Assessment Order Passed in Name of Amalgamated company is Void

IN THE INCOME TAX APPELLATE TRIBUNAL

The Relevant Text of the Order as follows :

In fact, we find that the Hon’ble Supreme Court in the case of CIT Vs. M/s Spice Infotainment Ltd. (Civil appeal No. 285 of 2014), by relying on its aforesaid order in the case of Saraswati Industrial Syndicate Ltd (supra), had upheld the order of the Hon’ble High Court of Delhi, which while allowing the appeal of the assessee, had concluded, that where the A.O had framed the assessment in the hands of a non-existent entity, the proceedings and the assessment order so passed would be clearly void and could not be classed as a procedural irregularity of a nature which could be cured by invoking the provisions of Sec. 292B of the Act.

Further, the Hon’ble Supreme Court in the case of Pr. CIT Vs. Maruti Suzuki India Ltd. (2019) 416 ITR 613 (SC), had observed, that where the A.O despite being informed of the fact that the amalgamating company had ceased to exist as a result of the approved scheme of amalgamation, had issued the notice u/s 143(2) in the name of the amalgamating company, the very basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceased to exist upon the approved scheme of amalgamation.

Further, it was observed by the Hon’ble Apex Court, that participation in the proceedings by the assessee cannot operate as an estoppel against law. On the basis of our aforesaid observations, we are of the considered view that neither the issuance of the notice u/s 143(2) to the amalgamating company i.e a non-existent entity be construed as a notice issued to the amalgamated company. Nor, the same be validated by bringing it within the realm of a procedural irregularity within the meaning of Sec. 292B of the Act.

We are of a strong conviction that non-issuance of a notice u/s 143(2) to the amalgamated company, which forms the very foundation for framing of a valid assessment would divest the A.O of his very jurisdiction to frame such assessment.

In fact, we would mince no words in concluding that the non-issuance of a notice u/s 143(2) to the amalgamated company viz. M/s Siemens Limited, PAN No. AAACS0764L, would therein render the impugned assessment framed by the A.O u/s 143(3) r.w.s 144C(13), dated 30.01.2017 as invalid and void ab initio. Accordingly, the impugned assessment framed by the A.O de hors issuance of any notice u/s 143(2) to the amalgamated company cannot be sustained, and is thus quashed for want of jurisdiction. The additional ground of appeal raised by the assessee is allowed.

10. As we have quashed the assessment for want of jurisdiction on the part of the A.O, therefore, we refrain from adverting to the other grounds of appeal raised by the assessee before us i.e Grounds of appeal No. 1 to 13, which thus are left open.

11. Resultantly, the appeal of the assessee in ITA No. 2181/Mum/2017 is allowed in terms of our aforesaid observations.