TMI Blog2016 (10) TMI 1148X X X X Extracts X X X X X X X X Extracts X X X X ..... -2013 passed by the AO in the name 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. - ITA No.3331/Mum/2016 - - - Dated:- 28-10-2016 - Sri Mahavir Singh, JM And Sri Rajesh Kumar, AM For the Appellant : S/Shri Arvind Sonde, Jitendra Sanghavi, ARs For the Respondent : Shri Deepak Jain, AR ORDER PER MAHAVIR SINGH, JM: This appeal by the assessee is arising out of the order of the Principal CIT-6, Mumbai passed u/s 263 of the Income Tax Act, 1961 (hereinafter the Act) vide File No. Pr. CIT-6/263/Reliance Capital/2015-16 dated 30-03-2016. Assessment was framed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of and in the name of erstwhile Emerging Money Mall Ltd. (in short EMML). The learned Counsel for the assessee Shri Arvind Sonde drew our attention to pages 118 to 130 of the assessee s paper book wherein the show-cause notice is enclosed and he read out the show cause notice No.Pr.CIT-6/263/Reliance Cap./2014-15/936 dated 07-04-2015 wherein following is recorded. Sub :-Notice u/s. 263 of the I.T. Act, 1961 in the case of M/s. Reliance Capital Ltd. (in which M/s. Emerging Money Mall Ltd. Has merged pursuant to amalgamation/merger sanction by the Hon ble High Court) for AY 2011-12 reg. 1. It is observed from the records that pursuant to the Scheme of Arrangements, M/s Emerging Money Mall Ltd. (NMML) merged with M/s Reliance Capital Ltd. (RCL) w. e .f. 31-03-2013 pursuant to sanction of the scheme by the Hon ble High Court of Bombay. Perusal of the records also revealed that while passing the assessment order u/s. 143(3) on 29-10-2013 in the case of M/s. Emerging Money Mall Ltd. for AY 2011-12 (which merged with M/s. RCL w .e .f. 31-03-2013 pursuant to merger / amalgamation sanctioned by Hon ble High Court), the assessing Officer has failed to carry out releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatus of the assessee and entity in whose name assessment order was required to be passed after the merger of the assessee with RCL with effect from 31-03-2013. The Learned Counsel for the assessee drew our attention to the observation of the Principal CIT in the show-cause notice wherein he has clearly observed that the assessment order issued in the name of EMML was not the correct status in whose name the assessment was required to be made after the merger of the assessee company i.e. EMML with the RCL with effect from 31-03-2013, when the company, EMML ceased to exist from 17-04-2013, by the time assessment order was passed in the case of EMML as on 29-10-2013. The Learned Counsel stated that the Principal CIT himself noted that the assessment order passed in the name of EMML dated 29-10-2013 was bad in law. 5. The learned Counsel for the assessee stated that no action was taken on the first show-cause notice dated 07-04-2015 issued under section 263 of the Act for revising the assessment order and subsequently another show-cause notice was issued vide No. Pr.CIT-6/263/Reliance Cap./2015-16/272 dated 17-02-2016, copy of which is filed in assessee s paper book pages 142 to 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further drew our attention to the order of the Hon ble Bombay High Court merging the EMML with RCL dated 22-03-2013 with effect from 31-03-2013 and the Company EMML ceased to exist from 17-04-2013. The copy of approval of merger by the Hon ble Bombay High Court along with scheme of amalgamation is filed in assessee s paper book at pages 25 to 46. It was contended by the learned Counsel for the assessee that this order of the Hon ble Bombay High Court approving scheme of merger was available on the record of the AO before passing of the assessment order dated 29-10-2013. Despite this fact, the AO passed assessment order in the name of a non-existent Company. On the other hand, the learned CIT DR supported the revision order passed by the Principal CIT-6, Mumbai u/s 263 of the Act setting aside the original assessment order passed u/s 143(3) of the Act on 29-10-2013. 7. We have rival contentions and gone through the facts and circumstances of the case. We find from the records of the case that originally the notice u/s. 263 of the Act was issued by the Principal CIT on 7/04/2015 and by observing in Para 2, Para 10 and Para 11, pointed out that the assessment order is bad-in-law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 company. However, we do agree with the proposition or ratio decided in the various cases relied upon by the learned counsel for the assessee that the assessment made against non-existent person would be invalid and liable to be struck down. But, in the present case, we find that the assessment, in substance and effect, has been made against amalgamated company in respect of assessment of income of amalgamating company for the period prior to amalgamation and mere omission to mention the name of amalgamated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings 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 varied, it amounts to reconstruction or reorganisation of scheme of arrangement. In amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or amalgamation has no precise legal meaning. The amalgamation is a blending of two or more existing undertakings into one undertaking, the shareholders of each blending company become substantially the shareholders in the company which is to carry on the blended undertakings. There may be amalgamation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 non-existing 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 taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reasons of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceedings is in substance and effect in conformity with or according to the intent and purpose of this Act. 13. The Punjab Haryana High Court stated the effect of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, 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 Nath Suresh Chand Ram Naresh vs. CIT (2005) 196 CTR (All) 416: (2006) 280 ITR 396 (All), the Allahabad High Court held that the issue of notice under s. 148 of the IT Act is a condition precedent to the validity of any assessment order to be passed under s. 147 of the Act and when such a notice is not issued and assessment made, such a defect cannot be treated as cured under s. 292B of the Act. The Court observed that this provision condones the invalidity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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