Bombay High Court
City Corporation Limited Through Its … vs Assistant Commissioner Of Income Tax … on 29 January, 2025
Author: M.S.Sonak
Bench: M.S.Sonak
2025:BHC-AS:4177-DB wp.6076-2023 & ors.docx
Digitally signed
by LAXMIKANT
GOPAL
LAXMIKANT CHANDAN
Lgc
GOPAL Date:
CHANDAN 2025.01.29
15:32:06
+0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 6076 OF 2023
WITH
WRIT PETITION NO. 6077 OF 2023
WITH
WRIT PETITION NO. 6078 OF 2023
WITH
WRIT PETITION NO. 6079 OF 2023
WITH
WRIT PETITION NO. 6080 OF 2023
WITH
WRIT PETITION NO. 6081 OF 2023
CITY CORPORATION LIMITED, ]
Through its Director; ]
Mr Aniruddha P. Deshpande ]
Address:917/19A, City Chambers, ]
FC Road, Deccan Gymkhana, ]
Pune - 411004 ] ...Petitioner
VERSUS
1. ASSISTANT COMMISSIONER OF ]
INCOME TAX CIRCLE 1(1), PUNE, ]
Address: PMT Building, ]
Shankar Seth Road, ]
Pune - 411037 ]
2. PRINCIPAL CHIEF COMMISSIONER ]
OF INCOME TAX, ]
2nd Floor Ayakar Bhawan, 12, ]
Sadhuvaswani Chowk, ]
Pune - 411001 ]
Page 1 of 13
::: Uploaded on - 29/01/2025 ::: Downloaded on - 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docx
3. UNION OF INDIA, ]
through the Ministry of Finance, ]
Department of Revenue, ]
Room No.46, North Block, ]
New Delhi - 110 001 ] ...Respondents
__________________________________________________________
A PPEARANCES -
Mr Sham Walve, a/w Mr Sanket S. Bora, Ms Vidhi Punmiya,
Mr Bhavik Chheda, i/b. SPCM Legal, for the Petitioner
in all Petitions.
Mr Suresh Kumar, for the Respondents in all Petitions.
__________________________________________________________
CORAM : M.S.Sonak &
Jitendra Jain, JJ.
RESERVED ON : 28 January 2025
PRONOUNCED ON : 29 January 2025
JUDGMENT (Per MS Sonak J):
–
1. Heard learned counsel for the parties.
2. Rule in each of these Petitions. The rule is made
returnable immediately at the request of and with the consent
of learned counsel for the parties.
3. The learned counsel for the parties agree that all these
Petitions can be disposed by a common order since they
involve substantially common issues of law and fact. The
learned counsel also agree that Writ Petition No.6076 of 2023
be treated as lead Petition.
4. Writ Petition No.6076 of 2023 concerns Assessment Year
2013-14. The remaining Writ Petitions are concerned with
Page 2 of 13
::: Uploaded on – 29/01/2025 ::: Downloaded on – 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docx
Assessment Years 2014-15, 2016-17, 2017-18, 2018-19 and
2019-20 respectively.
5. All these Petitions are instituted by “City Corporation
Limited” [CCL], which is engaged in constructing and
developing infrastructure facilities. In terms of the NCLT’s
order dated 27 April 2020, the CCL got merged with its
wholly owned subsidiary “Amanora Future Tower Pvt. Ltd.”
(AFTPL), with effect from 01 April 2018.
6. By communication dated 27 April 2020, the Petitioner
informed the Income Tax Authority of the merger effective 01
April 2018. This intimation dated 27 August 2020 is at
Exhibit-B (page 34 of the paper book in Writ Petition No.6076
of 2023). This intimation bears the stamp and endorsement
of receipt from the office of the Deputy Commissioner of
Income Tax, Circle 1(1), Pune. In the return filed on behalf of
the Respondents, no dispute is raised about receiving this
intimation on 27 August 2020.
7. On 31 March 2023, the Assistant Commissioner of
Income Tax, Circle 1(1), Pune, issued a notice dated 31 March
2013 under Section 148 of the Income Tax Act, 1961
(“impugned notice”) to AFTPL seeking to reopen the case in
PAN: AAKCA3074H. The Assistant Commissioner obtained
approval from the Principal Chief Commission of Income Tax
to issue this notice to “Amanora Future Towers Private
Limited (now merged with City Corporation Limited)”.
8. The Petitioner thereupon instituted the present Petitions,
questioning the impugned notice dated 31 March 2023, inter
alia, on the ground that, post-merger, AFTPL was a non-
Page 3 of 13
::: Uploaded on – 29/01/2025 ::: Downloaded on – 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docx
existing entity. Therefore, no notice under Section 148 of the
Income Tax Act, 1961 (IT Act, 1961) could have been issued
to AFTPL.
9. Mr. Walve, the learned counsel for the Petitioner, has
relied on Principal Commissioner of Income Tax, New Delhi vs
Maruti Suzuki India Ltd.1; Uber India Systems (P.) Ltd. vs
Assistant Commissioner of Income2; and Alok Knit Exports
Ltd. vs Deputy Commissioner of Income-tax, Circle 6(1)(1),
Mumbai3; in support of the contention that the notice issued
to a non-existing entity post-merger was a substantive
illegality and not some procedural violation. Accordingly, he
urged that the impugned notices be quashed and set aside.
10. Mr. Suresh Kumar, the learned counsel for the
Respondents, submitted that issuing notices in the name of
AFTPL was not illegal. He also submitted that the Principal
Commissioner of Income Tax specifically approved the
issuance of such notices.
11. Mr. Suresh Kumar submitted that the material on record
shows that the notice was meant to be served upon the
Petitioner. However, due to certain technical glitches, the
utility system generated a notice in the name of AFTPL. He
said the facts in the present case were like those in Skylight
Hospitality LLP vs Asstt. CIT4. He submitted that, in this case,
the Delhi High Court upheld a notice issued to the company
that had already merged. Mr. Suresh Kumar Accordingly
urged that these Petitions may be dismissed.
1
(2019) 107 taxmann.com 375 (SC)
2
(2024) 168 taxmann.com 200 (Bombay)
3
(2021) 130 taxmann.com 457 (Bombay)
4
(2018) 92 taxmann.com 93/254 Taxman 390 (SC)
Page 4 of 13
::: Uploaded on – 29/01/2025 ::: Downloaded on – 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docx
12. Rival contentions now fall for our determination.
13. In all these Petitions, the merger between City
Corporation Limited and Amanora Future Towers Private
Limited, which was effective from 01 April 2018, is not
disputed. This merger was based on the NCLT’s order dated
27 April 2020.
14. There is also no dispute about the Petitioner, vide a
communication received by the Income Tax Department on 27
August 2020 informing about the merger effective 01 April
2018. The communication, along with an endorsement from
the office of the Deputy Commissioner of Income-tax, Circle
1(1), Pune, is placed on record at Exhibit-b (page 34 of the
paper book in Writ Petition No.6076 of 2023), as also in the
connected Petitions. In the affidavit in reply filed, no dispute
was raised about the department not receiving the intimation
on 27 August 2020 or about the department being unaware of
the merger. Still, the impugned notices dated 31 March 2023
under Section 148 of the IT Act, 1961 were issued only in the
name of “Amanora Future Towers Private Limited”
15. The contents of the impugned notice dated 31 March
2023 at Exhibit ‘C’ page 35 in Writ Petition No. 6076 of 2023
are transcribed below for the convenience of reference: –
“EXHIBIT-C
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
INCOME TAX DEPARTMENT
OFFICE OF THE ASSISTANT
COMMISSIONER OF INCOME TAX
CIRCLE 1(1), PUNETo
AMANORA FUTURE TOWERS PRIVATE LIMITED
917/19A CITY CHAMBERS, F.C. ROAD PUNE
PUNE 411004, Maharashtra
IndiaPage 5 of 13
::: Uploaded on – 29/01/2025 ::: Downloaded on – 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docxPAN : A.Y : Dated : DIN & Notice No:
AAKCA3074H 2013-14 31/03/2023 ITBA/AST/S/148_1/2022-
23/1051822997(1)Notice under section 148 of the Income-tax Act, 1961
Sir/Madam/ M/s.
I have information that a search was initiated under section
132 of the Act in your case or in the case of the person in
respect of which you are the assessable under the Act on the
date 15/02/2023.
This notice is being issued after obtaining the prior approval
of the PCCIT, PUNE accorded on date vide Reference No.
100000038654133.
2. I, therefore, propose to assess or reassess such income or
recompute the loss or the depreciation allowance or any
other allowance or deduction for the Assessment Year 2013-
14 and I, hereby, require you to furnish, within 30 days from
the service of this notice, a return in the prescribed form for
the Assessment Year 2013-14.
GANESH SHAMRAO RAKH
CIRCLE 1(1), PUNE”
16. The impugned notices in the connected Petitions are
also similar, the crucial factor being that all such notices were
issued to and in the name of ‘Amanora Future Towers Private
Limited’
17. As of the date of the issue of the impugned notices, the
noticee ‘Amanora Future Towers Private Limited’ could not
have been regarded as a ‘person’ under Section 2(31) of the IT
Act. In fact, that was a non-existent entity. In Maruti Suzuki
(supra) the Hon’ble Supreme Court has held that notice issued
in the name of a non-existent company is a substantive
illegality and not merely a procedural violation of the nature
adverted to in Section 292B of the IT Act.
Page 6 of 13
::: Uploaded on – 29/01/2025 ::: Downloaded on – 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docx
18. In Maruti Suzuki (supra), the Hon’ble Supreme Court
noted that the merged company had no independent existence
after the merger. The Court noted that even though the
Assessing Officer was informed of the merged company
having ceased to exist due to the approved merger scheme,
the jurisdictional notice was issued only in its name. The
Court held that the basis on which jurisdiction was invoked
was fundamentally at odds with the legal principle that the
merged entity ceases to exist upon the approved merger
scheme. Participation in the proceedings by the petitioner
company into which the merged company had merged or
amalgamated could not operate as an estoppel against the
law.
19. In Ubber India Systems (supra), the Coordinate Bench
held that where by virtue of an order passed by the NCLT, the
assessee company stood amalgamated with the petitioner,
notice issued under Section 148A(b) and Section 148 to the
assessee, which was a non-existent company was illegal,
invalid and non-est. Similarly, in Alok Knit Exports Ltd
(supra), another Coordinate Bench where the Assessing
Officer had committed a fundamental error by issuing notice
under Section 148 of the IT Act in the name of an entity
which had ceased to exist because of it having merged with
the petitioner company, the stand of the Assessing Officer that
this was only an error which could be corrected under Section
292B could not be sustained.
20. Mr Suresh Kumar, however, relied upon the explanation
in paragraphs 4.2 and 4.3 of the affidavit filed by Dr. Ganesh
Page 7 of 13
::: Uploaded on – 29/01/2025 ::: Downloaded on – 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docx
S. Rakh, Joint Commissioner of Income Tax (OSD), in these
Petitions. To appreciate the contention, Paragraphs 4.2 and
4.3 are transcribed below for the convenience of reference: –
“4.2. With reference to the contents of Para No. 3 A of the
Writ Petition, notice issued u/s. 148 of the Income-tax Act,
1961 (hereinafter referred as ‘the Act’) dated 31/03/2023
issued by the Respondent No. 1 in the case of the petitioner for
A.Υ. 2013-14. I deny that the notice issued by respondent No. 1
is bad-in-law, illegal or unlawful as the same is issued on to a
non-existing company which is merged with Amanora Future
Tower Private Limited. The petitioner grounds that the notices
were issued on non-existent entity. In this regard, it is to submit
that the seized material is for assessment years prior to merger
of Amanora Future Towers Private Limited
(PAN:AAKCA3074H) into City Corporation Limited
(PAN:AACCC2820K) i.e. the seized material is showing the
transaction in the name of Amanora Future Towers Private
Limited (referred hereinafter as ‘AFTPL’), the information is
related to Amanora Future Towers Private Limited and same
were reflected on the PAN of Amanora Future Towers Private
Limited on insight portal. The insight portal shows and
highlights/flags information as per the PAN and Name of the
Party. A search action was conducted on 15/02/2023 on the
City Group. The conducting DDIT(Inv.) who is holding the
incriminating documents for the years prior to the merger of
AFTPL into CCL, uploaded the information on the PAN of
AFTPL. But while taking the approval from the competent
authorities (Respondent No.2) as per the provisions of Sec.
148, 148A, 149, 151 of the Act, the name of both the entities
i.e. AFTPL and CCL along with the respective PANs were duly
quoted. The Copy of the approval of the competent authority is
shared with the assessee as well with the Notice u/s 148 of the
Act. In short, the notice u/s 148 was issued on the PAN of non-
existent entity as the information was reflected/ flagged on
that PAN on the insight portal. There is not a single field on this
notice which is editable. So the Notice was generated on the
PAN of AFTPL. But assessee was simultaneously communicated
that all the approvals are taken in the name of- ‘M/s Amanora
Future Towers Pvt. Ltd. (Now Merged with M/s City
Corporation Ltd.)’. So, considering the above facts and after
verifying that Amanora Future Towers Private Limited was
merged with City Corporation Limited, the approval was taken
from competent authority in the name of Amanora Future
Towers Private Limited (PAN:AAKCA3074H) which merged in
City Corporation Limited (PAN:AACCC2820K). A copy of the
same approval is attached herewith for kind reference as
Exhibit-R1. The same copy was also shared with petitionerPage 8 of 13
::: Uploaded on – 29/01/2025 ::: Downloaded on – 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docxalongwith notices issued u/s. 148 of the Act. All the internal
procedure has been communicated with the name of resultant
entity. However, due to non-linking of amalgamating entity’s
PAN to amalgamated entity’s PAN, and non-availability of
modification option in the 148 notice before issuance, notice
u/s 148 was generated through system in the name of
Amanora Future Towers Private Limited. As such, the approval
was taken in the name of existing entity thus; the notice should
have been issued in the name of resultant entity. Thus, Hon’ble
Court is requested to direct petitioner to treat the notice as
good as in the name of existent entity.
4.3. With reference to the contents of Para No. 3 B of the
Writ Petition, the Petitioner states that the Respondent was well
aware of the fact that Amanora Future Tower Private Limited
was merged with the Petitioner’s company i.e. City Corporation
Limited. To that, I reiterate my comments in the earlier
paragraphs of this reply and agree that the amalgamation of
the company was brought to notice of the Department. I say
that the notice was issued on the non-existing company due to
technical glitch in the system wherein no field in the notice u/s
148 of the Act is editable.”
21. The averments in the above paragraphs support the
Petitioner’s case. In paragraph 4.3, there is a clear admission
that the amalgamation of the company was brought to the
notice of the Department. The only explanation is that ” notice
was issued on the non-existing company due to technical
glitch in the system wherein no field in the notice u/s 148 of
the Act is editable.”
22. In paragraph 4.2, the approval obtained from the
Principal Commissioner for the issue of impugned notices is
emphasised. The affidavit states that files were moved
proposing notices in the names of both entities, AFTPL and
the Petitioner (CCL). There was a reference to seizure
proceedings, the two PAN numbers, and the lack of an
editable field on this notice. Therefore, it was submitted that
the notice was generated on AFTPL’s PAN.
Page 9 of 13
::: Uploaded on – 29/01/2025 ::: Downloaded on – 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docx
23. In short, the averments in paragraphs 4.2 and 4.3 of the
affidavit purport to apportion the blame on the department’s
utility system. Based upon this, the fundamental error is
sought to be passed off as a mere technical glitch. Finally, the
concluding sentence of paragraph 4.2 of the affidavit urges
this Court:
“Thus, Hon’ble Court is requested to direct petitioner to treat
the notice as good as in the name of existent entity. ”
24. Based on the above averments and the arguments, we
are afraid we cannot condone the fundamental error in
issuing the impugned notices against a non-existing company
despite full knowledge of the merger. The impugned notices,
which are non-est cannot be treated as “good” as urged on
behalf of the Respondents. In Maruti Suzuki (supra), the
Hon’ble Supreme Court has held that issuing notice in the
name of a non-existing company is a substantive illegality and
not a mere procedural violation of the nature adverted to in
Section 292B of the IT Act.
25. Mr Suresh Kumar’s contention about the facts in the
present case being akin to those in Skylight Hospitality LLP
(supra) cannot be accepted. Except for submitting that the
facts are similar or comparable, nothing was shown to us
based upon which such a submission could be entertained,
much less sustained. In any event, the Hon’ble Supreme
Court, in the case of Maruti Suzuki (supra), considered the
Delhi High Court’s decision in Skylight Hospitality LLP (supra)
and held that the same was delivered “in the peculiar facts of
Page 10 of 13
::: Uploaded on – 29/01/2025 ::: Downloaded on – 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docx
the case”. In fact, even the Delhi High Court had clarified that
the decision was in the case’s peculiar facts.
26. In that case, there was substantial and affirmative
material and evidence on record to show that issuing the
notice in the name of the dissolved company was only a
mistake. The Court held that the Special Leave Petition filed
by the Skylight Hospitality LLP (supra) against the judgment
of the Delhi High Court rejecting its challenge was dismissed
in the peculiar facts of the case, which weighed with the Court
in concluding that there was merely a clerical mistake within
meaning of Section 292B. The Hon’ble Supreme Court held
that in Maruti Suzuki (supra) the notice under Section 143(2)
under which jurisdiction was assumed by the assessing officer,
was issued to a non-existent company. The assessment order
was issued against the amalgamating company. “This is a
substantive illegality and not a procedural violation of the
nature adverted to in Section 292B“.
27. The argument now sought to be raised by Mr Suresh
Kumar based on Skylight Hospitality LLP (supra) was
considered and rejected by the Gujarat High Court in Anokhi
Realty (P) Ltd. Vs. Income-tax Officer5. In Adani Wilmar Ltd.
Vs. Assistant Commissioner of Income-tax6, another Division
Bench of the Gujarat High Court rejected the Revenue’s
argument based on lack of inter-departmental coordination or
non-application of mind when materials relating to
amalgamation were already available with the department.
The Court held that based upon such grounds, notices could
not have been issued to a non-existent company.
5
(2023) 153 taxmann.com 275 (Gujarat)
6
2023 150 taxmann.com 178 (Gujarat)
Page 11 of 13
::: Uploaded on – 29/01/2025 ::: Downloaded on – 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docx
28. The Delhi High Court, in the case of Principal
Commissioner of Income Tax -7, Delhi Vs. Vedanta Limited 7
rejected a contention very similar to that raised by Mr Suresh
Kumar, relying on Skylight Hospitality LLP (supra). The Delhi
High Court noted that the decision of the Supreme Court in
Maruti Suzuki (supra), while enunciating the legal position
concerning an order being framed in the name of a non-
existent entity, had unequivocally held as being a fatal flaw
which could neither be corrected nor rectified. It had held
explicitly that such an order cannot be salvaged by taking
recourse to Section 292B of the IT Act. The Court also noticed
the peculiar facts obtained in Skylight Hospitality LLP (supra),
which alone had led to the Supreme Court upholding the
assessment made, albeit in the name of an entity that had
ceased to exist.
29. Accordingly, after considering the above facts and
circumstances and the law, we are satisfied that the impugned
notices deserved to be quashed and set aside. We do so by
making the rule absolute in these petitions.
30. Before we conclude, we need to clarify that nothing in
this order would preclude the respondents from issuing a
fresh notice to CCL for reassessment, should the law otherwise
permit it, and if the circumstances justify it. We have quashed
the impugned notices only because they were issued to a non-
existing company or entity despite the respondents’
knowledge of its non-existence. All contentions in this regard
are left open because we have not addressed them in this
order.
7
ITA No. 88 of 2022 decided on 17 January 2025
Page 12 of 13
::: Uploaded on – 29/01/2025 ::: Downloaded on – 29/01/2025 22:19:30 :::
wp.6076-2023 & ors.docx
31. The rule is made absolute in each of these petitions
without any cost orders.
32. All concerned should act on an authenticated copy of
this order.
(Jitendra Jain, J) (M. S. Sonak, J) Page 13 of 13 ::: Uploaded on - 29/01/2025 ::: Downloaded on - 29/01/2025 22:19:30 :::