SUNIL P. DESHMUKH, J. :
Rule. Rule made returnable forthwith. Heard learned senior advocate Mr. J.D. Mistri for the petitioner and Mr. Sham Walve advocate for respondent-State finally by consent.
2. The petition questions propriety, legality and validity of notice dt. 30th March, 2019 issued by respondent No. 1-the Asstt. CIT, Delhi pursuant to s. 148 of the IT Act, 1961 for the asst. yr. 2012-13; and order dt. 31st Dec., 2019 passed under s. 144 r/w s. 147 of the Act in the name of M/s Tecnovate Esolutions (P) Ltd.
3. Mr. J.D. Mistri, learned senior advocate for the petitioner draws our attention to the factual events that, M/s Tecnovate Esolutions (P) Ltd. (for short "TSPL") was a registered company engaged in business of providing back office support services/remote data entry services for customers in and outside India. Under order dt. 11th Feb., 2011, a scheme of amalgamation of aforesaid company with M/s Intelnet Global Services (P) Ltd., was approved w.e.f. 1st April, 2010 and since then the aforesaid TSPL ceased to exist. Subsequently, M/s Intelenet Global Services (P) Ltd. amalgamated with M/s Serco BPO (P) Ltd. Thereafter there had been change in the name w.e.f. 11th Jan., 2016 from M/s Serco BPO (P) Ltd. to M/s Intelnet Global Services (P) Ltd. There had been a further change in the name from M/s Intelenet Global Services (P) Ltd. to Teleperformance Global Services (P) Ltd. (TGSPL) w.e.f. 12th Feb., 2019. He submits that as such, petitioner is successor of M/s Tecnovate Esolutions (P) Ltd.
4. It has been referred to that post amalgamation, for asst. yr. 2012-13 M/s Intelenet Global Services (P) Ltd. filed its IT returns on 30th Nov., 2012 and revised its return on 31st March, 2014 for the period 1st April, 2011 to 6th July, 2011. Its assessment was completed under s. 143(3) of the Act vide order dt. 23rd Sept., 2016. M/s Intelenet Global Services (P) Ltd. had filed returns for the period from 7th July, 2011 to 31st March, 2012 on 30th Nov., 2012 and revised returns on 31st March, 2014. Its assessment had been completed under s. 143(3) of the Act under order 31st Jan., 2017.
5. Notice dt. 30th March, 2019 under s. 148 of the Act for the asst. yr. 2012-13 in the name of TSPL had been issued by respondent No. 1 directing to file return of income within thirty days stating there is reason to believe that income chargeable to tax had escaped assessment,, without realising that said company was a non-existing entity.
6. He submits, petitioner became aware of aforesaid notice based on telephonic conversation of respondent No. 1 with an employee of petitioner in second week of September, 2019. petitioner had filed a letter dt. 18th Sept., 2019 stating that TSPL has been amalgamated w.e.f. 1st April, 2010 and since then said company has ceased to exist, and as such, there is no question of filing returns of income for asst. yr. 2012-13 by said company. The then company M/s Intelenet Global Services (P) Ltd. had duly filed returns of income for all the subsequent assessment years, and had as such submitted that the notice had been issued on misconception and appears to be an inadvertent error. In ensued telephonic conversation with respondent No. 1, the petitioner was advised to file online response. While attempts had been unsuccessful and portal was not letting petitioner to upload any document including reply, reply had been submitted via email on 29th Nov., 2019, enclosing a separate letter of even date. Petitioner had submitted that even after merger, some times the payers make payment to the petitioner, however, erroneously, continue to mention the PAN of erstwhile company and accordingly said deduction is reflected in the 26AS of erstwhile company and not petitioner company, and petitioner in its return considered all such payments and claimed all such deduction. As such, there is no question of escaping assessment for the asst. yr. 2012-13.
7. It is contended that without considering the reply or even referring to the telephonic conservation of petitioner with respondent No. 1, assessment order dt. 31st Dec., 2019 for the asst. yr. 2012-13, under s. 144 r/w s. 147 of the Act, in the name of TSPL computing total income at Rs. 14,50, 95,452 was passed. It has been referred to that respondent No. 1 purports to allege that petitioner had neither filed response to the show-cause notice nor filed returns of income for relevant assessment year. As per 26AS statement, taxes have been deducted with respect to transactions amounting to Rs. 14.51 crores, hence, the same is treated as taxable under the provisions of the Act.
8. Petitioner on realising that assessment order dt. 31st Dec., 2019 had been passed against M/s Tecnovate Esolutions (P) Ltd., the petitioner is constrained to file writ petition, challenging notice dt. 30th March, 2019 and assessment order dt. 31st Dec., 2019.
9. Mr. Mistri, learned senior counsel submits that while the facts are indisputable, impugned notice dt. 30th March, 2019 and impugned order dt. 31st Dec., 2019 for asst. yr. 2012-13 in the name of M/s Tecnovate Esolutions (P) Ltd. are clearly without jurisdiction. He submits that having ragard to the amalgamations w.e.f. 1st April, 2010 onwards petitioner is the only company in existence and subsequent to period of the merger, any proceedings could be initiated only by officer having jurisdiction over the petitioner i.e. respondent No. 3 and not respondent No. 1. Impugned notice issued for the period viz. asst. yr. 2012-13 after the amalgamation is clearly outside the scope of jurisdiction of respondent No. 1. He refers to the letters dt. 18th Sept., 2019 and 29th Nov., 2019 as well as e-mails dt. 16th Oct., 2019. He submits that despite aforesaid, the decision purports to consider that impugned notice has not been responded to. He submits that there is not even a whisper about the objection by petitioner to the notice and the proceedings. He submits that no assessment or reassessment proceedings can be initiated against a person not in existence during the relevant period. Thus the impugned notice and impugned order are absolutely without jurisdiction. He submits that it has been ignored that M/s Tecnovate Esolutions (P) Ltd. had not been in existence w.e.f. 1st April, 2010 for the financial year 2011-12. He submits that M/s Intelenet Global Services (P) Ltd. had already filed returns of income for the asst. yr. 2012-13 and assessment completed under s. 143(3) of the Act. In the circumstance, there is no question of assessment being reopened or the assessment order being passed in the name of erstwhile company.
10. He submits, petitioner was not afforded any opportunity of hearing. Notice dt. 4th Dec., 2019 was not served on the petitioner, even the same was not uploaded on the e-portal. The impugned notice and the impugned order of assessment are in breach of principles of natural justice. He thereafter, urges to allow the petition, quashing and setting aside impugned notice dt. 30th March and the impugned order dt. 31st Dec., 2019.
11. Respondent No. 4 has submitted its reply. The petition is resisted contending that notice dt. 30th March, 2019 and assessment order dt. 31st Dec., 2019 for asst. yr. 2012-13 are legal and sustainable as per the provisions of the Act. It is contended that petitioner as successor entity had been responsible to reply the notices including show-cause notice issued on 4th Dec., 2019 through ITBA system of the Department and the notices and orders were dispatched to the concerned assessee on its email-id which is registered with the Department for receiving such communications. It had been realized that the PAN of the entity TSPL had been apparently active in the database of the Department. It is being referred to that petitioner has appellate forum to approach against the order passed. It is further being referred to that jurisdiction over the company TSPL is with the Circle 25(1), Delhi. Thus, it is contended that petitioner is not entitled to any of the relief claimed, as such, petition is liable to be dismissed.
12. Learned counsel Mr. Walve for respondents vehemently submits that jurisdictional issue would arise in the petition since the order has been passed by the authority at Delhi.
13. Mr. J.D. Mistri, learned senior advocate lays particular emphasis on cl. (2) of Art. 226 of India, which reads as under :
"(2) The power conferred by cl. (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories."
14. He submits that there are lot of decisions throwing light on territorial jurisdiction of Courts. He refers to the case of Kusum Ingots & Alloys Ltd. vs. Union of India & Anr. AIR 2004 SC 2321 [LQ/SC/2004/631] wherein Supreme Court considered that even if a small fraction of cause of action accrues within the territorial jurisdiction of a Court, the Court is competent to entertain writ petition by virtue of cl. (2) of Art. 226 of the Constitution of India. It has been observed that if passing of a parliamentary legislation gives rise to civil or evil consequences, a cause for writ petition questioning constitutionality thereof arises and can be filed in any High Court. It is not so, a cause of action arises only when the provisions of the Act or some of them are implemented would give rise to civil or evil consequences to the petitioner. The seat of the Parliament or a State legislature would not be relevant factor for determining territorial jurisdiction of a High Court to entertain a petition. It has been held in the same that the material facts which are imperative for the suitor to allege and prove constitutes the cause of action.
15. It has also been referred to in said decision, para 24 thereof in using the terms ‘cause of action’, it has been considered that litigant who is the dominus litis to have his forum conveniens and litigant has the right to go to ‘a Court’ where part of cause of action arises.
16. Referring to the case of Vodafone India Ltd. & Ors. vs. Competition Commr. of India & Ors. (Writ Petn. No. 8594 of 2017 with connected matters, dt. 21st Sept., 2017), it is contended that it would not be a case at all jurisdiction to entertain the writ petition. It is being submitted that there is no denial to the factual aspects and as a matter of fact petitioner is being considered responsible being successor company, stationed at Mumbai. It is an entity at Mumbai and it cannot be said it is not afflicted by impugned order in Mumbai. Lot of correspondence ensued from Mumbai. Though order is passed in Delhi, it affects a person at Mumbai. As such, cause of action for petitioner has arisen in Mumbai.
17. Learned senior counsel also refers to a decision of this Court dt. 7th March, 2011 in the case of Wills India Insurance Brokers (P) Ltd. vs. Insurance Regulatory & Development Authority Writ Petn. No. 2468 of 2010 wherein it has been observed that part of cause of action has arisen within territorial jurisdiction of this Court. Referring to cl. (2) of Art. 226 of the Constitution, the Court observed that the petitioner’s registered office is located at Mumbai, it operates business from Mumbai. Since office of respondent No. 1 was located at Hyderabad, renewal application was required to be preferred at Hyderabad, it would not be a case that no part of cause of action can be said to have arisen within the territorial jurisdiction of the Mumbai Court. The case of Navinchandra Majithia vs. State of Maharashtra (2007) 7 SCC 640 had also been referred to wherein it has been held that High Court has jurisdiction if any part of the cause arisen within territorial limits of its jurisdiction, though the seat of Government or Authority or residence of person against whom direction, order or writ is sought to be issued is not within the territorial jurisdiction. It was considered that respondent had been located at Hyderabad where decision is taken in connection with renewal application, a person who is likely to be affected on the basis of such decision, can approach the Court where he is affected by such decision and it cannot be said that no part of cause of action arose within territorial jurisdiction of this Court.
18. Mr. Walve, learned counsel for respondents purports to refer to and rely upon a decision of this Court in the case of Principal CIT vs. Sungard Solutions (P) Ltd. (2019) 308 CTR (Bom) 22 [LQ/BomHC/2019/2963] : (2019) 176 DTR (Bom) 57 [LQ/BomHC/2019/2963] : (2019) 105 taxmann.com 67 (Bom). It appears that in said case, order by Tribunal in Bangalore was passed on 30th July, 2015. On 8th Sept., 2015 an order was passed under s. 127 transferring the assessee’s case from the AO at Bangalore to an AO at Pune and the appeal was filed in January, 2006 before this Court contending that situs of the AO would alone determine the High Court which would have jurisdiction over the orders of the Tribunal under s. 260A of the Act. At the time of appeal, seat of AO is at Pune therefore this High Court will have jurisdiction. Aforesaid submissions were opposed by the assessee contending that appeals to High Court are governed by Chapter XX of the Act. Sec. 260A provides appeals to High Court from every orders passed in appeal by Tribunal. Sec. 269 of the Act, defines the High Court of the State. It was contended that s. 127 of the Act deals with the jurisdiction of the authorities and would not control/decide and/or determine which High Court will be the appellate forum. Perusal of said decision shows that it was observed that ss. 260A and 269 read together would mean that the High Court referred to in s. 260A will be the High Court as provided/defined in s. 269 i.e. in relation to any State, the High Court of that State. It would be seen that in aforesaid matter, apart from distinguishable factual position, context had also been different. Decision of the supreme Court in the case of Alchemist Ltd. & Anr. vs. State Bank of Sikkim & Ors. AIR 2007 SC 1812 [LQ/SC/2007/359] is being referred to in support of contentions that this Court would not have jurisdiction. Said case appears to be on different factual background. It appears that appellant company had certain negotiations with respondent bank in respect of disinvestment of equity capital of the bank at place ‘S’. appellant was situated at place ‘C’. It was contended that while negotiations were held between appellant and respondent at the place ‘S’, yet letters of proposal and acceptance and also of rejection were communicated at the place ‘C’. Writ petition was filed against the rejection by appellant company had been dismissed by the High Court at ‘C’ for want of territorial jurisdiction and in appeal therefrom, the supreme Court had considered that it is not a case where essential, integral or material facts so as to constitute a part of ‘cause of action’ within the meaning of Art. 226(2) of the Constitution of India, in the High Court at place ‘C’.
19. In the present case, it is seen there is acceptance in reply on behalf of respondents that petitioner is a successor company of erstwhile M/s Tecnovate Esolutions (P) Ltd. and successor has its registered office at Mumbai and is stationed at Mumbai carrying in business. After impugned notice dt. 30th March, 2019, correspondence from the petitioner’s side ensued from September, 2019 onwards has not been disputed. It would not be said to be a case wherein no part of cause of action has arisen for the petitioner where petitioner would to be affected by impugned order, going by decisions referred to on behalf of petitioner. Having regard to facts and circumstances and the decisions, relied on, on behalf of the petitioner, it does not appear that resistance to the petition on the ground of jurisdiction would carry any efficacy.
20. Position emerges that there is no dispute on factual aspect that TSPL had been amalgamated into M/s Intelnet Global Services (P) Ltd. w.e.f. 1st April, 2010. As a matter of fact, same has been endorsed in the affidavit-in-reply filed on behalf of the respondents, referring to that petitioner is its ultimate successor. Thereafter, said company had also been submitting returns and those were assessed from time to time in respect of subsequent financial and assessment years. This aspect as well has not been disputed. So is the case in respect of averments appearing in para 4J.(c) of the petition to the following effect :
"(c) The petitioner submitted that even after merger, sometimes the payers make payment to the petitioner, however, erroneously continue to mention the PAN of the erstwhile company and not the petitioner’s company. However, the petitioner in its return of income consider all such payments and claim all such deduction. Therefore, there can be no question of any escaping assessment for the asst. yr. 2012-13."
21. During the course of submissions, learned senior counsel Mr. Mistri refers to decision of the Supreme Court of India in the case of Principal CIT vs. Maruti Suzuki India Ltd. (2019) 309 CTR (SC) 433 [LQ/SC/2019/1125] : (2019) 180 DTR (SC) 185 : (2019) 416 ITR 613 (SC) [LQ/SC/2019/1125] (Maruti Suzuki).
22. The Supreme Court in the case of Maruti Suzuki (supra) had considered that income, which was subject to be charged to tax for the asst. yr. 2012-13 was the income of erstwhile entity prior to amalgamation. Transferee had assumed liabilities of transferor company, including that of tax. The consequence of approved scheme of amalgamation was that amalgamating company had ceased to exist and on its ceasing to exist, it cannot be regarded as a person against whom assessment proceeding can be initiated. In said case before notice under s. 143(2) of the Act was issued on 26th Sept., 2013, the scheme of amalgamation had been approved by the High Court w.e.f. 1st April, 2012. It has been observed that assessment order passed for the asst. yr. 2012-13 in the name of non-existing entity is a substantive illegality and would not be procedural violation of s. 292(b) of the Act.
The Supreme Court in its aforesaid decision, has quoted an extract from its decision in Saraswati Industrial Syndicate Ltd. vs. CIT (1990) 88 CTR (SC) 61 : (1990) 186 ITR 278 (SC) . The Supreme Court has also referred to decision of Delhi High Court in the case of CIT vs. Spice Infotainment Ltd. (2018) 12 ITR-OL 134 (SC) and observed that in its decision Delhi High Court had held that assessment order passed against non-existing company would be void. Such defect cannot be treated as procedural defect and mere participation of appellant would be of no effect as there is no estoppel against law. Such a defect cannot be cured by invoking provisions under s. 292B. The Supreme Court had also taken note of decision in Spice Infotainment (supra) was followed by Delhi High Court in matters, viz. CIT vs. Dimension Apparels (P) Ltd. (2015) 370 ITR 288 (Del) , CIT vs. Micron Steel (P) Ltd. (2015) 117 DTR (Del) 89 : (2015) 233 Taxman 120 (Del) [LQ/DelHC/2015/427] ; CIT vs. Miscra India (P) Ltd. (2015) 231 Taxman 809 (Del) and in CIT vs. Intel Technology India (P) Ltd. (2016) 380 UTE 272 (Kar) Karnataka High Court has held, if a statutory notice is issued in the name of non-existing entity, entire assessment would be nullity in the eye of law. It has also been so held by Delhi High Court in the case of Principal CIT vs. Nokia Solutions & Network (P) Ltd. (2018) 164 DTR (Del) 198 : (2018) 253 Taxman 409 (Del) [LQ/DelHC/2018/318] : (2018) 402 ITR 21 (Del) [LQ/DelHC/2018/318] .
23. The Supreme Court in Spice Infotainment Ltd. vs. CIT (2012) 247 CTR (Del) 500 (sic) found that there is no reason to interfere with the impugned judgment of Delhi High Court and it found no merits in the appeal and special leave petition and were dismissed accordingly.
The Supreme Court had taken note of Revenue resistance contending that contrary position emerges from decision of Delhi High Court decision in Sky Light Hospitality LLP vs. Asstt. CIT (supra) and that it had been affirmed by the Supreme Court [ Sky Light Hospitality LLP vs. Asstt. CIT (2018) 303 CTR (SC) 130 [LQ/SC/2018/454] : (2018) 166 DTR (SC) 421 : (2018) 92 taxmann.com 93 (SC)]. However, the Supreme Court had also taken note of Sky Light LLP (supra) was in peculiar facts of the case, where the High Court had catgegorically concluded that there was clerical mistake within the meaning of s. 292B and the case had been distinguished by decisions of Delhi, Gujarat and Madras High Courts in Rajender Kumar Sehgal vs. ITO (2019) 306 CTR (Del) 264 [LQ/DelHC/2018/2802] : (2019) 173 DTR (Del) 251 : (2019) 260 Taxman 412 (Del) [LQ/DelHC/2018/2802] ; Chandreshbhai Jayantibhai Patel vs. ITO (2019) 308 CTR (Guj) 737 [LQ/GujHC/2018/1257] : (2019) 177 DTR (Guj) 451 : (2019) 261 Taxman 137 (Guj) [LQ/GujHC/2018/1257] and Alamelu Veerappan vs. ITO (2018) 304 CTR (Mad) 512 [LQ/MadHC/2018/3293] : (2018) 169 DTR (Mad) 434 : (2018) 257 Taxman 72 (Mad) [LQ/MadHC/2018/3293] .
24. In the circumstances, though the respondents refer to decision of Delhi High Court in case of Sky Light Hospitality LLP vs. Asstt. CIT (supra) it would be of little avail for the respondents. The decision in the case of Maruti Suzuki (supra) would hold sway over present facts and circumstances.
25. Foreoing discussion and decisions referred to on behalf of petitioner lead us to consider that petitioner has made out a case for reliefs and it would be appropriate to allow petition in terms of prayer cl. (a). Rule is made absolute in terms of prayer cl. (a). The writ petition is disposed of.