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Genpact Infrastructure (Bhopal) Pvt. Ltd., (now merged with Genpact India) Versus DCIT, Circle-12 (1) , New Delhi

2018 (2) TMI 873 - ITAT DELHI

TPA orders against non existent company - Held that:- TPO passed the order u/s 92CA(3) on 29.01.2013. Thereafter, the AO passed the draft assessment order dated 12.03.2013 and the assessee raised the objections before the ld. DRP who issued the direction to the TPO/AO vide order dated 26.12.2013 and the TPO on the directions of the ld. DRP passed the order giving effect of the direction of the DRP-1 u/s 24(5) of the Act on 21.01.2014. All the aforesaid orders were passed in the name of erstwhile .....

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e, the assessment framed was void ab initio - Decided in favour of assessee - ITA No. 2025/Del/2014 - Dated:- 9-2-2018 - Sh. N. K. Saini, AM And Sh. K. N. Chary, JM For The Assessee : Sh. Vishal Kalra, Adv. And, Ms. Reena Malik, CA Sh. Khyati Dadhwal, Adv. For The Revenue : Mrs. Namita Panday, Sr. DR ORDER Per N. K. Saini, AM: This is an appeal by the assessee against the order dated 16.01.2013 passed by the AO u/s 143(3) r.w.s. 144C(5) of the Income Tax Act, 1961 (hereinafter referred to as the .....

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( DRP ) / Transfer Pricing Officer ( TPO ) are bad in law and void ab initio as the same have been passed on a non-existent entity, namely Genpact Infrastructure (Bhopal) Pvt. Ltd. The brief facts giving rise to the aforesaid ground of appeal are stated hereunder: The Appellant is engaged in the business of providing Information Technology enabled Services ( ITeS ) / Business Process Outsourcing ( BPO ) services, including finance and accounting, collections, insurance, customer fulfilment servi .....

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orders on the erstwhile entity i.e. Genpact Infrastructure (Bhopal) Pvt. Ltd. The orders, thus, passed by the lower authorities are bad in law and void ab initio as the same have been passed on a nonexistent entity. In this regard, it is respectfully submitted that the issue involved in the said additional ground of appeal stands covered in favor of the Appellant by the jurisdictions ! High Court's decision in the case of Spice Entertainment Limited vs Commissioner of Service Tax (ITA 475, 4 .....

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Hon'ble Mumbai ITAT In light of the above settled legal position, the assessment completed on the erstwhile entity which had ceased to exist pursuant to the scheme of amalgamation, is a jurisdictional defect which is beyond cure under the Income-tax Act, 1961, thus making the orders of the lower authorities, void ab initio. It is further submitted that the aforesaid additional ground of appeal is purely legal in nature and does not involve any fresh investigation into facts of the case. The .....

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indly be admitted and adjudicated on merits. The Appellant trusts that its request shall be acceded to. 3. The ld. Counsel for the assessee reiterated the contents of the aforesaid application and requested to admit the additional ground. In his rival submissions, the ld. Sr. DR opposed the admission of the additional ground. 4. We have considered the submissions of both the parties and perused the material available on the record. In the present case, it is noticed that the additional ground ra .....

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essment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. 5. In view of the above, ratio laid down by the Hon ble Supreme Court in the aforesaid referred to case, the additional ground raised by the assessee is admitted. 6. The ld. Counsel for the assessee submitted that the assessment order has been passed on erstwhile entity i.e. M/s Genpact Infrast .....

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vt. Ltd. (2017) 85 Taxmann.com 330 (Del.) 7. In her rival submissions, the ld. Sr. DR supported the order of the AO and further submitted that the assessee participated in the assessment proceedings and never raised objection before the AO. Therefore, the assessment framed by the AO was a valid assessment. The reliance was placed on the judgment of the Hon ble Calcutta High Court in the case of CIT, Central-1 Vs M/s Shaw Wallace Distilleries Ltd. in ITA No. 32/2008, order dated 06.06.2016 (copy .....

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1.2011 which was received in the office of Additional Commissioner of Income Tax, Range-12, New Delhi on 03.02.2011. In the said letter it has been mentioned as under: Genpact Infrastructure (Bhopal) Private Limited was an Indian company engaged in providing Information Technology ( IT ) / IT Enabled Services (ITES), which had changed its registered office Co Delhi Information Technology Park, Shastri Park, New Delhi. It has been assessed to income-tax with your office vide PAN AACCG6569R. Genpa .....

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ly, Genpact Bhopal has ceased to exist as separate legal entity and all its assets and liabilities along with all rights, obligations, licenses, registrations etc. stands transferred to Genpact India w.e.f. April 1, 2010 being, the appointed date under the Scheme of Amalgamation. A copy of the order passed by the Hon ble Delhi High Court and the acknowledgment of fifing, the same with the office of Registrar of Companies on December 31, 2010 is collectively enclosed as Annexure A for your record .....

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believe that our above request will be acceded to. 9. From the aforesaid letter, it is crystal clear that information was received by the AO on 03.02.2011 relating to the amalgamation of the assessee with M/s Genpact India and a reference was made by the AO u/s 92CA(1) of the Act to the TPO who vide letter dated 17.02.2012 asked the assessee to submit the document maintained in terms of Section 92D of the Act. The TPO passed the order u/s 92CA(3) of the Act on 29.01.2013. Thereafter, the AO pas .....

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dia. Therefore, it is crystal clear from the aforesaid narrated facts that the entity M/s Genpact Infrastructure (Bhopal) Pvt. Ltd. which amalgamated with M/s Genpact India, was not in existence when the TPO/AO/DRP passed their respective orders. 10. On a similar issue, the ITAT Delhi Bench I-1, New Delhi having the same combination passed a detailed order authored by the AM in the case of M/s Maruti Suzuki India Ltd. vs. Dy. CIT reported in (2016) 72 taxmann.com. 164. and the relevant findings .....

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re, 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 5 of the former part of this order which were to the various Tax Authorities. However, the AO in spite of knowing this fact that M/s Suzuki in India Ltd. amalgamated with M/s Maruti Suzuki India Ltd., made the reference to the TPO and - sued the n .....

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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 name of the transferee-company. According to the sing Officer, the assesseecompany was still in existence. Clearly, this was a case where the assesssment was contrary to law, as having being completed against a non-existent company. The Tribunal' .....

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lgamated 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, 2003, M/s Spice ceased to exist. That is the plain and le 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 of this .....

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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 ceased 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/amalgama .....

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rther 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. The framing of assessment against a non-existing 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 per son'. 13. In the present case also as the assessment .....

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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 (Delhi) wherein it has been held as under: Section 170(2) of the Income-tax Act, 1961, makes it clear that in the case of amalgamation, the assessment must be made on the successor (i.e., the amalgamated company). Section 176 which contains provisions pertaining to a discontinuation of .....

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ecause 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 said company had already amalgamated with M/s Maruti Suzuki India Ltd. and therefore, it was not inexistence. Moreover, it is clear from the provisions of Section 170(2) of the Act that in the case of amalgamation, the assessment must be made on the successor i.e. the amalgamated company and not on the .....

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point that the aforesaid 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 September, 2017 in the case of Principal Commissioner of Income Tax, New Delhi vs. Maruti Suzuki Private Ltd., reported at (2017) 85 Taxmann.com 330 (supra) wherein it has been held as under: The revenue has repeatedly brought the issue before the Court in a large number of cases where, in more o .....

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rticipated in the assessment proceedings was negatived in Spice Infotainment Ltd. v. CIT [2012] 247 CTR (Del.) 500 wherein it was held that once it was found that the assessment was framed in the name of a non-existent entity, it did not remain a procedural irregularity of the nature which could be cured by invoking the provisions of section 292-B. The legal position having been made abundantly clear, there is no hesitation in holding that impugned order passed by Tribunal does not require any i .....

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