Section 148 Notice issued to amalgamated company quashed and set aside by HC

In the matter of Adani Estate Management Private Limited (Earlier Known as Shantigram Estate Management Limited) Versus Income Tax Officer, Ward 3(1)(1), Ahmedabad, Gujarat High Court has quashed the notice, under Section 148 of the Act, came to be issued to the petitioner; the amalgamated entity on 27.03.2021. The notice was held to be unjust and illegal.

It was submitted that this Court vide order dated 28.01.2016, approved the scheme of amalgamation of one Panchdhara Agro Farms Pvt. Ltd. with the petitioner-Company, i.e. Shantigram Estate Management Pvt. Ltd. with effect from 01.04.2015, i.e. the appointed date.

It was pointed out from the record that the petitioner informed the concerned Assessing Officer about the same vide communication dated 31.03.2016.

It was averred that in spite of the above, the Respondent issued a notice, under Section 133 (6) of the Income Tax Act, 1961 (in brief, ‘the Act’), on 24.01.2020.

The petitioner replied to the same vide communication dated 17.02.2020, wherein, the details, with regard to the fact of merger having taken place, were given. Though, this was pointed out to the concerned assessing officer, the notice, under Section 148 of the Act, came to be issued to the petitioner on 27.03.2021 and the reasons for reopening were supplied vide communication dated 29.12.2021.

The petitioner filed its objections to the same vide letter dated 13.01.2022.

It is the case of the petitioner that the notice dated 27.03.2021 issued to it, under Section 148 of the Act, is bad and illegal and the same deserves to be quashed. Hence, the present petition is filed.

Learned Advocate, Mr. Soparkar, submitted that, though, the aspect of merger was brought to the notice of the concerned assessing officer, the notice, under Section 148 of the Act, came to be issued to the petitioner on 27.03.2021, which is unjust and illegal.

In support of his submission, learned Advocate, Mr. Soparkar, placed reliance on the decision of the Hon’ble Apex Court, rendered in the case of ‘PRINCIPAL COMMISSIONER OF INCOME TAX VS. MARUTI SUZUKI LTD.’, reported in 416 ITR 613(SC).

Learned Advocate, Mr. Soparkar, also placed reliance on the decision of this Court in the case of ‘ADANI WILMAR LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX’, reported in 150 taxmann.com 178 (Gujarat).

On the other hand, learned Advocate, Mr. Sangani, appearing with learned Advocate, Ms. Raval, for the Respondent, though, opposed this petition, he is not in a position to dispute the fact that the issue involved in this matter is covered by the aforesaid two decisions.

Having heard the learned Advocates for the parties and having perused the material on record, it emerges that one Panchdhara Agro Farms Pvt. Ltd. came to be merged with Shantigram Estate Management Pvt. Ltd., i.e. the petitioner-Company, with effect from 01.04.2015 and the same was approved by this Court vide order dated 28.01.2016.

From the record, it also emerges that pursuant to the above, the petitioner had also intimated the concerned assessing officer of the respondent about the same vide communication dated 31.03.2016. A copy of the same is produced at Page-13 to the compilation. In spite of the same, a notice, under Section 148 of the Act, came to be issued to the erstwhile Panchdhara Agro Farms Pvt. Ltd.

In the above view of the matter, the court referred to the observations made in ‘ADANI WILMAR LTD.’ (Supra), wherein, after referring to the decision of the Apex Court ‘PRINCIPAL COMMISSIONER OF INCOME TAX VS. MARUTI SUZUKI LTD.’ in (Supra) quashed notice under Section-148 issued to Amalgamated Entity.

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