WIPRO LTD V. THE DEPUTY COMMISSIONER

WP/9143/2023

AI Insights

The case involves Wipro Limited, the successor-in-interest of Appirio India Cloud Solutions Pvt. Ltd., challenging the validity of an order and notice issued under the Income Tax Act, 1961, for the assessment year 2019-20. The petitioner argued that the notices and orders were issued in the name of a non-existing company, Appirio India Cloud Solutions Pvt. Ltd., which had merged with Wipro Limited as per a scheme sanctioned by the NCLT. The court examined the legal implications of issuing notices and orders to a non-existing entity and referenced judgments from the Supreme Court and previous High Court decisions to conclude that such actions are procedurally and substantively illegal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 741494 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 06-07-2023
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd., Coffee Day Resorts (MSM) Pvt. Ltd. vs. The Deputy Commissioner of Income Tax and others
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: SANDEEP HUILGOL
• Keywords: Income Tax; Merger; Non-existing entity; Substantive illegality; Writ petition
• Section: 148; 148A(d); 226

Judgement Text

" - 1 - NC: 2023:KHC:23305 WP No. 9143 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF JULY, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 9143 OF 2023 (T-IT) BETWEEN: 1. WIPRO LTD (SUCCESSOR-IN-INTEREST OF APPIRIO INDIA CLOUD SOLUTIONS PVT. LTD.) A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1913 76P AND 80P, DODAKANNELLI, SARJAPUR ROAD, BENGALURU - 560 035 REPRESENTED HEREIN BY MR. NIKISH JAIN, ITS MANAGER … PETITIONER (BY SRI. SANDEEP HUILGOL., ADVOCATE) AND: 1. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 7(1)(1), BANGALORE BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BENGALURU - 560 095 2. THE PRINCIPAL COMMISSIONER OF INCOME-TAX-2, BANGALORE BMTC BUILDING, 80 FEET ROAD Digitally signed by B K MAHENDRAKUMAR Location: High Court of Karnataka - 2 - NC: 2023:KHC:23305 WP No. 9143 of 2023 6TH BLOCK, KORAMANGALA, BENGALURU - 560 095 3. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 7(1)(1), BANGALORE BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, KORAMANGALA, BENGALURU - 560 095 … RESPONDENTS (BY SRI. M. DILIP., ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASHING THE IMPUGNED ORDER DTD 31.03.2023 BEARING ITBA/AST/F/148A/2022-23/1051737744(1) PASSED BY R-1 UNDER SECTION 148A(D) OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2019-20 (ANNEXURE-A) AND ETC. THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner - Wipro Limited has sought for setting aside of the order under Section 148A(d) of the Income Tax Act, 1961 (for short 'the Act') for the assessment year 2019-20 at Annexure-A and has also sought for setting aside of the impugned notice dated 31.03.2023 at Annexure-B under Section 148 of the Act. - 3 - NC: 2023:KHC:23305 WP No. 9143 of 2023 2. It is the contention of the learned counsel for petitioner - Sri. Sandeep Huilgol, that the notice under Section 148A(b) at Annexure-K has been issued in the name of M/s. Appirio India Cloud Solutions Pvt. Ltd. and this is followed with an order under Section 148A(d) of the Act at Annexure-A passed in the name of M/s. Appirio India Cloud Solutions Pvt. Ltd. as regards the Assessment year 2019-20 while the said entity has merged with M/s. Wipro Limited - petitioner herein as per the scheme of arrangement sanctioned by the NCLT with the appointed date being 01.04.2018. Accordingly, it is submitted that no notice under Section 148A(b) could have been issued followed by the order under Section 148A(d) of the Act in the name of M/s. Appirio India Cloud Solutions Pvt. Ltd. which is a non-existing entity from 01.04.2018 onwards. 3. Reliance is placed on the judgment of the Apex Court in the case of Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd. reported in (2019) 107 taxmann.com 375 (SC), and the order of this - 4 - NC: 2023:KHC:23305 WP No. 9143 of 2023 Court in the case of Coffee Day Resorts (MSM) Pvt. Ltd., vs. The Deputy Commissioner of Income Tax and others - W.P.No.9594/2023 disposed off on 01.06.2023, to contend that the notice and assessment proceedings in the name of non-existing company would amount to a substantive illegality and the order passed against such non-existing entity is without jurisdiction. 4. Learned counsel for the petitioner also submits that in the reply at Annexure-L to the notice under Section 148A(b), this aspect of merger of M/s. Appirio India Cloud Solutions Pvt. Ltd. with M/s. Wirpro Limited was brought to the notice of respondent No.3 and the same was also referred in paragraph No.1 of the order at Annexure-A. 5. Heard both sides. 6. Taking note of the law laid down by the Apex Court in the case of Maruti Suzuki (supra), the legal position is settled that the notice and the order passed against the non-existing entity amounts to substantive - 5 - NC: 2023:KHC:23305 WP No. 9143 of 2023 illegality. Clearly, the merger of M/s. Appirio India Cloud Solutions Pvt. Ltd. was brought to the notice of respondent No.3 as per Annexure-L2 and even at a prior point of time, the intimation was made to the Assistant Commissioner of Income Tax, New Delhi on 29.03.2022 as per Annexure-H regarding M/s. Appirio India Cloud Solutions Pvt. Ltd. having merged with M/s. Wipro Limited. 7. In light of the undisputed facts relating to merger of M/s. Appirio India Cloud Solutions Pvt. Ltd. with M/s. Wipro Limited, question of issuing any notice after 01.04.2018 in the name of M/s. Appirio India Cloud Solutions Pvt. Ltd. would not arise. Accordingly, on this sole ground itself, the order at Annexure-A and the notice under Section 148 at Annexure-B are set aside. Needless to state that the respondent - authorities are at liberty to initiate appropriate proceedings as is open in law and permissible insofar as contents of the notice under Section 148A(b) as against the appropriate entity. All contentions of the petitioner are kept open. - 6 - NC: 2023:KHC:23305 WP No. 9143 of 2023 8. Writ petition is disposed off accordingly. Sd/- JUDGE VP "