TMI Blog2021 (9) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... ction and bad in law. The assessment made and the order passed on the amalgamating company i.e., predecessor when the said company is dissolved/not in existence is a nullity. We therefore hold that the impugned assessment order is non-est and ab initio void and, therefore is hereby annulled. - ITA No. 2372/Bang/2019 - - - Dated:- 16-9-2021 - N.V. Vasudevan, Vice President And Chandra Poojari, Member (A) For the Appellant : Padam Chand Khincha, CA For the Respondents : Muzaffar Hussain, CIT (DR) ORDER Per N. V. Vasudevan, Vice President This is an appeal by the assessee against the order dated 29.09.2019 of CIT(A)-3, Bengaluru, relating to AY 2008-09. 2. Grounds 2 and 3 raised by the assessee is with regard the validity of the order passed by the AO on the ground that the assessee ceased to exist as on the date on which the order of the assessment was passed on merger with M/s. Infosys BPM Ltd., and consequently the order passed in the name of a company which seized to exist was invalid. These grounds reads as follows: 2. Assessment order passed was without jurisdiction 2.1. The learned ACIT, Circle - III(1), Chennai [ the learned AO for shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in the said agreement that Philips Electronics India Ltd. shall transfer the shared service centre for finance, accounting and procurement business to PAN Financial Shared Services India P Ltd. with effect from September 30, 2007. PAN Financial Shared Services India P Ltd. thus became the owner of the 'undertaking' with effect from September 30, 2007. 4. The return of income for AY 2008-09 was filed by PAN Financial Shared Services India P Ltd. on 24.09.2008 declaring loss of ₹ 5,16,35,185/- Infosys BPO Limited entered into Share Purchase agreement with P-Financial Services Holding BV by which the entire shares held by P-Financial Services Holding B.V in three Companies viz., (a) Infosys BPO (Poland) Sp.Z.o.o (b) Infosys BPO (Thailand) Ltd. and (c) PAN Financial Shared Services India P Ltd. were transferred to Infosys BPO Limited on December 31, 2008. As a result of the said transfer, the three subsidiaries mentioned above which were hitherto step down subsidiaries of Infosys BPO Limited became direct subsidiaries of Infosys BPO Limited. P-Financial Services Holding B.V was liquidated in accordance with Dutch laws with effect from December 31, 2008. 5. A sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 143(3). As PAN Financial Shared Services India P Ltd. was dissolved without being wound up in accordance with the scheme of amalgamation and the orders of the High Court of Madras and Karnataka and as this fact was also made known to CIT, Computer operations, Chennai and the learned ACIT, Company Circle III(1), Chennai, the said officer or the concerned CIT should have transferred the Jurisdiction and the pending proceedings to the assessing officer of Infosys BPO Limited in Bangalore. The assessment order passed by the AO on a dissolved Company is therefore without Jurisdiction, bad in law and liable to be quashed. 8. The CIT(A) refused to accept the contention of the assessee on the ground that the erstwhile entity or the merged entity did not inform the AO about the factum of the erstwhile company having been seized to exist and having been merged with the assessee in this assessee. The following were the conclusions of the CIT(A) in this regard: 4.3 The submissions of the appellant and report of the AO have duly been considered. The contention of the AO is that during the pendency of assessment proceedings the appellant had never informed the Assessing Officer about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 143 (2) was issued on 26-9-2013 to the amalgamating company, SPIL, which was followed by a notice to it under section 142(1). Prior to the date on which the jurisdictional notice under section 143 (2) was issued, the scheme of amalgamation had been approved on 29-1-2013 by the High Court of Delhi under the Companies Act, 1956 with effect from 1-4-2012. The Assessing Officer assumed jurisdiction to make an assessment in pursuance of the notice under section 143 (2). The notice was issued in the name of the amalgamating company in spite of the fact that on 2-4-2013, the amalgamated company MSIL had addressed a communication to the Assessing Officer intimating the fact of amalgamation. In the above conspectus of the facts, the initiation of assessment proceedings against an entity which had ceased to exist was void ab initio. The notice under section 143(2) under which jurisdiction was assumed by the Assessing Officer was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in section 292B. Despite the fact that the Assessing Officer was inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Ltd. Vs. Asst. CIT (2018) 90 taxmann.com 413 (SC) and CIT Vs Maruti Suzuki India Limited (supra), answered the aforesaid question in favour of the assessee. The facts as noted by the High Court were that an information was received by the Assessing Officer that in Financial Year 2011-12, the assessee by name Shri Mohinder Paul Kapila had cash deposits of Rupees Ten Lakhs (₹ 10,00,000/-) in his bank account, time deposits of Rupees Eleven Lakhs Five Thousand Five Hundred Eighty Six (₹ 11,05,586/-)) and receipts of Rupees Twenty Five Thousand Four Hundred Fourteen (₹ 25,414/-)) as per Form 26AS. It was noticed that no return had been filed and the source of the aforesaid deposits and receipts remained unexplained and had escaped assessment. Accordingly, the case of Mr. Mohinder Paul Kapila was selected under section 147/148 of the Act 1961, after recording of reasons and approval of PCIT PCIT-15, Delhi on 28th March, 2019. However, late Shri Mohinder Paul Kapila (hereinafter referred to as deceased assessee ) had already expired on 21st December, 2018. The deceased assessee is survived by two sons and two daughters. Notice dated 31st March, 2019 under section 148 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g company. In that case, Department by very nature of transaction was aware about the amalgamation. However, the said judgment nowhere states that there is an obligation upon the legal representative to inform the Income-tax tax Department about the death of the assessee or to surrender the PAN of the deceased assessee. 35. This Court is of the opinion that issuance of notice upon a dead person and non service of notice does not come under the ambit of mistake, defect or omission. Consequently, Section 292B of the Act, 1961 does not apply to the present case. 13. In view of the above ratio decidendi of the Hon'ble Apex Court in the case of Maruti Suzuki (supra), the assessee succeeds on this legal issue. We hold that the order of assessment framed in the name of a non non-existent entity after it ceased to be a subsisting entity, was ab-initio initio void and therefore, null in the eyes of law. On similar facts and circumstances of the case and law applicable, the ITAT, Bangalore bench in ACIT v iGate Infrastructure Management Services Ltd. ITA No. 1128/Bang/2015 dt. 4.12.2015 held that assessment order passed by the Income tax authorities in Delhi, after change in reg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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