[Cites 5, Cited by 0]
Telangana High Court
M/S. Bright Town Investment Advisor ... vs The Income Tax Officer on 6 April, 2026
Author: P.Sam Koshy
Bench: P.Sam Koshy
THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE NARSING RAO
NANDIKONDA
W.P.No.27445 of 2023
Date:06.04.2026
Between:
M/s.Bright Town Investment Advisor Private Limited
... Petitioner
And
The Income Tax Officer, Ward-17(1), Hyderabad
and another.
...Respondents
ORDER:
(per Hon'ble Sri Justice P.Sam Koshy)
Heard Mr.A.V.Raghu Ram, learned counsel appears for the
petitioner and Ms.J.Sunitha, learned Senior Standing Counsel for
the Income Tax Department, representing Ms.Sundari R.Pisupati,
learned Senior Standing Counsel for the Income Tax Department,
appears for the respondents.
2. This writ petition has been filed aggrieved by the initiation of
proceedings under Section 148A (d) of the Income Tax Act, 1961
(for short "the Act") against a dissolved or non-existing entity. The
proceedings were initiated against M/s.VVSS Agro Farms Private
Limited, which stood merged with the petitioner, in a scheme of
amalgamation, instituted before the National Company Law
Tribunal, Bench-1, Hyderabad. The Scheme of amalgamation was
allowed on 25.09.2019 and all the assets, properties, rights and
liabilities of the dissolved M/s.VVSS Agro Farms Private Limited
stood transferred to the amalgamated establishment i.e. the
petitioner entity viz., M/s.Bright Town Investment Advisor Private
Limited, with effect from 31.03.2018. 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 148A (d) of the Act could not had been
initiated against the dissolved company i.e. M/s.VVSS Agro Farms
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 M/s.Virchow Drugs Limited v. The Income
Tax Officer 1decided on 20.09.2023 and also in 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 and 10
of the judgment in the case of Nunhems India Private Limited
(2 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:
"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 filed 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 v. MARUTI SUZUKI INDIA LIMITED 3, we areof the
considered opinion that the present is a fit case which deserves to
be allowed and is accordingly allowed. The impugned Notice
dated 17.06.201 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.VVSS Agro Farms 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 the petitioner 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.
Miscellaneous applications pending, if any, shall stand
closed.
_________________
P.SAM KOSHY, J
__________________________________
NARSING RAO NANDIKONDA, J
06.04.2026
Nvl
