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DCIT, Circle-11 (2) , New Delhi Versus M/s Shantikunj Investment Pvt. Ltd. (Known as M/s Hydel Constructions Pvt. Ltd.)

2018 (1) TMI 286 - ITAT DELHI

Reopening of assessment - assessment was framed on the non-existing company - scheme of amalgamation - Held that:- the assessment was framed by the AO on the non-existent amalgamated company, not on the amalgamating company, therefore, the assessment framed was void ab initio and the same was rightly quashed by the ld. CIT(A) - Decided against revenue - ITA No. 254/Del/2015 - Dated:- 2-1-2018 - Sh. N. K. Saini, AM and Smt. Beena A. Pillai, JM Assessee by : Sh. Aloke Periwal, CA & Sh. Nisehay .....

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tion was carried out at the residential and business premises of Sh. S. K. Jain and Sh. Virendra Kumar Jain on 14.09.2010. During the course of search proceedings, it was noticed that a number of companies were being managed from the residential as well as business addresses related to the aforesaid persons. The AO observed that all the books of accounts and other relevant paper of those companies were found from the residence of Sh. S. K. Jain and Sh. Virendra Kumar Jain and nothing was found a .....

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s 147 r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act). 4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and challenged the validity of the assessment framed on a non-existing company. It was submitted that on receiving the notice u/s 148 of the Act, the assessee vide its letter dated 16.04.2012 intimated the AO that the assessee company had amalgamated with M/s Hydel Constructions Pvt. Ltd. and therefore, assessment in the hands of non- existing .....

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td. Vs ACIT, Circle-21, New Delhi (2014) 46 Taxmann.com 236 (Del. ITAT) 5. The ld. CIT(A) after considering the submissions of the assessee observed that the assessee company had already amalgamated with M/s Hydel Constructions Pvt. Ltd. and the Registrar of Companies updated on 02.06.2008, on the basis of order of the Hon ble Delhi High Court in C.P. No. 297/2007 dated 17.03.2008 certifying the amalgamation of the assessee i.e. M/s Shantikuj Investment (P) Ltd. with M/s Hydel Constructions Pvt. .....

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nt was framed on the non-existing company, therefore, the ld. CIT(A) was fully justified in holding the same to be a nuillity. 8. We have considered the submissions of both the parties and perused the material available on the record. In the present case, it is an admitted fact that the assessee M/s Heartland Delhi Transcription and Services Pvt. Ltd. (HDTS) amalgamated with M/s Heartland Information and Consultancy Pvt. Ltd. (HICS) in pursuant to the order of the Hon ble Delhi High Court dated .....

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the assessee s paper book. It is also noticed that the AO referred the matter u/s 92 CA of the Act of the amalgamated assessee company HDTS to the TPO who passed the order dated 25.10.2010 on the aforesaid entity. The AO also passed the assessment order dated 22.2.2011 u/s 144C / 143(3) of the Act on the aforesaid entity i.e. HDTS which amalgamated in HICS, therefore, it is crystal clear that the entity HDTS was not in existence when the TPO as well as the AO passed their respective order. 9. On .....

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d with M/s Maruti Suzuki India Ltd. w.e.f. 01.04.2012, as a of scheme of amalgamation duly approved by the Hon'ble Delhi High Court vide order dated 2013 and the assessment in this has been framed by the AO vide order dated 03.03.2015. Therefore, dear that when the assessment order was passed on 03.03.2015, M/s Suzuki Powertrain India Ltd. lot inexistence. It is also noticed that the aforesaid fact was in the knowledge of the department as the informed vide various letters mentioned in para .....

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on during the course of assessment; however, the Assessing Officer, despite being told that the original company was no longer in existence, did not Le remedial measures and did not transpose the transferee as the company which had to be assessed, instead, he resorted to a peculiar procedure of describing the original assessee as the one in existence; order also mentioned the transferee's name below that of assessee's company. Now, that did not to the assessment being completed in the na .....

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e was an assessee and as an incorporated company and was in existence when it the returns in respect of two assessment years in question. However, before the case could be ted for scrutiny and assessment proceedings could be initiated, M/s Spice got amalgamated with M Corp Pvt. Ltd. It was the result of the scheme of the amalgamation filed before the Company Judge of this Court which was dully sanctioned vide orders dated 11th February, 2004. With this amalgamation made effective from 1st July, .....

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ith 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. In view of the aforesaid clinching position in law, it is difficult to digest the circuitious 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. After the sanction of the scheme on 11th April, 2004, the Spice ce .....

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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." It has been further held as under: "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 Section 292B. .....

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he AO in the name of non- existing entity was void ab initio and deserves to be quashed, we order accordingly. 14. On the present case, the contention of the Id. CIT DR was that the assessment was rightly framed by the AO on the assessee who filed the return of income and when the income was earned, it was inexistence. This controversy has been settled by the Hon'ble Jurisdictional High Court in the case of CIT v. Dimension Apparels (P.) Ltd. [2015] 370 ITR 288/[2014] 52 taxmann.com 356 (Del .....

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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 section 292B. Participation by the amalgamated company in assessment proceedings would not cure the defect because "there can be no estoppels against law." 15. In the present case also when the assessment was framed by the AO vide order dated 29.12.2015 in the name of M/s Suzuki Powertrain India Ltd., the sai .....

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ich was not inexistence on the date of passing the assessment order was not valid and as such the same is quashed. Since we have allowed ground No. 1 of the assessee and assessment order is quashed, therefore, no finding is given on the other issues raised by the assessee. 10. It is also relevant to point that the order of the ITAT in the case of Maruti Suzuki Pvt. Ltd. vs. DCIT, Circle 16(1), New Delhi (Supra) has been upheld by the Hon ble Jurisdictional High Court vide order dated 4th Septemb .....

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