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2015 (9) TMI 282 - ITAT DELHI

2015 (9) TMI 282 - ITAT DELHI - TMI - Assessment order u/s 143(3) passed in the name of non-existent company - validity of assessment - Held that:- Undisputedly and admittedly, the return was filed by STIPL amalgamating company on 30.11.2006. The AO issued notices u/s 143(2) and 142(1) of the Act in the name of amalgamating company. Subsequently, letter dated 3.10.2008 was filed before the AO during the course of assessment proceedings informing the scheme of amalgamating sanctioned by the Hon’b .....

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ent amalgamating company viz. STIPL.

The facts of the present case are quite similar to the facts and circumstances in the Spice Infotainment (2011 (8) TMI 544 - DELHI HIGH COURT) wherein their lordships held that the framing of assessment against non-existent entity/person goes to the root of the matter which is not a procedural irregularity curable u/s 292B of the Act and or any other provision but it is a jurisdictional defect because there cannot be framing of any assessment agai .....

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Bhavta Kumari, Advocates For The Respondent : Shri Atiq Ahmad, Sr.DR ORDER PER BENCH These cross appeals by the revenue and the assessee have been directed against the order of CIT(A)-X, New Delhi dated 18.9.2013 in Appeal No. 86/09-10 for AY 2006-07. Assessee s appeal in ITA No. 6452/Del/13 2. The grounds raised by the assessee read as under:- 1. That the Commissioner of Income Tax (Appeals) erred on facts and in law in not holding that the order framed by the assessing officer u/s 143(3) of t .....

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nt can be validly framed in the name of such entity. 2. That the Commissioner of Income Tax (Appears) erred on facts and in law in confirming disallowance of ₹ 35,31 ,0001- made by the assessing officer in respect of provision for warranty made in respect of domestic sales, on the ground that appellant failed to establish that such provision was based on scientific data and/or actuarial study. 2.1 That the Commissioner of Income Tax (Appeals) erred on facts and in law in alleging that ther .....

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l assessee Samsung Telecommunication India Pvt. Ltd. (STIPL) was amalgamated with Samsung India Electronics Pvt. Ltd.(hereinafter SIEPL) w.e.f. 1.4.2008 in pursuance to the order of Hon ble High Court dated 22.8.2008. The amalgamating company filed its return of income on 30.11.2006 for AY 2006-07 and the AO issued notice u/s 143(2) and 142(1) of the Act in the name of amalgamating company i.e. STIPL. The amalgamating company SIEPL submitted a letter before the AO regarding amalgamation and subs .....

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9 and 24.11.2009 were also filed before the AO duly disclosing the factum of amalgamation and subsequent dissolution of the amalgamating company STIPL with amalgamated company SIEPL i.e. present appellant. However, the AO passed impugned assessment order on 30.11.09 u/s 143(3) of the Act in the name of non-existent amalgamating company i.e. STIPL. 4. The assessee carried the matter before the CIT(A) raising the legal obstruction that the impugned assessment order u/s 143(3) has been passed in th .....

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STIPL i.e. amalgamating company were allowed to lapse while the amalgamation was carried out. Ld. CIT(A) further held that therefore it is absurd to accept the argument that only because the amalgamation company STIPL was merged with amalgamated company SIEPL, there would be no obligation or legal follow up of the income tax provisions to complete assessment u/s 143(3) of the Act. Now, the empty handed assessee is before this Tribunal in the second appeal. It is also pertinent to note that the .....

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w.e.f. 1/4/2008 that the amalgamating company STIPL has ceased to exist pursuant to filing such amalgamation order before the ROC but the AO passed impugned assessment order on 30.11.2009 u/s 143(3) of the Act in the name of non-existent amalgamating company, therefore, the assessment order is without jurisdiction, illegal and void ab initio. Ld. Counsel also pointed out that during the assessment proceedings the appellant vide letters dated 17.11.09 and 24.11.2009 repeatedly informed the AO di .....

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name of non-existent amalgamating company i.e. STIPL because in this situation also, the assessee is bound to pay tax either itself or on behalf of the non-existent amalgamating company. Ld. DR also pointed out that during first appellate proceedings, the CIT(A) considered all relevant provisions of the Act and factum of the present case and rightly concluded that it is absurd to accept the legal argument that only because STIPL was merged with SIEPL, there would be no obligation or legal follow .....

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serve that the assessee raised this legal issue before the first appellate authority and the same was dismissed with following observations and conclusion:- Adjudication: 2.3 After going through the facts of the case, arguments and submissions of the A.R. of the appellant and various judicial pronouncements relied upon by the AR, this ground is being finalized after making the following observations:- (i) On going through the assessment order, it is clear that the return of income had been filed .....

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re was no justification for making the assessment. The A. R. has relied upon certain judicial pronouncements where facts are different and the company had been dissolved or the individual or HUF was not in existence. However, in the present case M/s STIPL had got amalgamated into another company along with its assets, liabilities, rights and legal obligations. It is pertinent to note that just because a company had amalgamated with another company would not result in all legal obligations to cea .....

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ics P. Ltd. there would be no obligation or legal follow up of the income tax provisions to complete the assessment u/s 143(3) of the I. T. Act. Keeping in view the above observations, I do not find any merit in the arguments of the A.R. of the appellant and, therefore, this ground is dismissed. 8. At this juncture, we are required to consider the ratio of the decision of Hon ble High Court of Delhi in the case of Spice Infotainment Ltd. vs CIT (2012) 247 CTR (Del) 500 wherein speaking for the J .....

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, clearly unsustainable. We, thus, decide the questions of law In favour of the assessee and against the Revenue and allow these appeals. 18. We may, however, point out that the returns were filed by M/s Spice on the day when it was in existence it would be permissible to carry out the assessment on the basis of those returns after taking the proceedings afresh from the stage of issuance of notice under s. 143(2) of the Act. In substitute, the name of the appellant in place of M/s Spice and then .....

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292B of the Act are not applicable in such a case where assessment has been framed in the name of non-existent amalgamated company. Their lordships further held that the framing of assessment against non-existent entity/person goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a dead person. In the case of Spice Infotainment Ltd. (supra), their lordships also pointed out that the returns were filed by M/s Sp .....

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d circumstances of the present case, we clearly observe that undisputedly and admittedly, the return was filed by STIPL amalgamating company on 30.11.2006. The AO issued notices u/s 143(2) and 142(1) of the Act in the name of amalgamating company. Subsequently, letter dated 3.10.2008 was filed before the AO during the course of assessment proceedings informing the scheme of amalgamating sanctioned by the Hon ble High Court vide order dated 22.8.2008 and the amalgamating company i.e. STIPL ceased .....

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