Passing assessment order against non existing entity is not sustainable in the eyes of law: ITAT

The main contention of the Assessee was, that M/s Saurabh Overseas Pvt. Ltd. has been merged with DBG Leasing and Housing Ltd. w.e.f. 07/05/2011 pursuant to the order of the High Court of Delhi dated 21/01/2011. The said fact of the merger has been intimated by DBG Leasing and Housing Ltd. to the Assessing Officer vide letter dated 18/06/2011 which has been acknowledged on 27/07/2011 by the Assessing Officer. Even after receipt of the letter dated 18/06/2011, the Assessing Officer has passed the assessment order dated 10/03/2014 against Saurabh Overseas Pvt. Ltd. The Ld. AR further submitted that since the existence of Saurabh Overseas Pvt. Ltd. is ceased to be in existing as of 07/05/2011, passing of the assessment order dated 10/03/2014 against the non-existing entity is illegal, void, and ab initio.

Per contra, Ld. DR submitted that the assessee has filed the appeal before CIT(A) in the name of M/s Saurabh Overseas Pvt. Ltd. and even before this Tribunal, the appeal has been filed in the name of M/s Saurabh Overseas Pvt. Ltd. and by way of revised Form No. 36 the name of the appellant has been mentioned as ‘Saurabh Overseas Pvt. Ltd. (Now merged with DBG Leasing and Housing Ltd.)’. Therefore, submitted that no interference is called for by this Tribunal.

ITAT Order

7. We have heard the parties and perused the material on record and gave our thoughtful consideration. M/s Saurabh Overseas Pvt. Ltd. ceased to be exist w.e.f. 07/05/2011 on which date the said Company has merged with DBG Leasing and Housing Ltd. pursuant to the order of Hon’ble High Court of Delhi dated 21/01/2011. The said fact has been conveyed to the Assessing Officer vide letter dated 18/07/2011 by DBG Leasing and Housing Ltd. which has been acknowledged on 27/07/2011 by the A.O. Despite of the said information of merger of the Company, the Assessing Officer has issued notice u/s 148 on 25/03/2013 and the show cause notice u/s 142(1) of the Act in the name of M/s Saurabh Overseas Pvt. Ltd., The assessment order has been passed u/s on 147/143(3) of the Act on 30/03/2014 against M/s Saurabh Overseas Pvt. Ltd., on the which dates M/s Saurabh Overseas Pvt. Ltd. was non existing entity. Therefore, in our considered opinion, passing the assessment order against non existing entity is not sustainable in the eyes of law and the same is void ab initio.

8. Accordingly, we quash the assessment order dated 10/03/2014 and also the order of CIT(A) dated 05/09/2016 by allowing the addition grounds of appeal taken by the assessee. The other grounds of appeal are dismissed having become infructuous.

9. In the result, the appeal of the assessee is allowed.

To Read Judgment Download PDF Given Below: