Delhi High Court holds notice issued to non-existing company useless under IT Act

Delhi High Court holds notice issued to non-existing company useless under IT Act

Directs the assessing officer to pass a fresh order

The Delhi High Court has held that the notice issued under the Income Tax Act,1961 to a non-existing company is null.

The petitioner, Rajasthan Global Securities Pvt. Ltd challenged the notices issued during 2021 and 2022 under IT Acts and the consequential 2022 notice for the Assessment Year 2013-2014.

The petitioner contended that Aureole Impex Pvt. Ltd. (transferor company) merged with Rajasthan Global Securities (transferee company) vide the Delhi High Court's March 2013 order. It further stated that after the amalgamation order, without winding up, the company stood dissolved. Thus, Aureole Impex was not obligated to file an Income Tax Return (ITR).

The petitioner contended that it filed its ITR for the Assessment Year 2013-2014. This was inclusive of the financial data/numbers of Aureole Implex for the relevant period. The scrutiny assessment was also done.

The bench comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora viewed that not only the notice was issued in the name of the transferor company, but the impugned order and the notice were issued on the PAN of the transferor company.

The court held, "The impugned order passed under the Income Tax Act as well as the consequential notice issued for the Assessment Year 2013-2014 are set aside. The notice issued under the Income Tax Act is deemed to have been issued to the transferee company."

Thereafter, the petitioner was granted the liberty to file its response to the notice within two weeks. The Assessing Officer (AO) was directed to pass a fresh order under the IT Act.