HC Quashes assessment order for non-consideration of submission of Assessee

Baxter India Private Limited Vs Addl. CIT (Delhi High Court)

1. Present writ petition has been filed challenging the impugned assessment order dated 31^st March, 2022 passed for the Assessment Year 2016-17 under Section 147 read with Sections 144 & 144B of the Income Tax Act, 1961 (for short ‘Act’) as well as demand notice dated 31^st March, 2022 issued under Section 156 imposing a demand of Rs.8,58,76,140/-.

2. Learned counsel for the Petitioner states that notice has been issued by a non-jurisdictional assessing officer to a non-existent entity. He states that the Respondent No.2 (the then jurisdictional Assessing Officer) was duly intimated much before he wrongfully initiated the impugned reassessment proceedings that Gambro India Private Limited has merged with Petitioner with effect from 01^st April, 2015 and therefore stands dissolved. He states that the present case is squarely covered by the decision of the Supreme Court in Principal Commissioner of Income tax, New Delhi vs. Maruti Suzuki (India) Limited, (2020) 18 SCC 331 and this Court’s decision in Spice Infotainment vs. Commissioner of Income tax, (2012) 247 CTR (Del) 500 confirmed by the Supreme Court’s order dated 02^nd November, 2018, wherein the Supreme Court has held that assessment against a non-existent entity is void ab initio.

3. He further states that since Gambro India has ceased to exist w.e.f 01^st April, 2015, it neither has a separate existence nor has any audited financials and consequentially no income to be assessed separately for the relevant Financial Year (FY) 2015-16. He states that the Petitioner has already filed return of income for the relevant FY with Respondent No.3 (jurisdictional AO, Delhi) and is already being assessed in Delhi by Respondent No.3 for the relevant FY and reassessment proceedings under Section 148 are pending against the Petitioner before the Respondent No.3. Thus, he states that a second and separate reassessment proceeding for the relevant FY vide the impugned notice and impugned order against a non-existent company, Gambro India, is void ab initio.

4. Per contra, learned counsel for the Respondents states that the present case is covered by the latest judgment of the Supreme Court in Principal Commissioner of Income Tax (Central) – 2 vs. Mahagun Realtors (P) Ltd., 2022 SCC OnLine SC 407.

Please become a Premium member. If you are already a Premium member, login here to access the full content.