TMI Blog2006 (4) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... st. The assessment is therefore held to be invalid and is cancelled. In a case of amalgamation where one entity takes over the business of two other entities, the same would be a case of succession to business, otherwise on death and therefore the provisions of Sec. 170 of the Act would apply. We therefore hold that the assessment in the name of H.P.India is null and void and the assessment is therefore held to be invalid and is cancelled. In view of the decision on this preliminary issue the other issues raised by the assessee are not taken up for consideration. - HON'BLE P.M. JAGTAP, AM AND N.V. VASUDEVAN, JM For the Appellant : K.R. Pradeep and Shri B.K. Manjunath For the Respondent : K.C. Jain, CIT, DR ORDER Per: N.V. Vasudevan, Judicial Member: This is an appeal by the assessee directed against order dt. 30.09.05 of CIT(A)-XV, New Delhi relating to the A.Y. 2002-2003. 2. The first two grounds of appeal of the assessee are general in nature and call for no specific adjudication. Ground nos. 3 to 5 reads as follows : 3. The authorities below erred in framing an assessment against the appellant company which was already dissolved effective from 01.04.2003. Thus, the authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruing or arising to HP-India for all purposes be treated and be deemed to be profits or income of H.P.Sales. 5. Since the registered office of H.P.Sales was at Bangalore, a petition u/s 391 to 394 of the Companies Act, 1956 was presented by the transferee company for sanction of the scheme before the Hon'ble Karnataka High Court. The Hon'ble High Court by its order dt. 28.5.04 sanctioned the above scheme. The Court directed the transferee company within 30 days of the Court's order should file a certified copy of the Court's Order with the Registrar of Companies, Karnataka. Since the regd. office of H.P.India was at Delhi a petition u/s 391 to 394 of the Companies Act was also filed before the Hon'ble Delhi High Court for sanction of the scheme. The Hon'ble Delhi High Court by its order dt. 12.2.2004 sanctioned the scheme of amalgamation. Thus consequent to the orders of the Hon'ble High Court and the scheme of amalgamation H.P.India stood dissolved with effect from the appointed date without the process of winding up. Thus w.e.f. 1.4.03 H.P.India ceased to exist as an entity. 6. H.P. India for A.Y. 2002-03 filed its return of income on 30.10.2001. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uidation. Applying the same analogy, I hold that proceedings against the amalgamated company were valid. This begs the question of the validity of the notices served on the erstwhile company. To my mind, the identities as well as the business of the erstwhile company and the new company stood merged with each other and I see no infirmity in the proceedings held by the A.O. Moreover, even if some technicality arose, it would stand covered by the provisions of S. 292B which covers non-substantive lapses. Moreover, the officers of the company had accepted the notices and responded to them and had participated in the assessment proceedings and had signed letters and note sheets on behalf of the asseesee company. Consequently, to my mind the principle of Estoppel would apply and the appellant can not now take the plea of non-jurisdiction on the ground that the entire proceedings were flawed due to the non-existence of the company. Lastly, but importantly I hold that the erstwhile company's income was taxable and that is the substantive issue. The appellant cannot escape taxation of income by holding out the plea of technical error. Therefore, in my view the proceedings were valid. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the effect of assessment proceedings where an assessee dies after filing of the return. This was a case relating to an individual and not a limited company and therefore not relevant to the present issue before the Tribunal. The same principle will apply to the decision in the case of CIT vs Kokar Plant 233 ITR 620 relied upon by the ld DR. 9. The question whether after dissolution of a company and after the intimation of such dissolution with the ROC an assessment can be made on dissolved company or not had come up for consideration in several decisions. In the case of CIT, Madras vs. Express Newspapers Ltd. (supra) the question was as to when a company whose name has already been struck off the Rolls of the Registrar of Companies pursuant to voluntary liquidation on 12.4.48 and which company filed a Return of Income on 3.1.48 and assessed to tax by order of Assessing Officer on 28.2.50, such an order of assessment was valid. The Court held as follows. To answer that question it is first necessary to consider whether the assessment on the basis of the return was valid. The Id. counsel for the assessee urged that the assessment could not be held to be invalid for the mere reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preferring any appeals against the said order. The appeals preferred before the AAC in the first instance and thereafter before the Appellate Tribunal purportedly on behalf of these companies were manifestly incompetent appeals. It does not need much argument to say that an appeal preferred by a non-existing person must be treated as non est. In other words, there were no appeals at all, in the eye of law, before the AAC or before the Appellate Tribunal. Consequently, there could be no competent reference to this court out of the orders passed by the Tribunal on such appeals, 11. The decision of the Delhi Bench of ITAT in the case of Impsat (P) Ltd. vs. ITO -91 ITD 354 (Del) = (2004-TIOL-119-ITAT-DEL) also supports the plea of the Assessee. The facts of the said case were that an assessee, a limited company was incorporated to implement a project in the country, in collaboration with the foreign company. The assessee received some money from a foreign collaborator in Assessment Year 1995-96 and 1996-97. The assessee due to heavy losses abandoned the project. The collaborators thought it fit to waive refund of the share application money and wrote a letter dated 24.10.2000 waiving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f two other entities, the same would be a case of succession to business, otherwise on death and therefore the provisions of Sec. 170 of the Act would apply. The provisions of Section 170 reads as follows: 170. SUCCESSION TO BUSINESS OTHERWISE THAN ON DEATH. no provision in the Act by which the Assessing Officer can proceed to assess the income of a predecessor in business (i.e. the Amalgamating Company) in the hands of a successor in business (i.e. the Amalgamated Company) however, one exception is provided by Sec. 170(2) where a predecessor is not found, successor can be assessed for a period comprising of previous year in which succession took place up to the date of succession and the previous year preceding such previous year. It is for the revenue to initiate appropriate proceedings against the right person in accordance with law. For the present case we may observe that the assessment framed against HP India is liable to be held as invalid in law. 14. We therefore hold that the assessment in the name of H.P.India is null and void and the assessment is therefore held to be invalid and is cancelled. In view of the decision on this preliminary issue the other issues raised by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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