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2016 (3) TMI 719 - ITAT KOLKATA

2016 (3) TMI 719 - ITAT KOLKATA - [2016] 46 ITR (Trib) 619 - Revision u/s 263 - whether order passed by the ld. CIT on the dead person is not valid? - Held that:- As find from reply letter dated 27-01-2015 before the ld.CIT in response to show cause notice issued u/s 263 of the Act, the assessee herein had specifically brought to the notice of the ld. CIT that M/s. The Bond Company Ltd was merged with the assessee herein. Hence, we find that the assessee has duly discharged its onus of intimatin .....

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the Act cannot be applied in the facts of the instant case for the reason that section 292BB of the Act can be made applicable only for assessment or reassessment proceedings and the same cannot be made applicable for revisional proceedings as contemplated u/s. 263 of the Act. Moreover, the provisions of section 292BB would not come to the rescue of the revenue when there is a basic fault on the assumption of jurisdiction itself on a non-existent entity by the ld.CIT by issuing show cause and p .....

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3 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') against the order of assessment framed by the Learned AO u/s 143(3) of the Act. 2. The first ground raised by the assessee is with regard to the fact that the ld. CIT u/s. 263 of the Act has passed an order in the name of M/s. The Bond Company Ltd, which is not at all in existence on the date of passing the order u/s. 263 of the Act. 2.1 The Ground no.1 raised by the assessee is as below:- "1. a) For that the impug .....

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he paper book, the fact of this merger has been duly informed to the ld.AO vide letter dated 24-11-2014. Admittedly, show cause notice was issued u/s. 263 of the Act by the ld. CIT on 13-01-2015 and section 263 order was passed on 10-03-2015 in the name of The Bond Company Limited. We also find from pages 3-4 of the paper book that the reply to the show cause notice was filed by M/s. Emerald Company Ltd ( the assessee herein) before the ld.CIT. The ld.AR argued that the order passed by the ld. C .....

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We find that M/s. the Bond Company Limited has been merged with M/s. Emerald Company Ltd ( the assessee herein) vide order of Calcutta High Court on 16-05-2014 and pursuant to the merger, M/s. The Bond Company Ltd had lost its identity and existence. Hence, the arguments of the ld.AR that the revision order u/s. 263 passed on the dead person is to be appreciated. We also find from reply letter dated 27-01-2015 before the ld.CIT in response to show cause notice issued u/s 263 of the Act, the asse .....

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ssee. Pursuant to the merger, the amalgamating ( M/s. The Bond Company Limited) loses its existence in the eyes of law. We find that the section as relied on by the ld.DR on the provisions of section 292BB of the Act cannot be applied in the facts of the instant case for the reason that section 292BB of the Act can be made applicable only for assessment or reassessment proceedings and the same cannot be made applicable for revisional proceedings as contemplated u/s. 263 of the Act. Moreover, the .....

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in (2014) 52 Taxmann.com 355(Del) dtd July 8,2014, wherein it has been held: "15. In Spice Entertainment Ltd. (supra), this Court, after discussing the law declared by the Supreme Court in Saraswati Industrial Syndicate Ltd. (supra) stated that: "9. The Court referred to its earlier judgment in General Radio and Appliances Co. Ltd. v. MA. Khader [1986]60 Comp Case 1013. In view of the aforesaid clinching position in law, it is difficult to digest the circuitous route adopted by the Tr .....

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hore), 1986 BCLC 342 (CA) that "once a company is dissolved it becomes a non-existent party and therefore no action can be brought in its name. Thus an insurance company which was subrogated to the rights of another insured company was held not to be entitled to maintain an action in the name of the company after the latter had been dissolved. 11. After the sanction of the scheme on 11th April, 2004, the Spice ceases to exit w.e.f 1st July, 2003. Even if Spice had filed the returns, it beca .....

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ame 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 Entertainment Ltd. (supra). 19. The question of whether an assessment upon an amalgamated company is a mistake within the meaning of Section 2928 was raised and answered by the Delhi High Court i .....

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al defect covered by Section 2928 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 non-existing entity it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of .....

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he framing of assessment against a non-existing entity/person" as a jurisdictional defect. This has been a consistent position. As early as 1960. In CIT v Express Newspapers Ltd [1960] 40 ITR 38 (Mad.), the Madras High Court held that "there cannot be an assessment of non-existent person. The assessment in the instant case was made long after the Free Press Company was stuck off from the register of the companies, and it could not be valid." (Emphasis Supplied) 22. On the last con .....

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ntel Technology India P.Ltd reported in (2015) 57 Taxmann.com 159(Kar), wherein it has been held: " 6. …… ……. …… it is contended that the facts of the present case are similar, if not identical, to the facts in the case of Spice Infotainment Ltd (supra) wherein the Delhi High Court has, after considering the various provisions of the Income Tax Act as well as certain decisions of the Apex Court and other High Courts, clearly held that the framing of .....

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8. Accordingly, for the reasons given in the judgment of the Delhi High Court in the case of Spice Infotainment Ltd. (supra), these appeals are dismissed and we decide the substantial questions of law in favour of the assessee and against the revenue." - Decision of Co-ordinate Bench of Bangalore Tribunal in the case of ACIT Vs. Arshed properties & Investments P.Ltd reported in 62 Taxmann.com 340, wherein it has been held :- "17. The next issue is with regard to applicability of pr .....

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