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Chandrapur Ferro Alloy Plant, Steel Authority of India Limited, (Formerly known as Maharashtra Elektrosmelt Limited) (Since merged with Steel Authority of India Ltd.) Versus The Deputy Commissioner of Income Tax, Cir. 3 (2) , Mumbai

Validity of Reopening of assessment - assessment in the name of a non-existent concern - Held that:- Neither at the time of issuance of the notice under section 148 of the Act and nor at the time of finalization of the impugned assessment on 21/3/2012 and 29/11/2012 respectively, the concern, M/s. Maharashtra Elektrosmelt Limited was in existence. Therefore, not only the impugned assessment proceedings have been finalized in the name of a non-existent concern but the same were initiated also in .....

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ve been clubbed and heard together and are being disposed of by adverting to such preliminary issue. In order to appreciate the controversy, the following discussion is relevant. 2. First, we may take up the appeal for assessment year 2005-06, which is directed against an order passed by CIT(A)-4, Mumbai dated 07/10/2013, which in turn, arises out of an order passed by the Assessing Officer under section 147 r.w.s. 143(3) of the Income Tax Act, 1961 (in short the Act ) dated 29/11/2012. 3. The s .....

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d amalgamated with Steel Authority of India Ltd. At the time of hearing, the Ld. Representative for the assessee pointed out that the concern, Maharashtra Elektrosmelt Limited, had ceased to exist not only at the time of passing of the impugned assessment order but it was also nonexistent at the time when the Assessing Officer initiated the impugned proceedings by issuance of notice under section 147/148 of the Act dated 21/3/2012. Since the aforesaid issue goes to the root of the impugned asses .....

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t dated 21/3/2012, in pursuance to which an assessment has been finalized under section 147 r.w.s. 143(3) of the Act dated 29/11/2012 in the name of M/s. Maharashtra Elektrosmelt Limited. In the meanwhile, in terms of the scheme of amalgamation under section 391 to 394 of the Companies Act, 1956, approved by the High Court on 12/7/2011, M/s. Maharashtra Elektrosmelt Limited stood merged with its holding company, M/s. Steel Authority of India Ltd. w.e.f. 01/04/2010. 5. At the time of hearing, the .....

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pecifically mentioned. In fact, at pages 15 to 16 of the of the Paper Book are placed written communication addressed to the Assessing Officer in response to the notice issued under section 148 of the Act, which inter-alia, refers to the amalgamation with M/s. Steel Authority of India Ltd. in the caption itself. At the time of hearing, the Ld.Representative for the assessee also referred to a communication dated 25/11/2011 addressed to the Assessing Officer, which points out the amalgamation of .....

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has been referred to. In this communication, assessee also pointed out that the Notice under Section 148 of the Act has been issued in the name of MEL on 21st March, 2012 and, it is further stated to the Assessing Officer that MEL was not in existence as at 21.03.2012 i.e. the date of issue of Notice under Section 148 of the Act . In this written submission, assessee, interalia, also referred to the judgment of the Hon'ble Delhi High Court in the case of Spice Infotainment Ltd. vs. CIT, 247 .....

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, the Ld. Departmental Representative has not controverted the factual matrix brought out by the assessee but contended that the Assessing Officer was not made aware of the amalgamation. At the time of hearing itself on account of documents referred by the Ld.Representative for the assessee, the Ld. Departmental Representative was made aware of the non-tenability of his assertions. 7. In this background, we have carefully considered the rival submissions. The fact situation in the present appeal .....

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cer, which have been referred by the assessee before us, and copies of which have been placed in the Paper Book, belie the assertions of the Department that the Assessing Officer was not aware of amalgamation of assessee company with its holding company M/s. Steel Authority of India Ltd. In this context, the decision of the Mumbai Tribunal in the case of M/s.Instant Holdings Ltd, ITA No.4593/Mum/2011 dated 09/03/2016 is clearly applicable, wherein the relevant discussion reads as under:- 7. We h .....

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e Bombay High Court on 14.12.2007. 8. In the case of Spice Infotainment Ltd. (supra), the facts were that a return was filed for Assessment Year 2002-03 on 30.10.2002 by M/s. Spice Corp Ltd., i.e., the amalgamating company. Subsequently, vide order dated 11.2.2004 passed by the Hon'ble High Court, the said company stood amalgamated with M/s. MCorp Private Ltd., i.e., the amalgamated company w.e.f. 1.7.2003. The return so filed was picked up for scrutiny assessment vide notice u/s. 143(2) of .....

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plea raised by the assessee before the Hon'ble High Court was that the assessment was framed against a non-existing entity as M/s. Spice Corp Ltd. had already amalgamated with M/s. MCorp Private Ltd., and therefore, the assessment order dated 28.3.2005 suffered from a jurisdictional defect. In that case, the Tribunal had taken a view that the action of the Assessing Officer in framing assessment in the name of M/s. Spice Corp Ltd. even after the said entity stood dissolved consequent upon it .....

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s a mere procedural defect ? (ii) Whether on the facts and in the circumstances of the case, the Tribunal erred in law in holding that in view of the provisions of section 292B of the Act, the assessment, having in substance and effect, been framed on the amalgamated company which could not be regarded as null and void? 9. The Hon'ble Delhi High Court after referring to the judgement of the Hon'ble Supreme Court in the case of (i) Saraswati Industrial Syndicate v. CIT, 186 ITR 278 and (i .....

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a High Court has reached to a similar conclusion. In the case before the Hon'ble Karnataka High Court, one M/s. SSS Ltd. stood amalgamated with Intel Technology India Pvt. Ltd. w.e.f. 1.4.2004; prior to that, it filed a return of income on 28.11.2003 for Assessment Year 2003-04 and an assessment order was passed on 27.3.2006 in the name of the predecessor amalgamating company, i.e., M/s. SSS Ltd. This assessment order was sought to be challenged on the ground that as on 27.3.2006, i.e., the .....

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& Silicon Systems India Pvt. Ltd., after being intimated about the merger with M/s Intel Technology India Pvt. Ltd., was without jurisdiction against the said company and null and void ? (2) Whether the Tribunal was correct in holding that the provisions of section 292B of the Act will not make the assessment valid as a defect/omission to incorporate the name of M/s Intel Technology India Pvt. Ltd., in the assessment order as the same is not in substance and effect in confirmative with or ac .....

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td. v. Commissioner of Wealth Tax, 347 ITR 664 also supports the proposition sought to be canvassed by the assessee before us. In sum and substance, it is safe to deduce that an order of assessment made on an entity which is otherwise non-existent on the date of such assessment is invalid. 12. Factually speaking, in the present case the aforesaid proposition applies on all fours, as before the finalization of the impugned assessment on 19.12.2008, it was brought to the notice of the Assessing Of .....

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he amalgamating company, i.e., ITICL was in existence throughout the previous year relevant to assessment year under consideration, and therefore, the order passed in the name of the amalgamating company, i.e., ITICL was a valid assessment. The aforesaid reason has prevailed with the CIT(A) also to reject the plea of the assessee. In our considered opinion, the aforesaid argument of the Revenue deserves to be repelled considering the ratio of the judgement of the Hon'ble Delhi High Court in .....

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ard to the aforesaid discussion. 13. In the result, we set-aside the action of the Assessing Officer in framing the assessment against ITICL on 19.12.2008 as the said company was non-existent as it stood amalgamated with IHL w.e.f. 1.4.2007, following the scheme of amalgamation approved by the Hon'ble Bombay High Court on 14.12.2007 To the similar effect are the decisions of the Mumbai Tribunal in the case of Ambuja Cement Rajasthan Ltd. in WTA No.11/Mum/2014 dated 24/4/2016 and Siemens Tech .....

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ment against M/s. Maharashtra Elektrosmelt Limited on 29/11/2012, because on that date it was a non-existent concern on account of its amalgamation with M/s. Steel Authority of India Ltd. w.e.f. 01/04/2010 following the scheme of amalgamation approved by the High Court dated 12/07/2011. In other words, the assessment order dated 29/11/2012 is held to be invalid and void-ab-initio. Since we have upheld the preliminary plea of the assessee, which goes to the root of the jurisdiction and the assess .....

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