Two writ petitions challenging the validity of IT notices dated 31 March 2019 issued to non-existing companies were disposed of by quashing them.
Quashing and setting aside of the show cause notices dated 31st March 2019 issued by the respondents.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
Digitally signed by GAURI GAURI AMIT GAEKWAD AMIT Date: GAEKWAD 2021.09.23 10:48:45 +0530
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.3562 OF 2019
Vahanvati Consultants Pvt. Ltd. ….Petitioner
V/s.
Income Tax Officer – 7 (2) (1), Mumbai & Ors. ….Respondents
WITH
WRIT PETITION NO.3556 OF 2019
Vahanvati Consultants Pvt. Ltd. ….Petitioner
V/s.
Assistant Commissioner of Income Tax
2 (3) (2) and Ors. ….Respondents
----
Mr. Madhur Agrawal i/b. Mr. Atul K. Jasani for petitioner.
Mr. Suresh Kumar for respondents.
----
CORAM : K.R. SHRIRAM &
M.S. KARNIK, JJ.
DATED : 22nd SEPTEMBER 2021
P.C. :
WRIT PETITION NO.3562 OF 2019
1In this petition, petitioner is praying for setting aside the show
cause notice dated 31st March 2019. It is petitioner’s case in nutshell, that
the notice under Section 148 of the Income Tax Act, 1961 (the Act) has
been issued to a non existing company and therefore, as held by this Court
as well as the Apex Court in various judgments, the notice is bad in law.
2There was another entity by the name ECD Electrons and
Electrolysis Pvt. Ltd. which was merged with petitioner. Even in that case,
notice has been issued to ECD Electrons and Electrolysis Pvt. Ltd and this
Gauri Gaekwad
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Court in its order dated 11th August 2021 in Writ Petition No.2828 of 2019
(Vahanvati Consultants Pvt. Ltd. V/s. Asst. Commissioner of Income Tax,
Central Circle – 2 (1) (2), Mumbai and Ors.) held that the notice issued and
the consequent order passed in that order were bad and had set aside the
same. Mr. Agrawal states that this Court in Writ Petition No.2742 of 2019 by
judgment dated 10th August 2021 (Alok Knit Exports Limited V/s. The
Deputy Commissioner of Income Tax, Circle 6 (1) (1) and Ors.) also held
that the notice issued to a non existent company is bad in law.
3Mr. Suresh Kumar states that he had appeared in Writ Petition
No.2828 of 2019 where the same petitioner was involved.
4In the circumstances, the notice dated 31st March 2019 having
being issued to an entity, which had ceased to exist, is hereby quashed and
set aside.
5Petition disposed.
WRIT PETITION NO.3556 OF 2019
6The order passed above in Writ Petition No.3562 of 2019 will
be applicable in this case in its entirety except that the merged entity, to
which the notice was issued, is Safari Mercantile Pvt. Ltd.
7Therefore, in this petition also the notice dated 31st March 2019
is quashed and set aside.
Gauri Gaekwad
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8Petition disposed.
(M.S. KARNIK, J.) (K.R. SHRIRAM, J.)
Gauri Gaekwad
2 issues framed by the court
Whether a notice under Section 148 of the Income Tax Act issued to a non-existing company is valid in law.
Whether such a notice can be quashed on the ground that the entity to which it was issued had ceased to exist.
Vahanvati Consultants Pvt. Ltd.
Income Tax Officer – 7 (2) (1), Mumbai
Assistant Commissioner of Income Tax 2 (3) (2)
K.R. SHriram
M.S. KARNIK
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court