Entity To Which Notice Is Issued Is Deemed Not To Be In Existence: Karnataka HC Sets Aside Notice Issued U/S 148A Income Tax Act To Amalgamated Company
The Karnataka High Court set aside a notice issued under Section 148A of the Income Tax Act, 1961 to an amalgamated company.
The Court was hearing a Writ Petition that questioned the validity of the order passed under Section 148A (d) of the Income Tax Act, 1961 as well as the notice under Section 148 of the Act.
The bench of Justice S Sunil Dutt Yadav observed, “It is noticed that the notice under Section 148A (b) of the Act is issued on 28.02.2024 with respect to the assessment year 2020-21. The scheme of amalgamation has fixed the appointed date as 01.04.2019 and accordingly after such date, the entity to which notice is issued is deemed not to be in existence. If that were to be so, issuance of notice to M/s. Allsight Software India Pvt. Ltd., requires to be set aside on such sole ground of entity not being in existence on the relevant date of issuance of notice.”
Advocate Tanmayee Rajkumar appeared for the Appellant and Advocate M.Thirumalesh appeared for the Respondent.
Brief Facts-
It is the case of the petitioner that the notice under Section 148A (b) of the Act has been issued in the name of M/s. Allsight Software India Private Limited by notice in 2024 relating to the assessment year 2020-21. The said entity has ceased to exist by virtue of confirmation of the order of the scheme of amalgamation in 2019.
The Court noted the petitioner's submission that, under the scheme of amalgamation, liability would be transferred and returns have been filed for the new entity, incorporating the income of M/s. Allsight Software India Pvt. Ltd., thereby causing no prejudice.
The Court said that the authorities may examine contentions raised on merits as well, including that the income of M/s. Allsight Software India Pvt. Ltd., which has been subsequently declared in the return of income filed in the name of the petitioner after approval of the scheme of amalgamation and that assessment orders have already been passed.
Accordingly, the Court set aside the notices.
Finally, the Court disposed of the petition.
