M/S. Sirisha Projects Pvt Ltd., vs Income Tax Officer 41,
2025 Latest Caselaw 3167 Tel

Telangana High Court

M/S. Sirisha Projects Pvt Ltd., vs Income Tax Officer 41, on 18 March, 2025

Author: P.Sam Koshy

Bench: P.Sam Koshy

                 THE HON'BLE SRI JUSTICE P.SAM KOSHY

                                               AND

      THE HON'BLE SRI JUSTICE NARSING RAO NANDIKONDA

                       WRIT PETITION No.12266 OF 2023

ORDER:

(per Hon'ble Sri Justice P.Sam Koshy)

Heard Mr.A.V.Raghu Ram, learned counsel for the petitioner and

Mr.J.V.Prasad, learned Senior Standing Counsel for the Income Tax

Department, appearing for the respondent Nos.1 & 2. Perused the

material available on record.

2. This writ petition has been filed aggrieved of the initiation of

proceedings under Section 148 A (d) of the Income Tax Act, against the

dissolved of non-existing entity. The proceedings were initiated against

the Bhuvanesh Realtors Private Limited and the said Bhuvanesh

Realtors Private Limited along with one Avathesh Property Developers

Private Limited, in a scheme of amalgamation, instituted before the

National Company Law Tribunal, Bench-1, Hyderabad. The Scheme of

amalgamation was allowed on 17.11.2021 and all the assets,

properties, rights and liabilities of the dissolved Bhuvanesh Realtors

Private Limited stood transferred to the amalgamated establishment

i.e., the petitioner entity viz., M/s. Srisha Projects Private Limited,

with effect from 01.04.2020. It was also agreed upon that all legal

proceedings pending or against the transferor company shall be

continued by or against the transferee company.

3. In the said admitted factual matrix, the initiation of proceedings

under Section 148 A (d) of the Income Tax Act could not had been

initiated against the dissolved company i.e., Bhuvanesh Realtors

Private Limited, it could had been only against the petitioner

establishment, if at all, permissible under law.

4. Learned counsel for the petitioner relied upon the judgments of

this High Court in the case of M/s. Virchow Drugs Limited v. The

Income Tax Offier 1, decided on 20.09.2023 and also in the case of

Nunhems India Private Limited V. The Deputy Commissioner of

Income Tax Circle 51 2, decided on 04.01.2024. Both these writ

petitions stood allowed relying upon the decisions of the Hon'ble

Supreme Court. For ready reference, the relevant portion of paragraph

Nos.9 & 10 of the judgment in the case of Nunhems India Private

Limited v. The Deputy Commissioner of Income Tax (supra) is

reproduced herein under:

9. It would be relevant at this juncture to take note of the relevant portion of the order passed by this Court in W.P.No.11247 of 2023, which is reproduced herein under:

W.P.11247 OF 2023.

W.P.37863 OF 2021.

"20. The Hon'ble Supreme Court finally endorsing the earlier view of the High Court of Delhi in the case of Spice Infotainment, supra, in paragraph Nos.33 to 35 held as under:

"In the present case, despite the fact that the AO was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppels against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Enfotainment on 2nd Nov., 2017. The decision in Spice Enfotainment has been followed in the case of the respondent while dismissing the Special Leave Petition for asst. yr. 2011-12. In doing so, this Court has relied on the decision in Spice Enfotainment.

We find no reason to take a different view. There is a value which the Court must abide by in promoting the interest of certainty in tax litigation. The view which has been taken by this Court in relation to the respondent for asst. yr. 2011-12 must, in our view be adopted in respect of the present appeal which relates to asst. yr. 2012-13. Not doing so will only result in uncertainty and displacement of settled expectations.

There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable. For the reasons, we find no merit in the appeal. The appeal is accordingly dismissed. There shall be no order as to costs."

21. It is also relevant at this juncture to take note of yet another recent decision of the High Court of Bombay in the case of SLSA INDIA (P) LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX, wherein the Bombay High Court reiterating the view of the High Court of Delhi in the case of Spice Infotainment, supra, and also following the dictum of the Hon'ble Supreme Court in the case of Maruti Suzuki (India) Limited, supra, in paragraph Nos.7 and 8 has held as under:

"The stand of the Revenue that the reassessment was justified in view of the fact that the PAN in the name of the non-existent entity had remained active does not create an exception in the favour of the Revenue to dilute in any manner the principles enunciated hereinabove.

Be that as it may the writ petition is allowed. The impugned notice dt.31st March, 2021 the order of assessment dt.31stMarch, 2022 as also the consequential demand notice and penalty notice dt.31st March, 2022 are set aside."

22. Given the aforesaid facts and circumstances of the case and also the admitted factual matrix, as has been, revealed in the preceding paragraphs, we are of the considered view that the present is also the case which squarely stands covered by the decision of the Hon'ble Supreme Court in the case of Maruti Suzuki (India) Limited (supra), and the recent decision of the High Court of Bombay in the case of SLSA INDIA (P) LTD., (supra), and the earlier judgment of the High Court of Delhi in the case of Spice Infotainment (supra).

23. The present Writ Petition deserves to be and is accordingly allowed, holding that the notice dated 24.03.2023 issued Section 148A(d) of the Act and the consequential notice of the same date i.e. 24.03.2023 under Section 148 of the Act, both being bad in law, are set aside, as the entire proceedings itself is against a non-existing company."

10. Keeping in view the aforesaid judicial precedents and the decision rendered by the Hon'ble Supreme Court in the case of PCIT Vs. Maruti Suzuki India Limited 3 (supra), we are of the considered opinion that the present is a fit case which deserves to be allowed and is accordingly allowed. The impugned Notice dated 17.06.2021 and the consequential proceedings drawn by the respondent authorities stands set aside/quashed. However, the right of the Department stands reserved to initiate appropriate proceedings, if they so want, against the merged company.

AIR ONLINE 2019 SC 714

5. In view of the judicial precedent which is consistently being

followed by the Hon'ble Supreme Court as also by all the High Courts,

we are inclined to allow the instant writ petition as well. As a

consequence, the impugned notice issued against the going company

i.e. M/s. Bhuvanesh Realtors Private Limited is set aside reserving the

right of the Department of availing appropriate legal remedies for the

statute still permits against the successor company i.e. the petitioner.

6. It is needless to mention that petitioners also, if at all, if the

Income Tax officer initiates any proceedings would be entitled

represent and contest the case on merits, in accordance with law.

7. Accordingly, this Writ Petition stands allowed. No order as to

costs.

As a sequel, miscellaneous applications pending if any, shall

stand closed.

__________________ P.SAM KOSHY, J

_________________________________ NARSING RAO NANDIKONDA, J

Date: 18.03.2025 AQS

THE HON'BLE SRI JUSTICE P.SAM KOSHY

AND

THE HON'BLE SRI JUSTICE NARSING RAO NANDIKONDA

WRIT PETITION No.12266 OF 2023

18.03.2025 AQS