Notice issued in the name of non-existing entity is liable to be set aside

Coffee Day Resorts (MSM) Pvt Ltd Vs DCIT (Karnataka High Court)

Karnataka High Court held that notice issued in the name of non-existing entity as on the date of issuance of notice is liable to be set aside.

Facts- The petitioner vide the present petition mainly contended that notice under Section 148A (b) came to be issued to M/s.Shankar Resources (P) Ltd., with PAN Number AAHCS6289D has amalgamated with M/s.Coffee Day Resorts (MSM) Pvt. Ltd., with PAN Number AADCC6017D with effect from 01.04.2018. Accordingly, it was contended that the Company M/s.Shankar Resources (P) Ltd., ceased to exist from 01.04.2018 and there was no assessable entity by name M/s.Shankar Resources (P) Ltd., for the Assessment Year 2019-20.

Conclusion- Hon’ble Apex Court in the case of Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd. has held that notice and assessment order passed in the name of non-existing company is a substantive illegality and is an order passed without jurisdiction.

Held that only on the above ground of M/s.Shankar Resources (P) Ltd., having merged with the petitioner company and was not an existing entity as on the date of issuance of notice, the notice under Section 148A (b) is set aside.

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