2024 (5) TMI 797 - AT - Income Tax

Assessment against non existent company - name of company struck off by ROC - HELD THAT - It is crystal clear that the knowledge of the sticking of the name of the assessee from ROC was with AO as on 19.12.2018 being the date of assessment order in respect of the other assessee which under any circumstances cannot be denied by the Revenue authorities in spite of that the AO in the instant case as proceeded with the assessment proceedings and finalized the same u/s 153C r.w.s 144 of the Act dated 26.12.2018. Therefore order in the case of KCJ Buildtech Pvt. Ltd. is not sustainable in the eyes of law since the said company was not in existence at that material point of time at all. The assessment proceeding is thus found to be not maintainable as the assessment order suffers from jurisdictional error. The order is therefore admittedly being issued in the name of a non-existing company which has no value in the eyes of law; in fact such irregularities vitiated the entire proceedings and therefore the same is liable to be quashed.

Summary

Issues involved: Jurisdictional error due to assessment order issued in the name of a non-existing company.

The judgment addresses the jurisdictional issue raised by the assessee regarding the assessment order being passed in the name of a non-existing company. The assessee contended that since the company's name was struck off by the ROC before the assessment order was issued, the entire proceeding is vitiated and should be quashed. The court examined the facts and found that the Assessing Officer was aware of the company's status, as evidenced by a similar case involving another company. The court held that the assessment order in the present case, issued in the name of a non-existing company, lacked legal validity and jurisdiction. Consequently, the court quashed the assessment proceedings against the assessee, ruling in favor of the assessee's cross objections.

The judgment further elaborates on the facts leading to the case, where the assessee was found to be one of the paper companies controlled by certain individuals providing accommodation entries to beneficiaries. The Revenue made additions to the assessee's income based on unexplained entries from shell companies and beneficiaries. The court highlighted the discrepancy in issuing the assessment order in the name of a company that had been struck off by the ROC, emphasizing the jurisdictional error that rendered the assessment proceedings unsustainable in the eyes of the law. The court allowed the assessee's cross objections, leading to the dismissal of the Revenue's appeals.

In conclusion, the judgment emphasizes the importance of maintaining jurisdictional integrity in assessment proceedings and upholding the legal validity of orders issued in the correct entity's name. The court's decision to quash the assessment proceedings due to the jurisdictional error highlights the significance of procedural compliance and adherence to legal requirements in tax matters.