Erangal Comtrade and Consultancy LLP (successor to Erangal Comtrade Pvt. Ltd.) v. ACIT

Case snapshot

Sections / provisions: 148

Questions before the Court / Tribunal

• Reassessment notice issued to company converted into LLP: The reported High Court decision treats a reassessment notice addressed to a company that had ceased to exist after conversion into an LLP as invalid. The official judgment should supply the conversion chronology and notice details.

Material facts and background

issued under section 148 of the Income Tax Act, 1961 [“IT Act”]. This notice was issued to a company called “Erangal Comtrade and Consultancy Private Limited” [hereinafter referred to as the “erstwhile company”], which ceased to exist with effect from 17th March 2016 after its conversion into the Petitioner LLP [Erangal Comtrade and Consultancy LLP]. The impugned notice issued under section 148 seeks to reassess the income of the erstwhile company for A. Y. 2017-18. After the issuance of the section 148 notice, a draft assessment order dated 29th March 2022, and a final assessment order dated 30th March 2022 are also passed by the Assessing Officer against the erstwhile company. The said section 148 notice as well as the final assessment order dated 30th March 2022 are challenged in the present Petition.

Even otherwise, the income which the Assessing Officer alleges has escaped assessment, has already been brought to tax by the Petitioner LLP in A.Y. 2017-18, and therefore, the Assessing Officer could never have had reason to believe that income had escaped assessment.

Appellant / assessee submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Revenue / respondent submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Court / Tribunal analysis and reasoning

interest of Rs.50,34,979/- also stood reflected in the return of income filed by the Petitioner LLP, and which was assessed to tax in the assessment order dated 4th December 2019 passed under section 143(3) of the IT Act. Therefore, there could be no case of income escaping assessment, was the case of the Petitioner.

learned Senior Counsel appearing on behalf of the Petitioner, as well as Mr. Mishra, the learned counsel appearing on behalf of the Revenue. As mentioned earlier, the first challenge to the notice issued under section 148 is that the same is issued against a non-existent entity rendering the same illegal and badin-law. As far as this issue is concerned, we find that from the facts of the present case, the erstwhile company ceased to exist with effect from 17th March 2016. This is an undisputed position. Yet the notice under section 148 has been Page 7 of 11 NOVEMBER 3, 2025

37. We find no reason to take a different view. There is a value which the Court must abide by in promoting the interest of certainty in tax litigation. The view which has been taken by this Court in relation to the respondent for AY 2011-2012 must, in our view be adopted in respect of the present appeal which relates to AY 2012-2013. Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable.”

Operative decision and relief

of the view that in the present case, the notice issued under section 148 to the erstwhile company, namely, Erangal Comtrade and Consultancy Private Limited, cannot be allowed to stand and is hereby quashed and set aside. Once we have quashed the notice issued under section 148, then naturally the impugned assessment order dated 30th March 2022 also cannot be allowed to stand and is hereby quashed and set aside. This is for the simple reason that the said assessment order emanates from the notice issued under section 148. Page 9 of 11 NOVEMBER 3, 2025

the same is set aside by the Hon'ble Supreme Court, in such an event, the Appeal filed by the Petitioner (in relation to the impugned assessment order dated 30th March 2022) before the CIT (Appeals), shall be restored to file and Page 10 of 11 NOVEMBER 3, 2025

Petition is also disposed of in terms thereof. However, in the facts and circumstances of the present case, there shall be no order as to costs.

Authorities and precedents appearing in the judgment

• CIT v. Spice
• CIT v. Spice Enfotainment Ltd

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on Reassessment notice issued to company converted into LLP. The operative result is classified as Quashed Or Set Aside. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with Reassessment notice issued to company converted into LLP. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Reconstruct the reassessment timeline: original assessment, section 148A notice/reply, approval authority, notice date and the applicable section 149 limitation window.
• Preserve the complete response to section 148A(b), objections and proof of disposal; jurisdictional defects are often decided from the documentary chronology.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

Read / download the clean local judgment copy

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