Assessment order passed in the name of a non existing company deserves to be quashed: ITAT

Honorable Income Tax Appellate Tribunal (ITAT) in matter of Centum Electronics Ltd vs Deputy Commissioner of Income-tax held that assessment order passed by the assessing officer in the name of a non existing company, despite having prior information provided by the assessee and such facts recorded in the assessment order, suffers from jurisdictional defect and, therefore, same deserves to quashed.

The Tribunal here used the case of Maruti Suzuki India Ltd (supra), where the honorable Supreme Court held that an assessment order passed on a nonexistent entity is without jurisdiction and deserves to be set aside.

Hon’ble Supreme court held as under :-

“33. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Enfotainment (supra) on 2 November 2017. The decision in Spice Enfotainment has been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment (supra). 34. 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 2011-12 must, in our view be adopted in respect of the present appeal which relates to AY 2012-13. 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.”

Thus, the issue is squarely covered in favour of the assessee by the decision of the Hon’ble Supreme Court in case of Maruti Suzuki India Ltd (supra).

Click on the link given below to read the Order: