Erangal Comtrade And Consultancy LLP Vs ACIT (Bombay High Court)
The Bombay High Court examined a challenge to a reassessment notice issued under Section 148 of the Income Tax Act, 1961, against Erangal Comtrade and Consultancy Private Limited, a company that had ceased to exist from 17 March 2016 following its conversion into an LLP. The petitioner LLP argued that the reassessment notice for AY 2017-18, as well as the subsequent draft and final assessment orders, were illegal because they were issued in the name of a non-existent entity. Key undisputed facts showed that the erstwhile company had duly converted into an LLP under the LLP Act and Rules, received a certificate of registration, and thereafter ceased to exist from the date of conversion. Both the erstwhile company and the LLP filed their respective returns for AY 2016-17 based on their operational periods, and for AY 2017-18 the LLP filed its return disclosing interest income from fixed deposits that had vested in it after conversion. During scrutiny proceedings for AY 2017-18, the LLP disclosed all details, including the conversion, asset transfer, fixed deposit renewals, and bank statements, and its income from interest was assessed under Section 143(3), though TDS credit was denied. A rectification application and an appeal on this issue remain pending.
