TMI Blog2019 (2) TMI 1893X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER N.K. Billaiya, This appeal by the assessee is directed against the order dated NIL framed u/s 143(3) r.w.s 144C of the Income-tax Act, 1961 [hereinafter referred to as 'the Act'] pertaining to A.Y 2014-15. 2. Vide Ground No. 1, the assessee has challenged the legality of the order being passed by the Assessing Officer on a non-existing entity and is, therefore, illegal and void ab initio. Since this ground goes to the root of the matter, we heard the representatives of both the sides at length on this issue and have carefully perused the orders of the authorities below. 3. Facts on record show that the assessment order was framed in the name of Vedanta Ltd formerly known as Cairn India Ltd. At the very outset, we have to mention that Vedanta was never known as Cairn India Ltd. The fact is that, Cairn India Ltd is an amalgamated company, which has seized to exist in the eyes of law pursuant to amalgamation with Vedanta Ltd. 4. The Assessing Officer referred the matter to the TPO who framed the TP order in the name of Cairn India Ltd. No doubt, the return of income was filed in the name of Cairn India Ltd on 30.11.2014. Thereafter, Cairn India Ltd a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer under Section 143 (2) of the Act in the name of Spice Corp. Ltd. , the amalgamating company. The factum of Spice Corp Ltd, having been dissolved, as a result if its amalgamation with MCorp Private Limited was duly brought to the notice of the Assessing Officer vide letter dated 2nd April, 2004. Despite the aforesaid, the Assessing Officer, vide order dated 28th March, 2005 passed under Section 143 (3) of the Act, framed the assessment on Spice Corp Ltd, the amalgamating Company. The aforesaid assessment order dated 28th March, 2005 was appealed against by MCorp Global Pvt. Ltd. (erstwhile MCorp Pvt. Ltd) before the Commissioner of Income-Tax (Appeals), inter alia, on the ground that the same was bad in law and void ab initio, the assessment having been framed upon and in the name of a non-existent entity. The CIT (A), however, rejected the aforesaid ground, though on merits, the appeal was allowed and all additions/disallowances were deleted. 2. Aggrieved by the deletion of the additions/disallowances, the Revenue carried the matter in further appeal to the Tribunal. The appellant also filed cross objections, assailing the order of the CIT (A) on the ground t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 292B of the Act. 5. According to the Tribunal, if the Spice was non-existent, there was no reason for the amalgamation company to represent the same or to feel aggrieved against the said order and preferred appeal and get the same decided on merits. In other words, any appeal preferred by a non-existence person must also be treated as non-est. All these acts of the appellants/ amalgamated company clearly show that it had been constantly treated the assessment made against the appellant in respect of the assessment of amalgamated company. Further, no prejudice is caused to the assessee merely because in the body of the assessment order name of the amalgamated company is not shown. 6. On the aforesaid reasoning and analysis, the Tribunal summed up the position in para 14 of its order which reads as under:- In the light of the discussions made above, we, therefore, hold that the assessment made by the AO, in substance and effect, is not against the non-existent amalgamating company. However, we do agree with the proposition or ration decided in the various cases relied upon by the learned counsel for the assessee that the assessment made against non-existent person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the amalgamation of the Indian Sugar Company with the appellant Company, the Indian Sugar Company continued to have its entity and was alive for the purposes of Section 41(1) of the Act. The amalgamation of the two companies was effected under the order of the High Court in proceedings under Section 391 read with Section 394 of the Companies Act. The Saraswati Industrial Syndicate, the trans free Company was a subsidiary of the Indian Sugar Company, namely, the transferor Company. Under the scheme of amalgamation the Indian Sugar Company stood dissolved on 29th October, 1962 and it ceased to be in existence thereafter. Though the scheme provided that the transferee Company the Saraswati Industrial Syndicate Ltd. undertook to meet any liability of the Indian Sugar Company which that Company incurred or it could incur, any liaiblity, before the dissolution or not thereafter. Generally, where only one Company is involved in change and the rights of the share holders and creditors are varied, it amounts to reconstruction or reorganisation or scheme of arrangement. In amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or ama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sor in place of the said dead person‟. When notice under Section 143 (2) was sent, the appellant/amalgamated company appeared and brought this fact to the knowledge of the AO. He, however, did not substitute the name of the appellant on record. Instead, the Assessing Officer made the assessment in the name of M/s Spice which was non existing entity on that day. In such proceedings and assessment order passed in the name of M/s Spice would clearly be void. Such a defect cannot be treated as procedural defect. Mere participation by the appellant would be of no effect as there is no estoppel against law. 12. Once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292Bof the Act. Section 292B of the Act reads as under:- 292B. No return of income assessment, notice, summons or other proceedings furnished or made or issue or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reasons of any mistake, defect or o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in the name of Spice Corp Ltd , after the said entity stood dissolved consequent upon its amalgamation with Mcorp Private Limited w.e.f. 01.07.2003, was a mere procedural defect ? (ii) whether on the facts and in the circumstances of the case, the Tribunal erred in law in holding that in view of the provisions of section 292B of the Act, the assessment, having in substance and effect, been framed on the amalgamated company which could not be regarded as null and void? 11.3 This Court, in Spice Infotainment (supra) discussed and noted the following observations in the decision of the Supreme Court in Saraswati Industrial Syndicate (supra): Generally, where only one Company is involved in change and the rights of the share holders and creditors are varied, it amounts to reconstruction or reorganisation or scheme of arrangement. In amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or amalgamation has no precise legal meaning. The amalgamation is a blending of two or more existing undertakings into one undertaking, the share holders of each blending Company become substantially the share holders in the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India (P) Ltd. (2015) 231 Taxman 809 (Del); (ii) CIT v. Micron Steels (P) Ltd. [2015] 372 ITR 386 (Del) (iii) CIT v. Dimensions Apparels (P) Ltd. [2015] 370 ITR 288 (Del) (iv) BDR Builders Developers Pvt. Ltd. v. ACIT (Decision dated 26th July 2017 passed by this Court in W.P.(C) No. 2712 of 2016) 13. The question whether, for the purposes of Section 170 (2) of the Act, the defect of passing the assessment order in the name of an non-existent entity is a mere irregularity was answered by this Court in CIT v. Dimensions Apparels (P) Ltd. (supra), where in paras 6 and 7 it was held as under: 6. Sections 170(1) and 170(2) of the Act do not assist the revenue in their case. The revenue does not contest that in a case of amalgamation, the predecessor (being a dissolved company) cannot be found . Consequently, Section 170(2) applies. This provision clarifies that where the predecessor cannot be found, the assessment of the income of the previous year in which the succession took place up to the date of the succession and of the precious year preceding that year shall be made on the successor in like manner and to the same extent as it would have been made on the prede ..... X X X X Extracts X X X X X X X X Extracts X X X X
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