$~4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Judgment: 2nd February, 2018
+ W.P.(C) 10870/2017 and CMNo. 44503/2017
SKY LIGHT HOSPITALITY LLP ..... Petitioner
Through Mr. C. S. Aggarwal, Sr. Adv. with
Mr. Gautam Jain, Mr. Madhur
Aggarwal and Mr. Uma Shankar,
Advs.
versus
ASSISTANT COMMISSIONER OF
INCOME TAX, CIRCLE -28(1), NEW DELHI ..... Respondent
Through Mr. Zoheb Hussain, Sr. Standing
Counsel
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE CHANDER SHEKHAR
SANJIV KHANNA, J. (ORAL)
Sky Light Hospitality LLP, a limited liability partnership, who had
on 13.05.2016 taken over and acquired rights and liabilities of M/s Sky
Light Hospitality Private Limited upon conversion under the Limited
Liability Partnership Act, 2008, has filed the present writ petition
impugning notice dated 30.03.2017 for the assessment year 2010-11 under
Section 147/148 of the Income Tax Act, 1961 (,,Act for short).
2. Petitioner also impugns the order dated 09.11.2017 passed by the
Assessing Officer, the Assistant Commissioner of Income Tax, Circle-28
W.P.(C) 10870/2017 Page 1 of 19
(1) New Delhi, rejecting objections against initiation of proceedings under
Section 147/148 of the Act.
3. Contentions raised by the petitioner in brief are:-
(i) Notice under Section 147/148 of the Act dated 30.03.2017 was
addressed and issued to M/s Sky Light Hospitality Pvt. Ltd., PAN No.
AALCS3800N, a company which had ceased to exist and was
dissolved on 13.05.2016. This notice issued to a dead juristic person
is invalid and void in the eyes of law.
(ii) Section 292B of the Act is inapplicable as (a) issue of notice
in the name of the Assessee to be assessed is a jurisdictional pre-
condition and (b) the Assessing Officer after due application of mind
and deliberation had issued notice to M/s Sky Light Hospitality Pvt.
Ltd. Impugned order dated 09.11.2017 is relied. Accordingly, this is
not a case of error, mistake or omission on the part of Assessing
Officer. The Assessing Officer had intentionally issued notice under
Section 147/148 of the Act to M/s Sky Light Hospitality Pvt. Ltd. and
not in the name of Sky Light Hospitality LLP.
(iii) There is lack of live nexus and "reasons to believe" are mere
reasons to suspect that do not establish that income had escaped
assessment.
4. The respondent has contested the contentions raised. Error or
W.P.(C) 10870/2017 Page 2 of 19
mistake in addressing the notice under Section 147/148 of the Act to M/s
Sky Light Hospitality Pvt. Ltd. was not a jurisdictional error, but an
irregularity and procedural lapse. Section 292B is relied and is applicable.
No prejudice has been caused. The assessment proceedings are pending
and would be decided on merits. Reasons to believe are elaborate and
detailed and reflect honest and objective belief that income has escaped
assessment.
5. In the present case, the return for the assessment year 2010-2011
filed by M/s Sky Light Hospitality Pvt. Ltd. was processed under Section
143(1) of the Act and was not subjected to scrutiny assessment.
6. We begin by referring to the reasons to believe. The relevant portion
of the reasons to believe read as under:-
"1. A Tax Evasion Petition (TEP) has been sent by ADIT
lnv, Unit-3(1), Delhi vide F.No./ADIT(Inv.)/U-3(1)/2016-
17/563 regarding the assessee.
(a). Brief facts of the case: The assessee was previously
called M/s Sky Light Hospitality Pvt Ltd. is presently known
as M/s Sky Light Hospitality LLP having converted into LLP
from company on 13.05.2016 under Limited Liability
Partnership Act, 2008.
(b). The assessee entered into purchase of property with M/s
Omkareswar Properties Pvt Ltd. situated at Mauja
Shikohpur on 28.01.2008 for which payment was done
against purchase of land on 09.08.2008 (vide cheque no.
0978951 amounting to Rs. 7,95,00,000/·) and for license fee
paid to Haryana Govt through Omkareshwar properties
(Rs. 7,43,44,500/- on 11.08.2008). Further, then the
W.P.(C) 10870/2017 Page 3 of 19
assessee entered into a collaboration agreement, dated
05.08.2008, with M/s DLF Retail Developers Ltd. (herein
referred to as "DLF") to construct commercial complex
with its own investment (DLF's) and in return DLF was
entitled to retain 50% of the total super area and Qther
50% to be retained by the assessee. The assessee received
amounts of Rs. 5 crores on 03.06.2008 and Rs. 10 crores on
27.03.2009 under the agreement. Further, another
agreement was entered on 07.10.2009 (FY 2009-10
pertaining to AY 2010-11), whereby it was provided that
due to adverse market conditions and slowdown in the
economy, the land owner had agreed to transfer entire
development rights and all other rights in favour of
developer (DLF) on receipt of entire consideration of Rs. 58
crores. Thus, further Rs. 35 crores were received on
07.10.2009 (during FY 2009-10 pertaining to AY 2010·11).
Balance of Rs. 8 crores were received on 25.07.2012. It is
also to be noted that the possession of above land was
handed over by the assessee to DLF on 05.08.2008.
(c). From the above and on the basis of submissions made
by the assessee during assessment proceedings of AY 2013-
14, it is found that the assessee had claimed to have
received advance of Rs. 5 crores from DLF even before the
purchase of land, for which agreements were signed later.
Further, assessee after purchasing the said land made
payment to· convert the land from agricultural use to non-
agricultural use. Also, the collaboration agreement entered
with the DLF (from which it had taken loan to buy the land)
was done in a short time and sold 50% rights. Further along
with looking the agreement dated 07.10.2009 it should be
understood that the assessee went into a business agreement
to make quick business profit with DLF. Thus, in all the
amounts received are the business profits which has
escaped assessment in the respective year.
(d). Further, assesse had contributed Rs. 35,00,00,000/· to
the capital of M/s Saket Courtyard Hospitality vide cheque
no. 411355 dated 16.3.2010 drawn on Standard Chartered
Bank. However, a loss of Rs. 3,27,55,695/- was allocated by
firm to the assessee and net capital decreased to Rs.
W.P.(C) 10870/2017 Page 4 of 19
31,72,43,305/-. The assessee has also not been able to
satisfactorily explain the source of Rs. 35,00,00,000/-.
(e). Thus, the amount of Rs. 35,00,00,000/- received by the
assessee during FY 2009-10 (pertaining to AY 2010-11) has
escaped assessment.
(f). Further, assessee had purchased land at Bikaner for a
consideration of Rs. 79,56,530/- for which the source of
money has not be satisfactorily explained in reply to
summons by the investigation. Thus, the above amount of
Rs. 79,56,530/- has escaped assessment
2. In view of the above peculiar facts the undersigned has
reason to believe that the income of the assessee has
escaped assessment as per the provisions stipulated in
Explanation2 (b) to Section 147 of the Act which
reproduced below:
"where a return of income has been furnished by the
assessee but no assessment has been made and it is noticed
by the Assessing Officer that the assessee has understated
the income or has claimed excessive loss, deduction,
allowance of relief in return;"
XXXXX
6. In view of the above case laws and the material available
on record, it is evident that there is a "Live Link" between
the material available on record and the escaped income, as
mentioned in the above case laws.
7. Considering the factual matrix, Information received,
statutory provisions and legal principles, the undersigned
has reason to believe that the assessee has not disclosed
fully and truly material facts necessary or assessment and
there has been an escapement of income to the tune of Rs.
35,79,76,530/· or more chargeable to tax for the assessment
year 2010·11 and hence it is a fit case for initiation of
proceedings in terms of section 147 of the I.T. Act,1961.
W.P.(C) 10870/2017 Page 5 of 19
8. Accordingly, necessary approval u/s 151 of the l.T. Act,
196l is solicited for issuance of notice u/s 148 of the l.T. for
Assessment Year 2010-11."
7. The "reasons to believe" mention that M/s Sky Light Hospitality Pvt.
Ltd. who had filed the return for the assessment year 2010-2011, was
converted into limited liability partnership on 13.05.2016 under the Limited
Liability Partnership Act, 2008. Thus, it is accepted, is factually correct.
Reference is made to the Tax Evasion Report received from the
Investigation Unit of the Income Tax Department. Peculiar and specific
details relating to transactions between the assessee and third party are
mentioned in paragraph (b). Facts were ascertained by the Investigation
Unit. Paragraph (c) of the "reasons to believe" refers to the Assessment
Order for the year 2013-2014 and the findings recorded. Copy of the said
Assessment Order has been placed on record and was passed on
31.03.2016. In paragraph (d) and (e) reference is made to contribution of
Rs.35 crores towards capital in another concern. As per Profit and Loss
account, the assessee had suffered loss of Rs.3.27 crores and the net capital
had decreased to Rs.31.72 crores. The assessee as per Tax Evasion Report
had not been able to satisfactorily explain source of Rs. 35 crores.
Accordingly, this amount of Rs.35 crores had escaped from assessment.
Paragraph (f) refers to purchase of land at Bikaner for Rs.79,56,530/-.
Source of money for purchase of this land had not been satisfactorily
W.P.(C) 10870/2017 Page 6 of 19
explained before the Investigation Unit.
8. Tax Evasion Report received from the Investigation Unit dated
17.03.2017 placed on record is detailed and elaborate. We are not
reproducing the report or its contents as this is not required and necessary.
9. After going through the reasons, we are satisfied that the "reasons to
believe" show and establish a live link and connect with the inference
drawn that income had escaped assessment, which is required for issuance
of notice under Section 147/148 of the Act. Reasons to believe refer to
several facts and information that had come to knowledge and was
available with the Assessing Officer. At this stage, when notice is issued
under Section 147/148 of the Act, firm and conclusive findings are not
required for merits would be examined and thereafter final finding recorded
in the assessment order. As long as, there is honest and reasonable opinion
formed by the Assessing Officer and the "reasons to believe" are not mere
"reasons to suspect", the courts should not interject to stop the adjudication
process and scrutiny on merits. Absolute certainty is not required at the
time of issue of notice and at the same time, "reasons to believe" must not
be based on mere suspicion, gossip or rumour. The said test and criteria,
we have no hesitation in holding, is satisfied in the present case. There is
evidence and material on record to justify issue of notice under Section
147/148 of the Act.
W.P.(C) 10870/2017 Page 7 of 19
10. Next question relates to validity of notice issued in the name of the
M/s Sky Light Hospitality Pvt. Ltd. The notice had also mentioned the
PAN Number of the said company. The legal position is that this company
had ceased to exist and was dissolved upon conversion into a limited
liability partnership as per Section 56 of the Limited Liability Partnership
Act, 2008 with effect from 13.05.2016.
11. There is substantial and affirmative material and evidence on record
to show that issue of notice in the name of M/s Skylight Hospitality Pvt.
Ltd. was a mistake. Conversion of the private limited company into a
limited liability partnership with effect from 13.05.2016 was noticed and
mentioned in the tax evasion report, the reasons to believe recorded by the
Assessing Officer, the approval obtained from the Principal Commissioner
and the order under Section 127 of the Act. PAN number of the limited
liability partnership was also mentioned in some of these documents. The
error or mistake was that the notice did not record the aforesaid conversion
of M/s Skylight Hospitality Pvt. Ltd. into M/s Skylight Hospitality LLP. In
fact, the notice under Section 147/148 of the Act was not in conformity
with the file noting, i.e., "reasons to believe" and approval from the
Principal Commissioner.
12. The petitioner relying on the impugned order dated 19 th
November, 2017 had submitted that the Assessing Officer did not accept
W.P.(C) 10870/2017 Page 8 of 19
the said mistake and had asserted that the notice in the name of M/s
Skylight Hospitality Pvt. Ltd. was rightly issued. Reliance was placed on
the judgment of the Supreme Court in Mohinder Singh Gill & Anr. Vs.
Chief Election Commissioner, New Delhi & Ors., (1978) 1 SCC 405.
This contention is flawed and without merit. Assessing Officer in the order
dated 19.11.2017 has tried to defend the notice issued in the name of M/s
Skylight Hospitality Pvt. Ltd., whereas the legal position is that the said
company had ceased to exist and had been converted into a limited liability
partnership, a factum recorded in the tax evasion report, the reasons to
believe, the approval granted by the Principal Commissioner and the order
under Section 127 of the Act. Attempt by the Assessing Officer to justify
and explain why notice was issued in the name of M/s Skylight Hospital
Pvt. Ltd. would not obliterate and erase the aforesaid factual position.
This error and mistake has led to this litigation. We have to examine
whether this error and mistake is fatal or protected and shielded under
Section 292B of the Act. The respondent relies on the statutory provision
because of the error and mistake. Aid and reliance on a statutory provision,
if applicable, cannot be denied for the reasoning and justification given in
the order dated 19.11.2017.
13. Section 292B of the Act, enacted by Tax Laws (Amendment) Act,
1975, reads:-
W.P.(C) 10870/2017 Page 9 of 19
"292-B. Return of income, etc., not to be invalid on certain
grounds.-- No return of income, assessment, notice,
summons or other proceeding, furnished or made or issued
or taken or purported to have been furnished or made or
issued or taken in pursuance of any of the provisions of this
Act shall be invalid or shall be deemed to be invalid merely
by reason of any mistake, defect or omission in such return
of income, assessment, notice, summons or other proceeding
if such return of income, assessment, notice, summons or
other proceeding is in substance and effect in conformity
with or according to the intent and purpose of this Act."
The said provision had come up for consideration before a Division
Bench of this Court in Commissioner of Income Tax Vs. M/s Jagat Novel
Exhibitors Pvt. Ltd., (2013) 356 ITR 559 (Del). After extensive
examination of the case law, one of us (Sanjiv Khanna J.) had held:-
" 28. The aforesaid provision has been enacted to curtail and
negate technical pleas due to any defect, mistake or
omission in a notice/summons/return. The provision was
enacted by Tax Laws (Amendment) Act, 1975 with effect
from 1st October, 1975. It has a salutary purpose and
ensures that technical objections, without substance and
when there is effective compliance or compliance with intent
and purpose, do not come in the way or affect the validity of
the assessment proceedings. In the present case, as noticed
above, the respondent took the plea before the Assessing
Officer that they were never served with the notices under
Section 148 of the Act. However, it is prudent to note that
according to the Assessment Order dated 22nd March 2002,
a letter dated 1st March 2002 was submitted by the company
wherein it was stated that the returns filed on 10th December
1999, may be treated as filed in response to notice under
Section 148 of the Act. Further, a letter dated 18th March
2002 was submitted and some details, called for in the
questionnaire, which was sent along with another notice
dated 7th March 2002 under Section 142(1) and 143(2) of
W.P.(C) 10870/2017 Page 10 of 19
the Act, were submitted. The respondent had only
challenged the service of notice and not their validity before
the Assessing Officer. Before the appellate authority,
however, the respondent took the plea that the notices under
Section 148 were defective as the words "Private Limited"
were missing. The photocopies of the original notices have
been placed on record and show that after the words ,,Jagat
Novel Exhibitors some alphabets, which according to the
appellant read as ,,PL, have been mentioned in the notices
for assessment years 1992-93 to 1995-96. As far as notice
under Section 148 for the assessment year 1989-90 is
concerned, the words "Pvt. Ltd." are clearly stated. The
address mentioned on all notices is 1489, Chandni Chowk,
Delhi. This is the correct address of the respondent. The
tribunal has not accepted the plea of the respondent
assessee that the notice under Section 148 of the Act was
not duly served as the said notices were sent under
registered post at the aforesaid address. It is not the case of
the respondent that there was any other firm/concern at the
same address by the name of Jagat Novel Exhibitors. In the
present case, we do not think that failure to mention the
words ,,Principal Officer and the specific words ,,Pvt. Ltd.
or the use of the abbreviation ,,P.L has caused or could
have caused any confusion or has resulted in vagueness
which justifies the quashing of the entire assessment
proceedings and the consequent assessment orders.
29. Object and purpose behind Section 292-B is to ensure
that technical pleas on the ground of mistake, defect or
omission should not invalidate the assessment proceedings,
when no confusion or prejudice is caused due to non-
observance of technical formalities. The object and purpose
of this Section is to ensure that procedural irregularity(ies)
do not vitiate assessments. Notice/summons may be
defective or there may be omissions but this would not make
the notice/summon a nullity. Validity of a summon/notice
has to be examined from the stand point whether in
substance or in effect it is in conformity and in accordance
with the intent and purpose of the Act. This is the purport of
Section 292B. Notice/summons are issued for compliance
and informing the person concerned, i.e the assessee.
Defective notice/summon if it serves the intent and purpose
of the Act, i.e to inform the assessee and when there is no
W.P.(C) 10870/2017 Page 11 of 19
confusion in his mind about initiation of proceedings under
Section 147/148 of the Act, the defective notice is protected
under Section 292B. In such circumstances, the defective
notice/summon is in substance and in accordance with the
intent and purpose of the Act. The primary requirement is to
go into and examine the question of whether any prejudice
or confusion was caused to the assessee. If no
prejudice/confusion was caused, then the assessment
proceedings and their consequent orders cannot and should
not be vitiated on the said ground of mistake, defect or
omission in the summons/notice."
14. This judgment had also made reference to decision dated 11 th
November, 2011 in ITA No.1525/2010, Venad Properties Pvt. Ltd. Vs.
Commissioner of Income Tax, in which Section 282 of the Act relating to
service of notices was considered and examined. This section on
description/inscription on notice and method/mode of service was held to
be procedural in nature and should be interpreted in a practical and
pragmatic manner. Procedural rules and requirements were meant to
deliver justice and not to hamper cause of justice and lead to miscarriage of
justice.
15. The following paragraphs from M/s Jagat Novel Exhibitors Pvt. Ltd.
(supra) on objective behind issue of notice, in consequential defect and
purpose behind 292-B of the Act are also relevant :-
"42. In Commissioner of Income Tax v. Anand and
Company (1994) 207 ITR 418 (Cal.), it has been observed
as under:-
W.P.(C) 10870/2017 Page 12 of 19
"In our view, the Tribunal has taken an unduly technical
view of the whole matter. The judiciary in this country has
never gone on technical triviality. Even in the litigation of
private parties, the courts have shown a wide measure of
forgiveness in similar acts of omission or failure as pointed
out by learned counsel for the Revenue. (See Gouri Kumari
Devi's case [1959] 37 ITR 220). At page 223 of the Reports,
the Patna High Court has observed as follows:
"With regard to the analogous provisions of Order 6, rule
14, there is authority for the view that the omission or
failure on the part of the plaintiff to sign the plaint is a mere
irregularity which can subsequently be rectified and the
omission is not a vital defect. That is the view expressed by
the Judicial Committee in Mohini Mohun Das v. Bungsi
Buddan Saha Das [1889] ILR 17 (Cal) 580 and by the
Madras High Court in Lodd Govindoss Krishnadas
Varu v. P. M. A. R. M. Muthiah Chetty, AIR 1925 Mad
660."
XXX XXX XXX
43. In Hind Samachar Limited v. Union of India (2011) 330
ITR 266 (P&H) reference was made to Section 292B and
Section 139(9) of the Act. In the said case, return of income,
filed by the company was signed by someone other than the
authorized person. It was observed that the question was of
removal of defect, which could be rectified. Reference was
made to another decision of the Punjab and Haryana High
Court in CIT v. Norton Motors [2005] 275 ITR 595.
44. Bombay High Court in Prime Securities Ltd. v. Varinder
Mehta, Assistant Commissioner of Income-tax (2009) 317
ITR 27 (Bom) has observed that Section 292B of the Act
makes it clear that a return of income shall not be treated as
invalid merely by reason of any mistake, defect or omission
,if the return of income is in substance and effect in
conformity with or according to the intent and purpose of
the Act. The return of income, if not signed by the
authorized signatory, as contemplated under Section 140 of
the Act, would be a mistake, defect or omission stated in
Section 292B of the Act.
45. We may note, observations of the Supreme Court
in Balchand v. ITO (1969) 72 ITR 197 (SC) wherein it was
W.P.(C) 10870/2017 Page 13 of 19
held that in construing a statutory notice, extraneous
evidence may be looked into to find out whether the
technical defects or lacuna had any effect on the validity of
the notice. The facts had revealed that though there were
defects in drafting the preamble of the notice, it did not
affect its validity as the notice itself clearly informed the
assessee that he had to file a return of income for the
relevant year.
46. In Chief Forest Conservator, Government of Andhra
Pradesh v. Collector (2003) 3 SCC 472, the Supreme Court
examined the question of misdescription or misnomers of
parties and the effect thereof and it was held as under:-
"12. It needs to be noted here that a legal entity -- a
natural person or an artificial person -- can sue or be sued
in his/its own name in a court of law or a tribunal. It is not
merely a procedural formality but is essentially a matter of
substance and considerable significance. That is why there
are special provisions in the Constitution and the Code of
Civil Procedure as to how the Central Government or the
Government of a State may sue or be sued. So also there are
special provisions in regard to other juristic persons
specifying as to how they can sue or be sued. In giving
description of a party it will be useful to remember the
distinction between misdescription or misnomer of a party
and misjoinder or non-joinder of a party suing or being
sued. In the case of misdescription of a party, the court may
at any stage of the suit/proceedings permit correction of the
cause-title so that the party before the court is correctly
described; however, a misdescription of a party will not be
fatal to the maintainability of the suit/proceedings. Though
Rule 9 of Order 1 CPC mandates that no suit shall be
defeated by reason of the misjoinder or non-joinder of
parties, it is important to notice that the proviso thereto
clarifies that nothing in that Rule shall apply to nonjoinder
of a necessary party. Therefore, care must be taken to
ensure that the necessary party is before the court, be it a
plaintiff or a defendant, otherwise, the suit or the
proceedings will have to fail. Rule 10 of Order 1 CPC
provides remedy when a suit is filed in the name of the
wrong plaintiff and empowers the court to strike out any
W.P.(C) 10870/2017 Page 14 of 19
party improperly joined or to implead a necessary party at
any stage of the proceedings."
47. One of the questions, which arises for consideration, in
such cases is whether there was prejudice. The test to be
applied is whether the party receiving the notice would be in
doubt whether the said notice is meant for him or not. If the
recipient of notice was not in doubt that it was meant for
him, the misnomer or misdescription is not fatal. Thus
failure to mention the words "Principal Officer" on the
notices is not fatal."
16. In M/s Jagat Novel Exhibitors Pvt. Ltd. (supra), reference was
made to Mahadev Govind Gharge v. Special Land Acquisition Officer,
Upper Krishna Project, Jamkhandi, Karnataka, (2011) 6 SCC 321,
Sardar Amarjit Singh Kalra v. Pramod Gupta, (2003) 3 SCC 212 and
State of Punjab v. Shamlal Murari, (1976) 1 SCC 719. Several decisions
including Commissioner of Income Tax, Andhra Pradesh v. K.
Adinarayana Murty, (1967) 65 ITR 607 (SC) and Commissioner of
Income Tax, Gujarat II v. Kurban Hussain Ibrahimji Mithiborwala,
(1971) 82 ITR 821 (SC) referred to by the assessee to support his
contention that Section 292B of the Act should not be invoked as the
notices issued were defective and had not correctly described the assessee,
were dealt with and distinguished.
17. In the context of the present writ petition, the aforesaid ratio is a
complete answer to the contention raised on validity of the notice under
W.P.(C) 10870/2017 Page 15 of 19
Section 147/148 of the Act as it was addressed to the erstwhile company
and not to the limited liability partnership. There was no doubt
and debate that the notice was meant for the petitioner and no one else.
Legal error and mistake was made in addressing the notice. Noticeably, the
appellant having received the said notice, had filed without prejudice
reply/letter dated 11.04.2017. They had objected to the notice being issued
in the name of the Company, which had ceased to exist. However, the
reading of the said letter indicates that they had understood and were
aware, that the notice was for them. It was replied and dealt with by them.
The fact that notice was addressed to M/s Sky Light Hospitality Pvt. Ltd., a
company which had been dissolved, was an error and technical lapse on the
part of the respondent. No prejudice was caused.
18. Petitioner relies on Spice Infotainment Ltd. vs. Commissioner of
Service Tax, (2012) 247 CTR 500. Spice Corp. Ltd., the company that had
filed the return, had amalgamated with another company. After notice
under Section 147/148 of the Act was issued and received in the name of
Spice Corp. Ltd., the Assessing Officer was informed about amalgamation
but the Assessment Order was passed in the name of the amalgamated
company and not in the name of amalgamating company. In the said
situation, the amalgamating company had filed an appeal and issue of
validity of Assessment Order was raised and examined. It was held that the
W.P.(C) 10870/2017 Page 16 of 19
assessment order was invalid. This was not a case wherein notice under
Section 147/148 of the Act was declared to be void and invalid but a case
in which assessment order was passed in the name of and against a juristic
person which had ceased to exist and stood dissolved as per provisions of
the Companies Act. Order was in the name of non-existing person and
hence void and illegal.
19. Spice Infotainment Ltd.(supra) refers to decision of Allahabad High
Court in Sri Nath Suresh Chand Ram Naresh v. CIT, (2006) 280 ITR 396
(All). We have examined the decision in Sri Nath Suresh Chand Ram
Naresh (supra) and would observe that facts were peculiar. There was oral
partition of the Hindu undivided family, M/s Munna Lal Moti Lal, on death
of the ,,Karta, Moti Lal. Capital was divided amongst three brothers, who
were the coparceners. Controversy was regarding legality of oral partition
that was not recognized by the Revenue. Re-assessment notices were
issued, in the name of M/s Sri Nath Suresh Chand Ram Naresh, Karta Shri
Nath. ,,Nil return was filed along with letter stating that no business was
conducted in the name of the assessee and notices were wrongly issued.
Revenue had asserted that this notice was meant to assess M/s Munna Lal
Moti Lal though the notice was to another assessee, who was also existing
in law. Recording this factual matrix, the notice under Section 148 and
assessments made were held to be invalid.
W.P.(C) 10870/2017 Page 17 of 19
20. Commissioner of Income Tax v. Dimension Apparels Private
Limited, (2015) 370 ITR 288 (Del) and Commissioner of Income Tax v.
Intel Technology India (P.) Ltd., (2016) 380 ITR 272 (Kar) follow the
ratio and decision in the case of Spice Infotainment Ltd. (supra), as
assessment orders had been passed in the name of the non-existing
assessee. These cases are therefore distinguishable.
21. Our attention was drawn to Parashuram Pottery Works Co. Ltd. v.
ITO, Circle I, Ward A, Rajkot, (1977) 106 ITR 1 (SC) which records that
the Assessing Officer entrusted with the task of calculating and realising
tax should familiarise themselves with the relevant provisions and become
well versed with the law on the subject. This is a salutary advise. Indeed
there have been lapses and faults resulting in the present litigation. Notice
under Section 147/148 of the Act was issued at the end of the limitation
period. Noticeably, Assessment Order for the assessment year 2013-2014
was passed on 31.03.2016, one year earlier. Second lapse is also apparent.
Despite correctly noting the background, notice under Section 147/148 of
the Act was not addressed in the correct name and even the PAN Number
mentioned was incorrect. Nevertheless, human errors and mistakes cannot
and should not nullify proceedings which are otherwise valid and no
prejudice had been caused. This is the effect and mandate of Section 292B
of the Act.
W.P.(C) 10870/2017 Page 18 of 19
22. In view of the aforesaid discussion, we do not find any merit in the
present writ petition. We clarify that we have not expressed any opinion on
merits of the case. We also deem it proper and appropriate to record that
the petitioner had raised contention on merits, which we have no doubt
would be examined in depth and detail by the Assessing Officer. We
would expect that the Assessing Officer would deal with all issues
independently and fairly, without being influenced by this order and
challenge made by the petitioner to notice under Section 147/148 of the
Act. There would be no order as to costs.
23. To cut short delay, the petitioner would appear before the Assessing
Officer on 19.02.2018 when the date of hearing will be fixed.
SANJIV KHANNA, J
CHANDER SHEKHAR, J
FEBRUARY 02, 2018
b
W.P.(C) 10870/2017 Page 19 of 19
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