Gujarat High Court
Rasna Private Limited vs Deputy Commissioner Of Income Tax ... on 15 October, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
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C/SCA/7255/2024 JUDGMENT DATED: 15/10/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7255 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
No
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RASNA PRIVATE LIMITED
Versus
DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1)(1) AHMEDABAD
& ANR.
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Appearance:
MR B S SOPARKAR(6851) for the Petitioner(s) No. 1
MS MAITHILI D MEHTA(3206) for the Respondent(s) No. 1
NOTICE SERVED for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 15/10/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr.B.S.Soparkar for
the petitioner and learned Senior Standing
Counsel Ms.Maithili D. Mehta for the
respondents.
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2. Rule, returnable forthwith. Learned Senior
Standing Counsel Ms.Maithili Mehta waives
service of notice of rule for and on behalf of
the respondents.
3. In compliance of the order dated 1st
September, 2025, learned Senior Standing
Counsel Ms.Maithili Mehta has placed on record
the affidavit-in-replies filed by the Director
General of Income Tax (Systems), Delhi and
DGIT (Systems) Bengaluru on behalf of the
respondent No.2. The same are ordered to be
taken on record.
4.1. This Court passed the following order on
1st May, 2024 :
"1. Heard learned advocate Mr.B.S.
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Soparkar for the petitioner.
2. It was submitted that the respondent
has issued notice under Section 148 on
the basis of the order passed under
Section 148A(d) of the Income Tax Act,
1961 on the basis of information made
available with the department that the
petitioner having old PAN No.AABCR5577P
which has been amalgamated with Waves
Foods Private Limited having PAN
No.AAACW4408M by the order of this
Court dated 01st September, 2009, which
was later on renamed as Rasna Private
Limited PAN No.AAACW4408M has entered
into the transactions in the old PAN
number though the company is
amalgamated.
2.1 It was submitted that the
petitioner has explained in detail that
there is no transaction in the old PAN
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number and all the transactions which
are referred to on the basis of the
information available with the
department through computer system are
reflected in the books of accounts of
the petitioner having new PAN
No.AAACW4408M.
2.2 Learned advocate Mr.Soparkar
invited our attention that for the A.Y.
2016-17 also the notice was issued
under Section 148A(b) and considering
the reply filed by the petitioner that
the petitioner has disclosed all the
transactions in the new PAN
No.AAACW4408M, the Assessing Officer
did not find that it is a fit case for
issuance of notice under Section 148 of
the Act and dropped the proceeding by
passing order under Section 148A(d) of
the Act.
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2.3 Learned advocate also referred to
the closure of the grievance raised by
the petitioner to close old PAN
No.AABCR5577P as the said PAN number
has become deactivated on amalgamation
of the erstwhile Rassna Private Limited
with Waves Foods Private Limited and
which has now been renamed as Rasna
Private Limited and it has been pointed
out that the grievance is resolved as
under.
"As per our ITBA system Company M/s.
RASNA PVT. LTD. having PAN:
AABCR5577P has been merged with of
M/s. RASNA PVT. LTD. (Old Name -
WAVES FOODS PVT. LTD.) having PAN:
AAACW4408M. (Screen shot attached)"
2.4 It was, therefore, submitted that
inspite of such resolution of the
matter, the respondent is issuing
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notice every year for the transactions
on the wrong information supplied by
the software that the transactions are
carried out in the old PAN number
though no transaction is carried out.
3. Considering the above submissions,
let the head of the computer system of
the Income Tax Department i.e. DGITC
(Systems), Ground Floor, ARA Centre, E-
2, Jhandewalan Extension, New Delhi-
1100055 having email id
[email protected] be joined
as party respondent No.2.
4. Issue Notice to the respondents to
file affidavit-in-reply in detail, as
to why repeated notices are issued
under Section 148 of the Act on the
basis of the information which is not
correct as per the record available
with the department so as to cause
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harassment to the citizens of this
country, returnable on 11th June, 2024.
Direct service, through email, is
permitted."
4.2. As the aforesaid order was not complied
with due to incomplete Email address having
been provided by the learned counsel for the
Department, following order was passed on 26th
August, 2025:
"Inspite of order passed by this Court
on 1st May, 2024 requesting the
respondent no.2 -DGITC (Systems) having
Email-ID [email protected]
to file affidavit-in-reply in detail to
explain why repeated notices are issued
under section 148 of the Act on the
basis of information which is not
correct as per the record available with
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the department, till date no compliance
is made to the order dated 1st May, 2024
even though the notice was served on
21st May, 2024 as per affidavit of
service filed by the petitioner.
Therefore, respondent no.2 is ordered to
remain present before this Court in
person or through virtual mode for
compliance of order dated 1st May, 2024,
failing which, the Court shall be
compelled to pass necessary order under
the provisions of Contempt of Courts
Act,1971. It is also pertinent to note
that this matter is already listed for
10 times.
Stand over to 1st September, 2025.
Direct service today through email is
permitted.
To be listed on top of the Board."
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4.3. In compliance of the order dated 26th
August, 2025, the respondent No.2 remained
present through video conference on 1st
September, 2025 and following order was
passed:
"In compliance of our order dated
26.08.2025, learned Senior Standing
Counsel Ms. Maithili Mehta for the
respondents has filed affidavit-in-
reply on behalf of the respondent no. 2
stating that the E-mail address stated
in the order dated 01.05.2024 was not
correct and therefore the said order
was not complied with by the respondent
no. 2.
Moreover, Mr. Manu Malik DGIT (s) Delhi
and Mr. Sanjay Kumar, DGIT, System
Bengaluru are present through video
conference and they have been heard. It
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is also made known to both the officers
of respondent no. 2 - Mr. Manu Malik
DGIT (System) Delhi and Mr. Sanjay
Kumar, DGIT, (System) Bengaluru to
revert back with appropriate action
which may be taken to resolve the
issues of use of multiple PAN of the
amalgamated merged companies and
initiation of the proceedings by the
respondent Income Tax Department before
the next date of hearing.
Stand over to 09.09.2025.
To be listed at 02:30 pm in a separate
Board."
4.4. In the affidavit-in-reply filed by
Director General of Income Tax (Systems),
Delhi, following averments are made :
"2. I state that in the existing case
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selection procedures for Non-Filers,
the business and investment
transactions reported against a
particular PAN by third parties are
considered before fagging a case to
Jurisdictional Assessing Officer. The
status of PAN is not factored into the
framing and execution of rules. As
highlighted in the present petition,
this omission can lead to instances of
selection of cases based on reporting
of transactions on earlier/deactivated
PANs.
3. I state that the data on amalgamated
or merged companies is not directly
available with the Directorate of
Systems. Under the current framework,
companies or other entities with change
in organization can intimate the
Jurisdictional Assessing Officer (JAO)
for event marking for a PAN in the PAN
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Module in ITBA. For example, in respect
of event marking for Amalgamation, JAOs
can enter Source PANs (PAN/s of the
predecessor entities (amalgamating
companies) and Linked PANS (PAN of the
Successor entity (amalgamated company).
Henceforth, it is proposed that the
data available with the Income Tax
Department (ITD) in respect of flagging
and marking of such events against a
particular PAN will be shared with the
Risk Assessment team and be used in the
case selection process.
4. Hence, in all cases involving PANs
where the JAO has recorded an event
such as Amalgamation, Acquisition,
Merger, Conversion of Proprietorship
into Company, Conversion of Firm into
LLP, Conversion of Firm/LLP into
Company, or Conversion of Company into
LLP-i.e., cases where a successor PAN
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exists, the transactions recorded
against the original PAN/PANs will be
consolidated against the successor PAN.
This will require some system
development, mapping and integration on
multiple platforms a databases. The
requirement for his development has
been raised with the Managed Service
Provider of the project. A formal time
frame is yet to be communicated.
However, considering that the project
is in its last phase with all systems &
components in stage of late maturity,
this development may take some time.
5. As an interim measure, while framing
the case selection rules for Non-
Filers, a separate list of PANs where
such events have been marked and
returns are being filed on the
successor PAN, will be generated. The
PANs in this list will be excluded from
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selection under the Non-Filer
Management System."
4.5. In the affidavit-in-reply filed by the
DGIT (Systems) Bengaluru, procedure formulated
by Systems Directorate for issuing notices in
cases of Amalgamation/De-Merger of Companies
and in cases where notices are issued to the
Legal Heirs through ITBA module has been
explained through detailed procured annexed at
Annexure-A to the affidavit-in-reply, which
reads as under :
"Annexure - A
Steps taken by Systems Directorate to
prevent issue of notices to deactivated
PANs, dead persons or non-existent
entities
In order to prevent instances of
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notices being issued in the name of a
deadlivated PAN, deceased assessee or a
non-existent entity in cases of
amalgamation/merger/demerger etc., the
Systems Directorate has enabled a
functionality in ITBA for automatic
updation of the addressee's name in the
statutory communications based on Event
Marking and Legal Heir Addition done by
the Jurisdictional Assessing Officers.
(A) Event marking in ITBA and updating
of name in ITBA communications
1. Following is the overview of the
steps to be followed by Jurisdictional/
Central/ International Taxation AOs for
Event Marking for a PAN in PAN Module
in ITBA:
Login to ITBA >> PAN Module >> Menu
>> Event Marking for PAN(s) >> Mark
Event >> Select the 'Event Name' >> AO
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user has to enter the Source PAN/s and
Linked PAN/s >> Enter Remarks, if any >>
Click on 'Mark Event'.
The detailed steps along with all
screenshots are already provided in the
User Manual of PAN Module, which is
available in 'ITBA Help Guide' section
on ITBA Home Page.
2. In case of Amalgamation, Source
PAN/s are the PAN/s of the predecessor
entities (amalgamating companies), and
Linked PAN is the PAN of the Successor
entity (amalgamated company).
Jurisdictional Assessing Officers (JAO)
have been advised to correctly enter
Source and Linked PANs in the User
Manual of PAN Module available in 'ITBA
Help Guide' section on ITBA Home Page.
3. Once event of Amalgamation (or other
events, as per Table below) is marked
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on the Predecessor PANs in the above
way, then any communications generated
in ITBA in any proceedings on a
Predecessor entity's PAN (also called
old PAN/s) will automatically start
carrying the Successor's name in the
addressee field in place of the
Predecessor's name.
Thus, for example, if a 142(1) notice
is being generated by Faceless
Assessment Unit while working in the
assessment work-item on a predecessor
entity's PAN, the name that will start
getting printed automatically on top of
the 142(1) Notice (i.e., in the Name of
Assessee/Addressee field) will be the
name of the Successor entity (whose PAN
was mentioned as Linked PAN while doing
event marking of Amalgamation by the
JAO). This takes care of the aspect of
addressing communications in the name
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of Successor entity after amalgamation
(even if the communication is meant for
the erstwhile Predecessor entity), as
mandated by various judicial
pronouncements.
4. It may be noted that only the JAOs
can do event marking in PAN module, and
not Faceless Assessment Units/Faceless
Assessment Officers (FAU/FAO). The FAOS
can communicate to JAO by way of using
"Issue Letter" and ask JAO to do event
marking. Further, JAOs have been advised
to undertake Event Marking as soon as
they come to know of any scheme of
Amalgamation (or any other such events,
as per below Table) for any entity in
their charge.
5. In the case of Event 'Demerger'
where Linked PAN can be more than one,
JAO has been advised to select check
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box 'PAN to be used for Communication'
against one Linked PAN of which Name
will be used in future. In case Source
PAN and Linked PAN are same, then
Source PAN will be selected
automatically for 'PAN to be used for
Communication'.
6. Below table summarises the changes
that are made on marking of various
kinds of events in PAN Module:
Whether name is
Linked
No. Event Name Source PAN/s updated by event
PAN/s
marking
1 Amalgamation Multiple Single Yes
2 Acquisition Multiple Single Yes
3 Merger Multiple Single Yes
Name is not updated
by marking event of
Death in PAN
module.
4 Death Single None
Rather, if legal heir
is added in Common
Functions module,
then name is updated
4 Fake Assessee Single None No
5 Dissolution Single None No
6 Liquidation Single None No
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Partitioning of
8 Single Multiple Yes
HUF
9 Demerger Single Multiple Yes
Conversion of
10 Proprietorship to Single Single Yes
Company
Conversion of
11 Single Single Yes
Firm to LLP
Conversion of
12 Firm/LLP to Single Single Yes
Company
Conversion of
13 Company into Single Single Yes
LLP
(B) Legal Heir addition in ITBA and
updating of name in ITBA communications
1. The Legal Heir Details screen in
Common Functions module facilitates the
AOs to add Legal Heir in the system for
deceased assessees.
2. Jurisdictional/ Central/
International Taxation AOs can add
legal heir, and not FAUs. Following is
the overview of the steps to be
followed by AOs for adding Legal Heir
in ITBA
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ITBA Portal >> Common Functions >> Menu
>> Legal Heir Details >> Enter PAN of
the Deceased and tab out. Click on
Search >> In case legal heir details
are available in system, same will be
displayed. Else, user will be able to
proceed with adding a new Legal Heir
for the deceased PAN by clicking on Add
Legal Heir >> Enter Date of death >>
Enter Legal Heir PAN. Based on PAN,
Name and communication Address is
displayed on screen >> Select Relation
with Assessee >> Select Refund to be
released to legal heir (Yes or No) >> In
case where Refund to be released is
selected as Yes, the request will be
submitted to Range Head for approval of
legal heir addition request. If Refund
to be released is No, it will not be
submitted to Range Head for approval. >>
Click on Save button to save the details
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in the system >> AO can add any
supporting documents for the Legal Heir
request >> In case where Refund to be
released is Yes, User has to save Bank
Details for the Legal Heir request. In
case where Refund to be released is No,
Bank details are optional >> If the
request has to go to Range for
approval, Range User will be able to
Approve, Reject or Send Back the
request. In Range Head code, screen
will be displaved in View Only mode for
viewing the details for the Legal Heir
request >> Once Legal Heir request is
approved by Range Head, status of the
Legal Heir in Legal Heir screen as seen
by AO will be updated as Active.
3. The detailed steps along with all
screenshots are already provided in the
User Manual of Common Functions Module,
which is available in 'ITBA Help Guide'
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section on ITBA Home Page.
4. After completion of above process,
any communication issued in ITBA on the
PAN of the deceased will start carrying
(in the addressee name field) the name
of the Legal heir.
NOTE: It may be noted that by the
aforesaid Event marking or Legal heir
addition, only name gets updated; and
there is no impact on the PAN being
printed in the notices/communications.
Further, no additional texts such as
"As successor to ..." or "Legal heir of
..." etc. are added with the names.
Only the name of old entity/person gets
replaced by that of new entity/person
without any other qualifying texts
etc."
4.6. Adverting to the facts of the present
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case, M/s.Rasna Private Limited having PAN
No.AABCR5577P was merged with Waves Foods
Private Limited having PAN No.AAACW4408M in
the year 2009 and therefore, M/s.Rasna Private
Limited has ceased to exist from the date of
merger in the year 2009 by the High Court
order dated 20th August, 2009. Thereafter,
name of the Waves Foods Private Limited was
changed to Rasna Private Limited.
4.7. It is the case of the petitioner that an
application was made to deactivate the old PAN
being PAN No.AABCR5577P, however, no action
was taken by the Income Tax Department and
after several applications, grievance was
raised on Grievance Redressal portal on 24th
June, 2020 followed by another grievance
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raised on 19th June, 2021. The said grievance
was closed with the noting that as per ITBA
systems, company-Rasna Private Limited having
PAN No.AABCR5577P has been merged with the
company having PAN No.AAACW4408M.
4.8. The petitioner filed the return of income
for Assessment Year 2017-18 on 28.10.2017
offering total income of Rs.3,28,66,254/-. The
return of income was taken up for scrutiny and
Assessment Order dated 23.12.2019 was passed
under Section 143(3) of the Income Tax Act,
1961 (for short 'the Act') assessing the
income at Rs.3,64,99,201/-.
4.9. The petitioner thereafter received a
notice under Section 148A(b) of the Act in
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name of Rasna Private Limited showing PAN
No.AABCR5577P (which was already merged with
the PAN of AAACW4408M as stated on Grievance
Redressal Portal on 19th June, 2021) for the
Assessment Year 2016-17. The said notice was
issued on 21st February, 2024 on the ground
that no return of income is filed in the PAN
No.AABCR5577P for the transactions undertaken
by the entity namely Rasna Private Limited.
The petitioner replied that the entity namely
"Rasna Private Limited" having "PAN
AABCR5577P" is already merged with the
petitioner and the transactions are recorded
in the books of the petitioner and the return
of income is already filed which was assessed
under Section 143(3) of the Act. However, no
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order under Section 148A(d) of the Act was
passed dropping the said notice.
4.10. The petitioner was shocked and surprised
to receive another notice issued under Section
148A(b) of the Act on 30th March, 2024 by the
respondent for the Assessment Year 2017-18
asking the petitioner to explain whether the
transactions which were shown to be entered
into by the Rasna Private Limited having PAN
AABCR5577P has been offered for taxation by
the petitioner or not which was replied on
11.04.2024 providing all the details asked for
impressing upon the respondent that all the
transactions are properly accounted in the
books of the petitioner-Company and similar
notice was issued for Assessment Year 2016-17
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as well, after due examination of the
identical facts was closed.
4.11. Inspite of such reply given by the
petitioner, ignoring the contents thereof, the
respondent disposed of the objections filed by
the petitioner by the impugned order under
Section 148A(d) of the Act on arriving at a
prima-facie satisfaction that it is a fit case
to re-open the assessment for Assessment Year
2017-18 and issued notice dated 16.04.2024
under Section 148 of the Act.
4.12. In view of the above undisputed facts,
this Court passed the aforesaid orders and in
response, the affidavit-in-replies have been
filed by the Director General of Income Tax
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(Systems), Delhi and DGIT (Systems) Bengaluru
wherein, it is clearly accepted that there is
no linkage of PAN database with the existing
case selection procedure for Non-Filers, the
business and investment transactions reported
against a particular PAN by third parties are
only considered before fagging a case to the
Jurisdictional Officer and status of PAN is
not at all taken into consideration by the
system.
5. In view of such faulty system, which is now
being improved as stated in the affidavit-in-
replies, we have no option but to quash and
set aside the impugned order passed under
Section 148A(d) of the Act and the notice
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issued under Section 148 of the Act for the
Assessment Year 2017-18, as the same is based
upon the PAN No.AABCR5577P which is not in
existence since 2009 and it is astonishing
that the system is unable to record the
deactivated PAN so as to not to harass the
assessees by issuing the frivolous notices on
the deactivated PAN Numbers.
6. It is also shocking that inspite of filing
reply by the petitioner-assessee intimating
that such PAN Number is deactivated in the
year 2009, the respondent-Assessing Officer is
not paying any heed to such reply and solely
relied upon the information available on the
system, as if the system is the only source
for taking actions under the provisions of the
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Act and there is total non-application of mind
on behalf of the respondent-Assessing Officer
as well as the negligence on the part of the
respondent-Assessing Officer for not verifying
the data provided by the petitioner-assessee
in the replies time and again by disclosing
that the PAN AABCR5577P is not active since
2009 and inspite of such disclosure made by
the petitioner, the impugned order and the
notices are issued for re-opening the
assessment of 2017-18 without verifying that
the petitioner has also disclosed the PAN
Number, which is active and in which all
transactions are disclosed, which is available
in the system and entire data of all the
transactions though is available, the same is
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reflected in the impugned order to come to the
conclusion that such transactions are not
offered to tax in PAN AABCR5577P, which is
already deactivated in the year 2009.
7. In view of the above facts, the petition is
allowed. The impugned notices dated 30th
March, 2024 issued under Section 148A(b) of
the Act and 16th April, 2024 issued under
Section 148 of the Act as well as the impugned
order dated 16th April, 2024 passed under
Section 148A(d) of the Act are hereby quashed
and set aside and we hope that the respondent
No.2-Director General of Income Tax (Systems),
Delhi and DGIT (Systems) Bengaluru will look
into the matter and that similar issues do not
crop up in future .
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8. With this hope, the petition is disposed
of. Rule is made absolute to the aforesaid
extent. No orders as to cost.
(BHARGAV D. KARIA, J)
(PRANAV TRIVEDI,J)
PALAK
