Gujarat High Court
Vital Connections Llp vs The National Faceless Assessment ... on 7 April, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/7617/2022 JUDGMENT DATED: 07/04/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7617 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
WITH MS. RESHAM THAKKAR (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 : 07/04/2025
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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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. The brief facts of the case are as follows:
3.1 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
15.12.2017 passed by the learned 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) with effect from 13.03.2018.
3.2 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
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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 for the proceedings be dropped.
3.3 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
reiterated its request for disposal of the objections earlier raised vide
letter dated 22.07.2021.
3.4 On 28.03.2022, the Respondent issued a show cause notice
along with a draft assessment order, calling upon the Petitioner to
show cause as to why the proposed variations ought not to be made
and why the assessment should not be completed in terms thereof.
The Petitioner was directed to submit its response by 29.03.2022.
3.5 The Petitioner, vide letter dated 29.03.2022, submitted a
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partial response wherein it again requested the Respondent to
dispose of the objections raised against the reopening of assessment.
On the same date, i.e., 29.03.2022, the Petitioner also submitted
detailed written submissions on the merits of the case and further
requested for a hearing through video conferencing.
3.6 However, without disposing of the objections or granting a
hearing, the Respondent proceeded to pass the assessment order
dated 30.03.2022 under Section 147 read with Section 144B of the
Act, determining the total income of the Petitioner at
₹16,14,60,400/-. Consequently, a substantial demand of16,14,60,400/-. Consequently, a substantial demand of
₹16,14,60,400/-. Consequently, a substantial demand of8,28,41,280/- was raised against the Petitioner for the Assessment
Year 2015-16.
3.7 Aggrieved by the impugned Assessment Order and the
demand notice dated 30.03.2022, the Petitioner has filed the present
Writ Petition under Article 226 of the Constitution of India, seeking
the following reliefs:
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"(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 2015-16 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
2015-16 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."
4. 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 Senior
Advocate 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 assessment
proceedings were needed to be dropped.
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5. 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.
6. From the perusal of the records, it will be seen that in response
to the notice cum draft Assessment Order dated 28.03.2022 under
Section 147 read with Section 144B of the Act, addressed to the
Assessee in question namely Kauvery Trexim Pvt. Ltd., the
Petitioner had responded on 29.03.2022 (uploaded on the same day),
stating the factum of amalgamation and specifically uploading the
certified copy of the Scheme of Amalgamation Order passed by the
NCLT and other annexures. Additionally, on 29.03.2022,
further detailed submissions on facts and law including a detailed
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reply on merits was uploaded along with copies of several decisions
of the Hon'ble Supreme Court, etc. The Petitioner also sought a
video conference reserving its right to make further submissions.
Therefore, in such circumstances the Respondent could not have
assumed the jurisdiction to issue a notice in the name of a non-
existent entity. Following the ratio laid down 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.
7. 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 petition
succeeds and is 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
