Principal Chief Commissioner directed to hold an enquiry against the concerned erring officers: Court started fixing the accountability
In a case of notice, proceedings and Order in the name of Non-existent Entity, the court has ordered to enquire and take action against the erring officer.
Even after apex court quashing notice issued in the name of non-existent entity in the case of Pr. CIT v. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375 (SC) , tax officers are continuing proceedings in the name of a non-existent entity.
In the recent case, the court has not only quashed re-assessment proceedings but also directed PCIT to hold inquiry against the officer within six months and take action, if found guilty. Further, a copy of the order will be sent to the law minister and chairman of CBDT for information and any action.
Court has given due weightage to the fact that assessee has informed about factum of such merger before initiation of the proceedings and also during the proceedings replies were made by the merged entity on behalf of transferor company. strangely, Order disposing of objection have not dealt with this contention of the assessee.
Nayara Energy Limited (Successor on amalgamation to Vadinar Power Co. Ltd.) Writ Petition No.59 Of 2020 BOM HC
“The Principal Chief Commissioner is directed to hold an enquiry against the concerned officers as to why despite being brought to their notice that Vadinar Power Company Limited is a non existing entity having been amalgamated with petitioner notices were continued to be issued in the name of Vadinar Power Company Limited and even the order disposing of the objections came to be passed in the name of Vadinar Power Company Limited resulting in the notice under Section 148 of the said Act itself being quashed. The Principal Chief Commissioner, after holding an enquiry, may take such action as required against the erring officers, if found guilty. The inquiry shall be completed within six weeks from today.”
A copy of this order be sent to the Principal Chief Commissioner, Mumbai and also sent to Chairman, CBDT and to the Law Minister (Government of India) for information and necessary action