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TMI Blog2014 (11) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order against the respondent (hereafter "the Assessee") framed under Sections 143(3), 153A and 153C of the Income Tax Act, 1961 (hereafter "the Act"). 2. The Assessment Order was made on 31.12.2010, and covered the assessment years 2003-04 to 2008-09. The assessee had contended that it had ceased to exist from 7.12.2009, because, by virtue of an order of this Court - it had been amalgamated with another company under Sections 391(2) and 394 of the Companies Act. Aggrieved by the Assessment Order, the assessee appealed to the CIT(A). It argued that the assessment order was invalid, because on the date on which it was passed, the Assessee had already ceased to exist (having been amalgamated). The CIT(A) agreed with this contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stly that the assessee had itself participated in the proceedings throughout and could not be heard to complain against the assessment order. The revenue relies on the Madras High Court ruling in Marshall Sons and Co. vs. Income Tax Officer (1992) 195 ITR 417. 5. The assessee contends that no question of law arises for consideration. It submits that the text and phraseology of Sections 170 (1) and (2) do not support the revenue's arguments. The assessee further relies on Saraswati Industrial Syndicate v. CIT, 1990 Supl. (1) SCR 332 in support of its contentions and the findings of the tax authorities below, i.e. the CIT (A) and the ITAT. Spice Entertainment Ltd. Vs. CIT - ITA No.475 of 2011, decided by a Division Bench of this Court, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red a new status and it was not possible to treat the two companies as partners or jointly liable in respect of their liabilities and assets." (Emphasis Supplied) 9. With respect to the specific issue of assessment, in Vived Marketing Servicing Pvt. Ltd. No. (supra) the Court observed that: "When the Assessing Officer passed the order of assessment against the respondent company, it had already been dissolved and struck off the register of the Registrar of companies u/s 560 of the Companies Act. In these circumstances, the Tribunal rightly held that there could not have been any assessmsent order passed against the company which was not in existence as on that date in the eyes of law it had already been dissolved." (Emphasis Supplied) 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amalgamation was January 1, 1982, whereas the assessment order was dated November 25, 1984. 13. The Madras High Court held that "according to the records maintained pursuant to the provisions of the Companies Act, the subsidiary company had continued to remain in existence up to January 21, 1986, even long after January 1, 1982." 14. On this basis, it held the Assessee liable. This obviously implies that had the company not been in existence at the time of the assessment order, it would not have been liable. 15. In Spice (supra), this Court, after discussing the law declared by the Supreme Court in Saraswati Industrial Syndicate (supra) stated that: "9. The Court referred to its earlier judgment in General Radio and Appliances Co. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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." 16. The authority of the above precedent binds us; we see no reason to differ from the logic and reasoning in Spice (supra). 17. The other aspect is as to the applicability of Section 292-B of the Act, which reads as follows: "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " is not fatal to the validity of assessment but is a procedural defect covered by Section 292B of the Act." (Emphasis Supplied) 20. This Court rejected this argument, holding that "it [becomes] incumbent upon the Income Tax Authorities to substitute the successor in place of the said 'dead person'. Such a defect cannot be treated as procedural defect... once it is found that assessment is framed in the name of nonexisting entity it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act." (Emphasis Supplied) 21. In Spice (supra) the reason for the inapplicability of Section 292-B was additionally premised on the decision of the Punjab & Haryana High Court in CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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