9911796707
TMI Blog2017 (12) TMI 1347X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of section 263 of the Income-tax Act, 1961 ("the Act") and directing setting aside of the assessment order passed under section 143(3) of the Act by the Assistant Commissioner of Income Tax, Circle - 6(2)(2), Mumbai ("the Assessing Officer") dated 31.03.2015 in the name of "Emerging Money Mall Ltd." on the alleged ground that the said assessment order was erroneous and prejudicial to the interest of the revenue. 2. On the facts and circumstances of the case and in law, the impugned order dated27.03.2017 passed by the PCIT under section 263 of the Act is without jurisdiction, illegal, bad in law and void-ab-initio. 3. On the facts and circumstances of the case and in law, the learned PC IT erred in invoking revisionary proceedings under section 263 of the Act in respect of an of assessment in the name of "Emerging Money Mall Ltd." ("EMML") which is held by the PCIT himself to be bad in law and thereby revising an order of assessment which is non-existent in law. 4. On the facts and circumstances of the case and in law, the learned PC IT failed to appreciate the law laid down by the Jurisdictional Income Tax Appellate Tribunal Mumbai in the Appellant's own case on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to examine the correct amount of interest expenses in respect of purchase of shares of RIFPL from RCL without appreciating the fact the Assessing Officer has already disallowed the entire interest on the borrowings from RCL and therefore the order of assessment is neither erroneous nor prejudicial to the interest of revenue. 11. On the facts and circumstances of the case and in law, the ld.PCIT failed to appreciate that the assessment order dated 31.03.2015 had been passed after due and adequate inquiries/ investigation and application of mind in respect of various issues and therefore the order of the assessment is neither erroneous nor prejudicial to the interest of the revenue. 12. On the facts and circumstances of the case and in law, the learned PCIT failed to appreciate that revisionary proceedings under section 263 of the Act could not be initiated merely to: (a) conduct vague/ roving enquiries; or (b) authorize the assessing officer to conduct roving/ fishing enquiries, by merely setting aside the assessment." 3. The first issue raised by the assessee in this appeal is against the order of PCIT exercising the revisionary jurisdiction under section 263 of the Act on n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee's own case (supra). The perusal of the said order reveals that an identical issue qua revisionary . proceedings u/s 263 being invalid when the Assessment order is passed on the non-existing entity. In this case, we find that the ld.PCIT issued show cause notice to the assessee on 1.5.2015 as to why the assessment framed under section 143(3) dated 31.3.2015 in the name of EMML should not be set aside u/s 263 of the Act as being erroneous and prejudicial to the interest of the revenue. In this case the Hon'ble Bombay High Court has approved the scheme of amalgamation in the name of RCL pursuant to which the M/s EMML merged with RCL with effect from 31.3.2013. However, the AO passed the assessment order in the name of EMML which has ceased to exist with effect from 17.4.2013 and thus there has been total non application of mind on the part of the AO. Even, the PCIT in the show cause notice clearly stated and observed that the assessment in the name of EMML was not correct as the said company stood merged with RCL with effect from 31.3.2013 and consequently EMML ceased to existed from 17.4.2013 and the assessment order in the name of the earlier company was bad in law and is null ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inion that the assessment order issued in the name of EMML was not the correct status in whose name the assessment order was required to be passed after the merger of the assessee company i.e. EMML ceased to exist form 17.04.2013 by the time assessment order was passed in case of EMML i.e. 29.10.2013. In the given facts, we are of the view that the assessment order . passed by ITO, Ward5(3)(1) dated 29/10/201 in the name of EMML is bad-in-law. The consequence of an order which is bad-in-law is that the order is not something that is not good legally, in other words, it is illegal, invalid from outset and ab-initio void. In other words, the said order does not exist. 9. In this regard reference was made by the learned Counsel for the assessee of Hon'ble Delhi High Court judgment in the case of Spice Infotainment Ltd. Vs. CIT (2012) 247 CTR 500 (Del) wherein it has been held as under:- 6. On the aforesaid reasoning and analysis, the Tribunal summed up the position in Para 14 of its order which reads as under: "In the light of the discussions made above, we, therefore, hold that the assessment made by the AO, in substance and effect, is not against the non-existent amalgamating c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to make an assessment thereupon. In the case of Saraswati Industrial Syndicate Ltd. vs. CIT (1990) 88 CTR (SC) 61: (1990) 186 ITR 278 (SC) 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 s. 41(1) of the Act? The amalgamation of the two companies was effected under the order of the High Court in proceedings under s. 391 r/w s. 394 of the Companies Act. The Saraswati Industrial Syndicate, the transferee 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 Oct., 1962 and it ceased to be in existence thereafter. Though the scheme provided that the transferee company the Saraswati Industrial Syndicate Ltd. undertook to meet any liability of the Indian Sugar Company which that company incurred or it could incur, any liability, before the dissolution or not thereafter. Generally, where only one company is involved in change and the rights of the shareholders and creditors are varie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme on 11th Feb., 2004, the Spice ceased to exist w.e.f. 1st July, 2003. Even if Spice had filed the returns, it became . incumbent upon the IT authorities to substitute the successor in place of the said 'dead person'. When notice under s. 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 AO made the assessment in the name of M/s Spice which was non-existing entity on that day. In such proceedings an 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 estoppels against law. 12. Once it is found that assessment is framed in the name of nonexisting entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of s. 292B of the Act. Sec. 292B of the Act reads as under: "292B. No return of income assessment, notice, summons or other proceedings furnished or made or issued or taken or purported to have been furnished or made or issued or take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 s. 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 not possible for us to accept the contention advanced by the learned counsel for the appellant on the basis of s. 292B of the 1961 Act. The return under reference, which had been taken into consideration by the Revenue, was an . absolutely invalid return as it had a glaring inherent defect which could not be cured in spite of the deeming effect of s. 292B of the 1961 Act." 15. Likewise, in the case of Sri Nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of EMML is no order at all in law, the question of revision u/s 263 of the Act of that order which is non-existent is not permitted. We find that Section 263 of the Act permits the CIT to pass an order enhancing or modifying the assessment or cancelling the assessment and directing fresh assessment. These required an order to be in existence albeit illegal order is an order not in existence and therefore is not an order at all and cannot be revised, because under Civil Procedure Code an order against a dead person is a nullity. Accordingly, we quash the revision order passed by the Principal CIT u/s 263 of the Act on jurisdictional issue itself." Moreover the decision of the Hon'ble Delhi High Court in the case of CIT V/s M/s Spice Infotainment Ltd with other cases in Civil appeal no.285 of 2014 has been affirmed by the Hon'ble Supreme Court of India by dismissing the special leave petition filed by the revenue by holding that there is no reasons to interfere with the impugned judgement. In the case on hand the assessment was completed on the non-existent company . which ceased to exist w.e.f. 17.4.2013 upon approval of scheme of amalgamation by the Jurisdictional High Court of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
