Law:

Section:

Section 222, read with sections 220 and 156, of the Income-tax Act, 1961 - Collection and recovery of tax - Certificate proceedings (Attachment of property) - Assessment year 2012-13 - Whether where no assessment order was passed against petitioner assessee nor any notice of demand was issued, it was not an assessee or deemed assessee or a default assessee and, therefore, recovery proceedings initiated against it by attaching movable property were illegal and invalid - Held, yes [Paras 8, 9, 10, 11 and 12] [In favour of assessee] FACTS â–  The petitioner assessee had been incorporated under the provisions of Companies Act, 2013 on 30-5-2014 and carrying on the business on behalf of the State of Telangana in respect of sale of liquor. â–  On 27-2-2015, the prohibitory orders and warrant of attachment of movable property were issued restraining the petitioner from selling the liquor stock, which was the property of State of Telangana. The prohibitory orders stated that the petitioner was the successor in business of company 'L' under the provisions of Andhra Pradesh Reorganisation Act, 2014. It was alleged in the prohibitory and attachment orders issued under rule 26(1)(iii) of the Second Schedule to the Act that certain proportionate amount was due from the petitioner for the assessment year 2012-13. â–  On writ petition, the petitioner contended that it had neither received any copy of assessment orders for the assessment year in question nor a notice of demand was served upon it as required under section 156 and therefore, the respondents had no jurisdiction to commence the tax recovery proceedings. HELD â–  From the records, it is an undisputed position that the petitioner came into being as a company and as such it is separate legal entity, on being incorporated on 30-5-2014. Tax dues in relation to which recovery is sought to be made concern with financial year 2011-12 and assessment year 2012-13. At that time the petitioner was not in existence. Admittedly the petitioner is not an assessee nor a deemed assessee or a default assessee. No assessment order was passed against it nor any notice of demand was issued. [Para 8] â–  Going…

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