Calcutta HC Rejects Application of IT Section 292B to Scrutiny Notice Issued in Amalgamating Company’s Name

Scrutiny Notice Was Issued In Amalgamating Company’s Name Despite Dept Knowing Of Amalgamation: Calcutta HC Declines To Apply S.292B Of Income Tax Act

The Calcutta High Court despite the Assessing Officer being aware of the company’s amalgamation has denied applying Section 292B of the Income Tax Act, 1961 to a scrutiny notice issued in an amalgamating company’s name.

Section 292-B furnishes that no notice or assessment or any proceedings could be regarded as invalid just for the cause of any mistake, defect, or omission in these notices, assessments, or other proceedings.

In a case, a division bench of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya marked that “the fact of amalgamation was well within the knowledge of the assessing officer.”

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Therefore it dismissed the department’s appeal which asked to argue that the notice issued in the earlier company’s name was a fixable defect.

It was asserted by the department that neither the taxpayer nor the amalgamating company notified the assessing officer of the scheme of amalgamation being approved via the Calcutta High Court (HC). They argued that the technical defect in not furnishing the notice in the amalgamated company’s name must not be given any weightage.

It laid on M/s. Mahagun Realtors (P) Ltd. where the assessment made in the name of the amalgamating company was carried to be valid by the Apex Court, as the fact of amalgamation was suppressed from the Assessing Officer (AO).

The court observed that in the causes to believe which was appended to the notice the assessing officer has directed to the information for the amalgamation.

It carried that “Therefore, the decision of the Hon’ble Supreme Court in PCIT Vs. Mahagun Realtors Pvt. Ltd. (supra) cannot be of any assistance to the facts and circumstances of the present case,” and dismissed the appeal.