The Bombay High Court has quashed the reassessment proceedings against non-existent entities despite an active PAN.
“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. That, in our view, 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,” the bench of Justice K. R. Shriram and Justice Neela Gokhale stated.
The petitioner/assessee challenged a reassessment notice on the ground that all the notices had been issued to a non-existing entity. The notice, i.e., Diversey India Private Limited (DIPL), got amalgamated with the petitioner with effect from April 1, 2015. A letter dated May 12, 2016, was addressed to the Assessing Officer (AO) and Principal Commissioner, informing them about the amalgamation.
The department contended that the defence taken is for AY 2012–13 and AY 2013–14. When the notices under Section 148 were served, the petitioner did not protest and participated in the reassessment proceedings. The PAN of the noticeer was not deactivated.
The assessee contended that a 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.
The court disposed of the writ petition by quashing the reassessment notices.