The Bombay High Court in the case Diversey India Hygiene Private Limited Versus ACIT observed and has the reassessment proceedings against non-existent entities despite an active PAN.
The bench comprising of Justice K. R. Shriram and Justice Neela Gokhale in the case observed and has stated that the PAN was not deactivated, which would not help the revenue because there could be cases relating to various years when the company was in existence, and it is possible those PAN numbers are picked up for scrutiny or for the issuance of a refund.
The court stated that in our view that it will not be a sanction for the Department to issue notices to a non-existing entity, particularly when they were aware that the entity was not in existence.
In the present case, the petitioner or assessee challenged the reassessment notice on the ground that all the notices had been issued to a non-existing entity. Thus, the notice, i.e., Diversey India Private Limited, DIPL got amalgamated with the petitioner with effect from April 1, 2015.
Therefore, the dated May 12, 2016, was addressed to the Assessing Officer, AO and Principal Commissioner, informing them about the amalgamation.
The department contended before the court that the defence taken is for AY 2012–2013 and AY 2013–2014. When the notice which is issued under section 148 were served and the petitioner did not protest and participated in the reassessment proceedings. Thus, the PAN of the noticeer was not deactivated.
On the other hand, it has been contended by the assessee that the notice issued and an assessment order, if any, passed in the name of the amalgamating company that has lost its existence post-amalgamation is without jurisdiction and bad in law and thus liable to be set aside.
Accordingly, the court disposed of the writ plea by quashing the reassessment notices. The counsel, Advocate Sunil Moti Lala appeared for the petitioner. The counsel, Advocate Suresh Kumar represented the respondent.