TMI Blog2017 (12) TMI 1262X X X X Extracts X X X X X X X X Extracts X X X X ..... in its appeal challenged the order of the Ld.CIT(A) in directing the Assessing Officer to delete the disallowance made u/s. 40(a)(ia) in respect of the Architect fees and labour charges paid by the assessee. The assessee filed Cross objection raising a legal ground that the re-assessment order dated 28.03.2013 passed by the Assessing Officer u/s. 143(3) r.w.s. 147 of the Act is null and void. Assessee also raised ground stating that the re-assessment proceedings initiated within a period of four years in the absence of new tangible material is bad in law in view of the Hon'ble Jurisdictional High Court in the case of CIT v. Amitabh Bachan [349 ITR 76]. 3. Since the assessee has challenged the very validity of the reassessment order passed by the Assessing Officer, first we take up the issue of the assessee in the Cross objection. 4. Learned Counsel for the assessee submitted that the assessee firm namely M/s. Neha Enterprises was converted into Private Limited Company on 20.02.2008 and the name of the company was changed to M/s. Neha Home Builders Private Limited. Learned Counsel for the assessee referring to Page No. 51 of the Paper Book submits that the notice u/s. 148 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore, from 2nd March, 2006, DLF Cyber City firm is no more in existence. Notice under Section 148 was issued on 18th August, 2008, i.e., the date on which the partnership firm was not in existence. Hon'ble Jurisdictional High Court in the above mentioned case has held that the assessment in the hands of dead person would be clearly void. The aforesaid observation would be squarely for the issue of notice under Section 148 in the name of dead person. Therefore, respectfully following the above decision, we hold that the issue of notice under Section 148 in the name of a dead person is void. It is not much relevant whether the Assessing Officer was aware or not with regard to dissolution of the firm. However, we may point out that the Revenue is at liberty to take appropriate action in accordance with law in the hands of the successor company in the light of the observations of Hon'ble Jurisdictional High Court at paragraph 18 of the report which is also reproduced by us at paragraph 12 above. 7. The Hon'ble Delhi High Court in the case of Spice Entertainment Ltd v. CIT in ITA.No. 475 and 476 of 2011 dated 03.08.2011 considered as to whether the assessment m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant/amalgamated company. Thus, the appellant accepted that the assessment proceedings in respect of the assessment of Spice for the period prior to its amalgamation are being taken up against the appellant and it is the appellant which felt aggrieved of the assessment order and preferred appeal. The order was thus in substance and in fact, against the appellant/amalgamated company. The mere omission on the part of the AO to mention the name of the appellant/amalgamated company in place of M/s Spice was, therefore a procedural defect covered by the provisions of section 292B of the Act. 5. According to the Tribunal, if the Spice was non-existent, there was no reason for the amalgamation company to represent the same or to feel aggrieved against the said order and preferred appeal and get the same decided on merits. In other words, any appeal preferred by a non-existence person must also be treated as non-est. All these acts of the appellants/ amalgamated company clearly show that it had been constantly treated the assessment made against the appellant in respect of the assessment of amalgamated company. Further, no prejudice is caused to the assessee merely because in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act. It is trite law that on amalgamation, the amalgamating company ceases to exist in the eyes of law. This position is even accepted by the Tribunal in para-14 of its order extracted above. Having regard this consequence provided in law, in number of cases, the Supreme Court held that assessment upon a dissolved company is impermissible as there is no provision in Income-Tax to make an assessment thereupon. In the case of Saraswati Industrial Syndicate Ltd. Vs. CIT, 186 ITR 278 the legal position is explained in the following terms: The question is whether on the amalgamation of the Indian Sugar Company with the appellant Company, the Indian Sugar Company continued to have its entity and was alive for the purposes of Section 41(1) of the Act. The amalgamation of the two companies was effected under the order of the High Court in proceedings under Section 391 read with Section 394 of the Companies Act. The Saraswati Industrial Syndicate, the trans free Company was a subsidiary of the Indian Sugar Company, namely, the transferor Company. Under the scheme of amalgamation, the Indian Sugar Company stood dissolved on 29th October, 1962 and it ceased to be in existe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mainwaring (T/A Inshore), 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 became incumbent upon the Income tax authorities to substitute the successor in place of the said dead person. When notice under Section 143 (2) was sent, the appellant/amalgamated company appeared and brought this fact to the knowledge of the AO. He, however, did not substitute the name of the appellant on record. Instead, the Assessing 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be cured inspite of the deeming effect of Section 292B of the Act. Therefore, the return was absolutely invalid and assessment could not be made on a invalid return. In the process, the Court observed as under: Having given our thoughtful consideration to the submission advanced by the learned Counsel for the appellant, we are of the view that the provisions of Section 292B of the 1961 Act do not authorize the AO to ignore a defect of a substantive nature and it is, therefore, that the aforesaid provision categorically records that a return would not be treated as invalid, if the same in substance and effect is in conformity with or according to the intent and purpose of this Act . Insofar as the return under reference is concerned, in terms of Section 140 of the 1961 Act, the same cannot be treated to be even a return filed by the respondent assessee, as the same does not even bear her signatures and had not even been verified by her. In the aforesaid view of the matter, it is not possible for us to accept that the return allegedly filed by the assessee was in substance and effect in conformity with or according to the intent and purpose of this Act. Thus viewed, it is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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