C. Sivanandam Vs ACIT (Madras High Court)
Madras High Court Quashes Reassessment Where Company Was Already Liquidated by NCLT
The Madras High Court allowed the writ petition and quashed the order passed under section 148A(d) as well as the consequential notice issued under section 148 for AY 2016–17, holding that the reassessment proceedings were unsustainable in law. The impugned action was initiated against the petitioner in relation to a company of which he was a director, even though the company had already been ordered to be liquidated by the NCLT on 17.10.2022.
The Court noted that the official liquidator had formally intimated the Assessing Officer about the liquidation and dissolution of the company well before the issuance of the show-cause notice and the impugned order. Despite this, the Department proceeded to pass an adverse order under section 148A(d) and issued a notice under section 148 on the erroneous premise that the company was still in existence.
Holding that the Department’s stand was contrary to the factual and legal position on record, the High Court ruled that the reassessment proceedings could not be sustained once the company had ceased to exist pursuant to the NCLT order. Consequently, the impugned order and notice were set aside, and the writ petition was allowed, with connected miscellaneous petitions closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
In this Writ Petition, the petitioner has challenged impugned order dated 23.04.2023 passed u/s.148A(d) of the Income Tax Act, 1961 (in ITBA/COM/F/17/2023-24/1052278984(1) and the consequential notice dated 23.04.2023 issued u/s.148 of the Income Tax Act, 1961 in ITBA/AST/S/91/2023-24/1052279144(1).
