TMI Blog2024 (3) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd., the successor company. However, the final assessment order has again been passed by the Assessing Officer in the name of Boeing International Corporation India Ltd., the erstwhile company. More interestingly, the name of the successor company i.e. Boeing India Pvt. Ltd., nowhere appears in the body of the final assessment order. Also further relevant to observe, the PAN appearing both in the draft and final assessment orders is of the erstwhile company, Boeing International Corporation India Ltd. and not of the successor company Boeing India Pvt. Ltd. Thus, the facts on record establish beyond doubt that both the draft as well as final assessment orders have been passed in the name of a non-existent company. Applying the ratio laid down by the Hon'ble Supreme Court, in case of Maruti Suzuki [ 2019 (7) TMI 1449 - SUPREME COURT] and Sony Mobile Communications India Pvt. Ltd [ 2023 (2) TMI 1074 - DELHI HIGH COURT] to the factual matrix of the issue, we have no hesitation in holding that the impugned assessment order passed in the name of a non-existent entity is void ab initio. Accordingly, it is quashed. - Shri Saktijit Dey, Vice-President And Shri Dr. Brr Kumar, Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessee submitted, though, the Assessing Officer was aware of the fact that the erstwhile company Boeing International Corporation India Ltd. had merged with Boeing India Pvt. Ltd., however, he has passed both the draft as well as the final assessment orders in the name of Boeing International Corporation India Ltd., which was a non-existent entity as on the date of both draft as well as final assessment orders. Thus, he submitted the assessment order having been passed in the name of a non-existent entity is void ab initio, hence, deserves to be quashed. He submitted, while considering identical nature of dispute in assessee s case in assessment year 2015-16, the Tribunal, in ITA No.9765/Del/2019 dated 17.08.2020, having found that the draft assessment order has been passed in the name of a non-existent entity quashed the assessment order. Further, in support of his contention, learned counsel strongly relied upon the following decisions: i) PCIT vs. Maruti Suzuki India Ltd. (2019) 416 ITR 613 (SC); ii) CIT vs. Sony Mobile Communications India Pvt. Ltd. ITA No.115/2019 judgment dated 02.02.2023 (Delhi High Court). 5. Per contra, learned Departmental Representative submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Raj Kumar (Civil Appeal No.3427 of 2020). 6. In rejoinder, learned counsel for the assessee submitted, the fact that the Assessing Officer has passed both the draft and the final assessment orders in the name of the erstwhile company is further evident from the fact that he has mentioned the PAN of the erstwhile company. 7. He further submitted, in the remand report filed before learned DRP in course of proceedings for assessment year 2015-16, the Assessing Officer has clearly admitted that the issue of merger of old company with the new company was in his knowledge. However, due to some technical difficulty, the assessment order was passed in the name of the erstwhile company. 8. Learned counsel submitted, technical difficulty or glitch in the ITBA Portal cannot be attributed to the assessee as it is a contingency, which the Revenue ought to have resolved. In this context, he relied upon a decision of the Hon'ble jurisdictional High Court in case of Genpact India Pvt. Ltd. vs. DCIT order dated 27.02.2024 in WP(C) 15296/2022. 9. We have given a thoughtful consideration to rival contentions and perused the material on record. We have also applied our mind to the judicial prece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h as on the date of passing of the draft assessment order has become a non-existent entity. Undisputedly, against the draft assessment order, assessee raised objections before learned DRP. Interestingly, the directions of learned DRP is in the name of Boeing India Pvt. Ltd., the successor company. However, the final assessment order has again been passed by the Assessing Officer in the name of Boeing International Corporation India Ltd., the erstwhile company. More interestingly, the name of the successor company i.e. Boeing India Pvt. Ltd., nowhere appears in the body of the final assessment order. 13. It is further relevant to observe, the PAN appearing both in the draft and final assessment orders is of the erstwhile company, Boeing International Corporation India Ltd. and not of the successor company Boeing India Pvt. Ltd. Thus, the facts on record establish beyond doubt that both the draft as well as final assessment orders have been passed in the name of a non-existent company. 14. Having factually found it to be so, it needs to be examined what is the status of an order passed in the name of a non-existent entity, whether it is valid or void ab initio. This particular issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the erstwhile company, it would result in the non-applicability of the ratio enunciated by the Supreme Court in Maruti Suzuki. The reason why we say so is that when the Section 143(2) notice was issued i.e., on 29.08.2011, the amalgamation between the erstwhile company and the respondent company had not occurred. The amalgamation occurred only on 23.07.2013. 18.1 Therefore, the position that this Court needs to examine, is to how the AO, thereafter, should have proceeded in the matter. As noticed above by us, despite the fact that the appellant/revenue was informed on 06.12.2013, that amalgamation had occurred, the AO proceeded on the wrong course. 19. As a matter of fact, the DRP, while dealing with the respondent/assessee s objection, had noticed the change that had been brought about, by virtue of the erstwhile company amalgamating with the respondent/assessee. Despite this fact being brought to the notice of the AO, he continued on the wrong course, and framed the wrong impugned assessment order dated 22.12.2014, in the name of a non-existent company i.e., the erstwhile company. 20. The other aspect, which Mr Kumar has emphasized on, at great length is the applicability of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 292-B of the Act. 25. A batch of civil appeals was filed before this Court against the decisions of the Delhi High Court, the lead appeal being Spice Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353] . On 2-11-2017 [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353] , a Bench of this Court consisting of Hon'ble Mr Justice Rohinton Fali Nariman and Hon'ble Mr Justice Sanjay Kishan Kaul dismissed the civil appeals and tagged special leave petitions in terms of the following order : (SCC pp. 354-55, para 1) Delay condoned. Heard the learned Senior Counsel appearing for the parties. We do not find any reason to interfere with the impugned judgment(s) [Spice Entertainment Ltd. v. Commr. of Service Tax, 2011 SCC OnLine Del 3210 : (2012) 280 ELT 43] , [CIT v. Dimension Apparels ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Limited Liability Partnership Act, 2008 (the LLP Act, 2008). It instituted writ proceedings for challenging a notice under Sections 147/148 of the 1961 Act dated 30-3- 2017 for AY 2010-2011. The reasons to believe made a reference to a tax evasion report received from the investigation unit of the Income Tax Department. The facts were ascertained by the investigation unit. The reasons to believe referred to the assessment order for AY 2013-2014 and the findings recorded in it. Though the notice under Sections 147/148 was issued in the name of Skylight Hospitality Pvt. Ltd. (which had ceased to exist upon conversion into an LLP), there was, as the Delhi High Court held substantial and affirmative material and evidence on record to show that the issuance of the notice in the name of the dissolved company was a Neutral Citation Number: 2023/DHC/001366 ITA 115/2019 Page 10 of 15 mistake. The tax evasion report adverted to the conversion of the private limited company into an LLP. Moreover, the reasons to believe recorded by the assessing officer adverted to the approval of the Principal Commissioner. The PAN number of LLP was also mentioned in some of the documents. The notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issolved as per provisions of the Companies Act. Order was in the name of non-existing person and hence void and illegal. 30. From a reading of the order of this Court dated 6- 4-2018 [Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] in the special leave petition filed by Skylight Hospitality LLP against the judgment of the Delhi High Court rejecting its challenge, it is evident that the peculiar facts of the case weighed with this Court in coming to this conclusion that there was only a clerical mistake within the meaning of Section 292-B. The decision in Skylight Hospitality LLP [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405 ITR 296] has been distinguished by the Delhi, Gujarat and Madras High Courts in: (i) Rajender Kumar Sehgal [Rajender Kumar Sehgal v. CIT, 2018 SCC OnLine Del 12890] ; (ii) Chandreshbhai Jayantibhai Patel [Chandreshbhai Jayantibhai Patel v. CIT, 2018 SCC OnLine Guj 4812] ; and (iii) Alamelu Veerappan [Alamelu Veerappan v. CIT, 2018 SCC OnLine Mad 13593]. 31. There is no conflict between the decisions of this Court in Spice Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353] (dated 2-11- 2017) and in Skylight Hospitality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctional 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 Entertainment on 2 November 2017. The decision in Spice Entertainment 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 Entertainment. 40. 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 2011-2012 must, in our view be adopted in respect of the present appeal which relates to AY 2012-2013. Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings against MRPL for these two assessment years were quashed by the Additional CIT by order dated 30.11.2010 as the amalgamation was disclosed. In addition, in the present case the assessment order dated 11.08.2011 mentions the name of both the amalgamating (MRPL) and amalgamated (MIPL) companies. 37. Secondly, in the cases relied upon, the amalgamated companies had participated in the proceedings before the department and the courts held that the participation by the amalgamated company will not be regarded as estoppel. However, in the present case, the participation in proceedings was by MRPL-which held out itself as MRPL. 22. As is evident upon a perusal of the aforementioned extracts from Mahagun Realtors the Court distinguished the judgment rendered in Maruti Suzuki, on account of the following facts obtaining in that case: (i) There was no intimation by the assessee regarding amalgamation of the concerned company. (ii) The return of income was filed by the amalgamating company, and in the Business Reorganization column, curiously, it had mentioned not applicable . (iii) The intimation with regard to the fact that the amalgamation had taken place was not given for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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