In a recent decision, the Calcutta High Court ( HC ) single bench presided over by Justice Md. Nizamuddin rejected the procedure initiated under section 148A(b) of the Income Tax Act, 1961, and imposed a personal cost of 20,000 for twice serving the non-existent corporation with a show cause notice against the Income Tax Officer (ITO)
According to Section 148A(b), the assessee may get a show cause notice inquiring as to why an income escaping assessment notice cannot be issued against them.
The petitioner, Orbit Projects Private Limited challenged the SCN issued on 27th May 2022 on the ground that the same has been issued in the name of the non-existing entity and which has already been amalgamated on 16th September 2019 with retrospective effect from 1st April 2018.
The bench observed that as per the information from the record that against the very same non-existing entity, namely Swastik Promoters Private Limited a notice under Section 148 of the Act was quashed by this court. The Assessing Officer (AO) has issued the SCN twice to the non-existing entity.
Furthermore, it also appears from past records that in respect of another assessee, this court has imposed the personal cost of Rs.10,000 upon the very same AO.
The bench resolved to dismiss the SCN and all the following proceedings after analyzing the circumstances and the submission.
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