act, 1961, determining the total income at
₹81,65,00,000/-. Pursuant thereto, a demand of ₹48,72,39,740/-81,65,00,000/-. Pursuant thereto, a demand of ₹81,65,00,000/-. Pursuant thereto, a demand of ₹48,72,39,740/-48,72,39,740/-
came to be raised against the Petitioner.
5.5 The Petitioner submitted an online grievance, wherein it was
specifically contended that no "show cause notice" proposing
variation to the returned income had been served upon the Petitioner.
It was further alleged that the assessment proceedings had been
concluded and the order under Section 147 read with Section 144B
of the Act had been passed without issuance of the mandatory "show
cause notice" and "draft assessment order" as contemplated in law.
6 Aggrieved by the impugned Assessment Order and the
demand notice dated 30.03.2022, the Petitioner has filed the present
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Writ Petition under Article 226 of the Constitution of India, seeking
the following reliefs:
"(a) quash and set aside the impugned Assessment Order
dated 30.03.22 as well as the demand notice dated 30.03.22
for the Assessment Year 2016-17 at ANNEXURE "A
(Colly.)" to this petition;
(b) pending the admission, hearing and final disposal of this
petition, to stay the implementation and operation of the
impugned Assessment Order dated 30.03.22 as well as the
demand notice dated 30.03.22 for the Assessment Year
2016-17 at ANNEXURE "A (Colly.)" to this petition;
(c) any other and further relief deemed just and proper be
granted in the interest of justice:
(d) to provide for the cost of this petition."
7. Learned Senior Advocate Mr.Tushar Hemani instructed by
Ms. Vaibhavi K. Parikh, learned advocate and Ms. Resham Thakker,
learned advocate appearing for the Petitioner have respectively made
submissions at different points of time. Mr. Hemani, learned Sr.
advocate mainly submitted that the factum of merger of the
Assessee with the Petitioner was categorically brought to the notice
of the Respondent-Authorities. Therefore, the reopening notice was
issued in the name of non-existent entity. Consequently, the
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assessment proceedings were needed to be dropped.
8. Per contra, learned Senior Standing Counsel Mr. Varun Patel
appearing on behalf of the Respondent-Department by placing
reliance on the affidavit-in-reply filed by the Respondent No.2
submitted that there is nothing on record to show that the Petitioner
had intimated the merger approval order of the learned NCLT,
Ahmedabad to the concerned Jurisdictional Assessing Officer, prior
to the issuance of notice under Section 148 of the Act. Accordingly,
Mr. Patel submitted that the present petition deserves to be rejected
on such ground alone.
9. From the perusal of the records, it will be seen that in response
to the notice under Section 148 of the Act dated 31.03.2021,
addressed to the Assessee in question namely Kauvery Trexim Pvt.
Ltd., the Petitioner had responded on 22.07.2021 (uploaded on
23.07.2021) stating the factum of amalgamation and specifically
uploading the certified copy of the Scheme of Amalgamation Order
passed by the learned NCLT and other annexures subsequently. On
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17.03.2022, further response was submitted to notice under Section
142(1) of the Act, dated 14.03.2022, reiterating the position.
Therefore, in such circumstances, the Respondents could not have
assumed the jurisdiction to issue a notice in the name of a non-
existent entity. Following the ratio in the case of PCIT Vs. Maruti
Suzuki India Ltd. reported (2019) 416 ITR 613 (SC), the
Assessment Order dated 30.03.2022 and the consequent notice of
demand under Section 156 of the Income Tax Act, 1961 deserves to
be and are hereby quashed and set aside.
10. Accordingly, the impugned Assessment Order dated
30.03.2022 as well as the demand notice of even date are hereby
quashed and set aside. It will be open for the Department to issue
fresh notice to the Assessee, if statutorily permitted. The petitions
succeed and are accordingly allowed. Rule is made absolute to the
aforesaid extent. No order as to costs.
(BHARGAV D. KARIA, J)
(D.N.RAY,J)
BINA SHAH
