• Notification Date: 11-03-2023
• Notification No: N/A

Notice u/s 148A(b) of IT Act issued against Non-Existing Entity declared Invalid

In a recent judgement the Calcutta High Court (HC) has held that the notice under section 148A(b) of the Income Tax Act, 1961 issued against a non-existing entity is not valid. Orbit Projects Private Limited, the petitioner has challenged the impugned notice under Section 148A(b) of the Income Tax Act, 1961 dated 27th May 2022, relating to the assessment year 2015-16 on the ground that the same has been issued on the name of the non-existing entity and which has already been amalgamated on 16th September 2019 with retrospective effect from 1st April 2018. 

Under section 148A the assessing officer must give the person being taxed more than seven days but less than thirty days to explain. The response from the taxpayer will help the income tax officer decide whether to send a notice for unreported income. A copy of the ruling and a notification must be sent to the taxpayer if the income tax officer chooses to reopen the matter. Discrepancies in the assessment of taxable income are disclosed in the notification. It was evident that against the very same non-existing entity, namely Swastik Promoters Private Limited a notice under Section 148 of the Income Tax Act was quashed by this court by the order dated 2nd March 2022. 

The assessing officer again issued the impugned notice dated 27th May 2022 against the very same non-existing entity. Such conduct reflects, total non-application of mind by the Assessing Officer, 2 namely Bitan Roy, Ward No.V(1), Kolkata, and rather it is contumacious also and in total disregard and defiance of earlier of the order of this court.  It also appears from the record that in respect of another assessee, this court has imposed the personal cost of Rs.10,000/- upon the very same Assessing Officer, While allowing the petition, Md. Nizamuddin, justice quashed the aforesaid impugned notice dated 27th May 2022, under Section 148A(b) of the Income Tax Act and all subsequent proceedings. Further imposed a personal cost of Rs.20,000/upon Bitan Roy, Ward No. V(1), Kolkata which is to be realised from his salary and to be paid to the petitioner.