TMI Blog2017 (12) TMI 1347X X X X Extracts X X X X X X X X Extracts X X X X ..... (EMML)/2016-16,dated 27.3.2017 passed u/s 263 of the Income Tax Act, 1961 which in turn have arisen from an order passed by the Assistant Commissioner of Income Tax (hereinafter called ACIT), range 6(2)(2) passed under section 143(3), dated 31.3.2015. 2. Grounds of appeal taken by the assessee are as under : 1 . On the facts and circumstances of the case and in law, the learned Principal Commissioner of Income Tax - 6, Mumbai ( the PCIT ) erred in invoking the provisions 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosures of Related Party by RCL while framing assessment order of the year under consideration and thereby setting aside the order of assessment is bad in law 9 . On the facts and circumstances of the case and in law, the learned PC IT erred in holding that the Assessing Officer has not examined the transaction of purchase and sale of share of Reliance Infrastructure Finance Pvt . Ltd . ( RIFPL ) from RCL toReliance Money Infrastructure Ltd . ( RMIL ) and thereby setting aside the assessment order for examining genuineness of the transaction and source of investment made during the year . 10 . On the facts and circumstances of the case and in law, the learned PC IT erred in holding that the Assessing Officer has failed 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 apprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act by the PCIT on the ground that no revision proceedings under section 263 of the Act can be initiated on the assessment order which is passed on the non-existent company. The ld AR argued that in the instant year , the same decision should be applied and revisionary order passed u/s 263 of the Act by the PCIT should be quashed . 6. On the other hand, the ld. DR objected to the submissions of the ld.AR and submitted that though the issue hass been decided by the co-ordinate bench of the Tribunal in assessee s own case in ITA No.3331/Mum/2016 (A.Y:2011-12)(supra) but the proceedings under section 263 of the Act validly initiated and consequently the order passed by the PCIT is also as per law and should be uphold. 7. We have heard both parties and perused the material placed before us including the orders of Tribunal in assessee 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the earlier notice dated 07 / 04 / 2015 are brought out . The changes made are narrated the learned Counsel for the assessee before us . 8 . In view of the above facts, now it was seen that pursuant to merger of EMML ceased to exist from 17 . 04 . 2013, the date when amalgamation / merger scheme became effective and yet the assessment order has been passed in the name of EMML ( formerly known as Reliance Money Mall Ltd .) on 29 / 10 / 2013 . The AO despite keeping on record the order of the Hon ble Bombay High Court approving the scheme of amalgamation, failed to pass the assessment order in the name of Reliance Capital Ltd . on behalf of Emerging Money Mall Ltd . which merged with Reliance Capital Ltd . w . e . f . 31 / 03 / 2013 . We find that pursuant to scheme of merger approved by Hon ble Bombay High Court the assessment order should not have been passed in the name of the company which has ceased to exist w . e . f . 17 / 04 / 2013 . We also find that the Principal CIT himself was of the opinion that the assessment order issued in the name of EMML was not the correct status in whose name the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be initiated, M / s Spice got amalgamated with M Corp ( P ) Ltd . It was the result of the scheme of the amalgamation filed before the Company Judge of this Court which was duly sanctioned vide orders dt . 11th Feb . , 2004 . With this amalgamation made . effective from 1st July, 2003, M / s Spice ceased to exist . That is the plain and simple effect in law . The scheme of amalgamation itself provided for this consequence, inasmuch as simultaneous with the sanctioning of the scheme, M / s Spice was also stood dissolved by specific order of this Court . With the dissolution of this company, its name was struck off from the rolls of companies maintained by the Registrar of Companies . 8 . A company incorporated under the Indian Companies Act is a juristic person . It takes its birth and gets life with the incorporation . It dies with the dissolution as per the provisions of 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 to this consequence provided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... England 4th Edition Vol . 7 para 1539 . Two companies may join to form a new company, but there may be absorption or blending of one by the other, both amount to amalgamation . When two companies are merged and are so joined, as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its entity . 9 . The Court referred to its earlier judgment in General Radio Appliances Co . Ltd . vs . M . A . Khader ( 1986 ) 60 Comp Case 1013 ( SC ). In view of the aforesaid clinching position in law, it is difficult to digest the circuitous route adopted by the Tribunal holding that the assessment was in fact in the name of amalgamated company and there was only a procedural defect . 10 . Sec . 481 of the Companies Act provides for dissolution of the company . The Company Judge in the High Court can order dissolution of a company on the grounds stated therein . The effect of the dissolution is that the company no more survives . The dissolution puts an end to the existence of the company . It is held in M . H . Smith ( Plant Hire ) Ltd . vs . D . L . Mainwari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision makes it clear that a mistake, defect or omission in the return of income, assessment, notice, summons or other proceeding is not sufficient to invalidate an action taken by the competent authority, provided that such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the provisions of the Act . To put it differently, s . 292B can be relied upon for resisting a challenge to the notice, etc . , only if there is a technical defect or omission in it . However, there is nothing in the plain language of that section from which it can be inferred that the same can be relied upon for curing a . jurisdictional defect in the assessment notice, summons or other proceeding . In other words, if the notice, summons or other proceeding taken by an authority suffers from an inherent lacuna affecting his / its jurisdiction, the same cannot be cured by having resort to s . 292B . 14 . The issue again cropped up before the Court in CIT vs . Harjinder Kaur ( 2009 ) 222 CTR ( P H ) 254 : ( 2009 ) 19 DTR ( P H ) 211 . That was a case where return in questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that this provision condones the invalidity which arises merely by mistake, defect or omission in a notice, if in substance and effect it is in conformity with or according to the intent and purpose of this Act . Since no valid notice was served on the assessee to reassess the income, all the consequent proceedings were null and void and it was not a case of irregularity . Therefore, s . 292B of the Act had no application . 16 . When we apply the ratio of aforesaid cases to the facts of this case, the irresistible conclusion would be provisions of s . 292B of the Act are not applicable in such a case . The framing of assessment against a nonexistent entity / person goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a 'dead person' . 17 . The order of the Tribunal is, therefore, clearly unsustainable . We, thus, decide the questions of law in favour of the assessee and against the Revenue and allow these appeals . 10 . Before us, the learned Counsel for the assessee also referred to the following decisions / judgments :- i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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