2014 (12) TMI 1203 - AT - Income Tax

Validity of the issue of notice under s. 153C - Held that - Considering the totality of the above facts and respectfully following the decision of Hon ble jurisdictional High Court in the case of Spice Infotainment Ltd. (2011 (8) TMI 544 - DELHI HIGH COURT ) we hold that the issue of notice under s. 153C in the name of M/s Image Credit & Portfolio (P) Ltd. on 10th Sept. 2010 is void. Accordingly the same is quashed. Once the notice issued under s. 153C has been quashed the assessment completed in pursuance to such notice also cannot survive and the same is also quashed. - Decided in favour of assessee.

Summary

Issues:
Cross-appeals against common order passed by Ld. CIT (Appeals)-II, New Delhi for asst. yrs. 2003-04 to 2008-09.

Analysis:
1. The judgment pertains to cross-appeals challenging an order by the Ld. CIT (Appeals) for assessment years 2003-04 to 2008-09. The primary issue revolves around the validity of the notice issued under section 153C of the Income Tax Act and the subsequent completion of assessment based on said notice.

2. The facts of the case involve a search and seizure action under section 132 of the IT Act in the cases of individuals and a company. Subsequently, proceedings under sections 153C and 153A were initiated based on documents found during the search. The Assessing Officer (AO) completed the assessment, making certain additions, which were later deleted by the Ld. CIT (Appeals), leading to appeals from both the Revenue and the assessee.

3. The main contention raised by the assessee was that the notice under section 153C was issued in the name of a company that had ceased to exist due to a merger sanctioned by the jurisdictional High Court. The assessee argued that the notice and the assessment based on it were null and void. The Revenue, however, argued that the assessment was valid as it was conducted on the surviving entity post-merger.

4. The Tribunal analyzed the facts and legal precedents, including a decision by the jurisdictional High Court in a similar case. The Tribunal noted that the notice under section 153C was issued after the amalgamation, rendering it invalid. The Tribunal emphasized that any notice issued in the name of a non-existent entity is a nullity, irrespective of the Revenue's knowledge of the merger.

5. Based on the above analysis, the Tribunal held that the notice under section 153C issued in the name of the non-existent company was void, leading to the quashing of both the notice and the assessment. The Tribunal further extended this ruling to cover the assessment years 2004-05 to 2008-09, where similar issues were present.

6. Consequently, the Tribunal allowed the assessee's appeals and dismissed the Revenue's appeals, as the assessment order had been quashed due to the invalid notice under section 153C. The grounds of appeal raised by the Revenue against the deletion of additions by the Ld. CIT (Appeals) were deemed irrelevant post the quashing of the assessment order.