9911796707
TMI Blog2020 (6) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant and Intas Pharmaceuticals Limited (herein after referred "IPL") were paying AMT/MAT and therefore in absence of tax arbitrage, the provisions of specified domestic transactions would not apply to transaction of purchase of finished goods from the IP Firm. b) Assuming but not accepting and without prejudice to Ground No. 1 (a), in the facts and circumstances of the case and in law, the learned CIT(A) ought to have appreciated that IPL, which fulfils the conditions of selection of the tested party as laid down under Rule 10B of the Income Tax Rules and whose data regarding the comparable companies and the comparable uncontrolled transactions were more reliably available should be considered as a tested party c) That in the facts and circumstances of the case and in law, the learned CIT(A) erred in not appreciating the fact that the AO/TPO has failed to find out appropriate comparable for IP Firm and benchmarked the IP Firm with entities whose Functions, Assets and Risk ('FAR') Analysis and business profile was more akin to the appellant company and which were used by the appellant company as comparable entity in its TP documentation. d) That in the facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered before passing the impugned order. 5. In the facts and circumstances of the case and in law, the learned CIT(A) has erred in confirming action of the ld. AO in initiating penalty u/s. 271(1)(c) of the Act." 3. The assessee has raised the following additional ground of appeal vide letter dated NIL. "1. On the facts and in the circumstances of the case, the order passed by the Assessing Officer u/s.143(3) r.w.s. 92CA(4) of the I.T. Act dated 6.2.2017 is bad in law and ab initio void for the reason that the assessment order has been passed in the name of the erstwhile partnership firm M/s. Intas Pharmaceuticals where as on the date of the assessment the said partnership firm had already merged with Intas Pharmaceuticals Ltd. which is a company incorporated under the relevant provisions of the Companies Act. 2. Following from the preceding Ground No.1 the impugned assessment order dated 6.2.2017 deserves to be quashed and vacated. 3. On the facts and in the circumstances of the case, the order dated 25.3.2019 passed by the learned CIT(A) is bad in law and void ab initio for the reason that the said order has been passed in the name of M/s. Intas Lifesciences (previousl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vised that an important legal issue was left out inadvertently from the Grounds of Appeal originally raised before this Hon'ble Tribunal. This issue is a purely legal issue and, therefore, additional grounds of appeal are being now filed before this Hon'ble Tribunal with a prayer that the same may kindly be admitted and decided on merits. As per the additional grounds of appeal it has been submitted that the impugned assessment orders as well as the appellate orders have been passed in the name of the erstwhile partnership firm which no more existed on the relevant dates of passing of the relevant orders which means that the said orders have been passed in the names of non-existing entities. It is submitted that for this reason the orders are nullity in the eyes of law and, therefore, these orders deserve to be quashed being bad in law. 2. The relevant facts briefly stated are as under:- (i) Intas Pharmaceutical (herein after referred as "IP Firm"] was in existence in the form of a partnership firm, dated 1st December 2005, under the provisions of the Indian Partnership Act, 1932. (ii) Name of "Intas Lifesciences" with effect from 28th February 2015. (iii) Intas Lif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble High Court of Gujarat disposed off the relevant Petition No. 267 of 2015 and the Application No.237 of 2015 with Company Petition No. 268 of 2015 and Application No. 238 of 2015 vide judgement dated 28th September, 2015 and the relevant observations of the Hon'ble High Court are reproduced below for ready reference from para-11 of the judgement:- "11. Considering the entire facts and circumstances of the case and on perusal of the Scheme and the proceedings, it appears that the requirements of the provisions of sections 391 to 394 of the Companies Act, 1956 are satisfied. The Scheme is genuine and bona fide and in the interest of the shareholders and creditors. I, therefore, accordingly allow the company Petitions and approve the Scheme. The Scheme is hereby sanctioned. Prayers made in the respective Company Petitions are hereby granted." 4. From the above, it may kindly be appreciated that from the date of the High Court's order viz. 28th September, 2015 the earlier entity which was a partnership firm got merged with a limited company and, therefore, it is a legal requirement that any order passed under any of the statutory provisions of the Income-tax Act must b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amalgamating company ceasing to exist, it cannot be regarded as a person under section 2(31) against whom assessment proceedings can be initiated or an order of assessment passed; (v) A notice under section 143 (2) was issued on 26-9-2013 to the amalgamating company, SPIL, which was followed by a notice to it under section 142(1); (vi) Prior to the date on which the jurisdictional notice under section 143 (2) was issued, the scheme of amalgamation had been approved on 29-1-2013 by the High Court of Delhi under the Companies Act, 1956 with effect from 1-4-2012; (vii) The Assessing Officer assumed jurisdiction to make an assessment in pursuance of the notice under section 143 (2). The notice was issued in the name of the amalgamating company in spite of the fact that on 2-4-2013, the amalgamated company MSIL had addressed a communication to the Assessing Officer intimating the fact of amalgamation. In the above conspectus of the facts, the initiation of assessment proceedings against an entity which had ceased to exist was void ab initio. [Para 19] * The notice under section 143(2) under which jurisdiction was assumed by the Assessing Officer was issued to a non-existent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 34) and CIT v. Spice Enfortainment Civil Appeal No. 285 of 2014, dated 2-11-2017 (para 33) followed'." The aforesaid Hon'ble Supreme Court decision is fully applicable to the facts of the appellant's case. 5. It may be mentioned here that this issue was neither raised before the Assessing Officer nor before the learned CIT(A) and while filing the appeals before this Hon'ble Tribunal, this legal issue was inadvertently omitted from the grounds of appeal. It is submitted that a purely legal issue can be raised before the Hon'ble ITAT at any stage of the pendency of the appeal even if such issue was not raised before the lower authorities. It is reiterated that all the relevant facts were already available on record before the Assessing Officer and the learned CIT(A). In these circumstances this Hon'ble Tribunal can admit the additional grounds of appeal now raised which go to the very root of the matter, In support of this submission, the appellant relies on the legal position emerging from the following cases:- (i) CIT vs. Abhinitha Foundation P. Ltd, 396 1TR 251 (Mad.) (ii) CIT vs. Britannia India Ltd, 396 ITR 677 (Cal.) (iii) CIT(E) vs. Yamuna E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department was aware about the amalgamation of the firm before framing the assessment order as the assessee intimated to the department as well as Hon'ble High Court also called the comments from the Department on the proposed scheme of amalgamation. Thus we can say that the provision of section 292B of the Act will not be applicable to the assessee as it is not a curable defect/mistake. In this regard we would like to take a note of the position of law laid down by the Hon'ble Supreme in the case PCIT Vs. Maruti Suzuki India Limited reported in 416 ITR 613. The facts in this case are that Suzuki Motors Corporation, and Maruti Suzuki India limited (in short MSIL) constituted a joint venture with shareholding of 70% and 30%. Such joint venture was incorporated as Suzuki Motor India Ltd. Subsequently w.e.f. 8.6.2005 its name was changed to SPIL. On 28.11.2012 SPIL has filed its return of income. Upto this date no amalgamation had taken place. On January 29, 2013 a scheme for amalgamation of SPIL and MSIL was approved by the Hon'ble High Court w.e.f. 1.4.2012. The terms of approval scheme provided that all liability and duties of the transferor company shall stand transferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction 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 either by the transfer of two or more undertakings to a new company, or by the transfer of one or more undertakings to an existing company. Strictly 'amalgamation' does not cover the mere acquisition by a company of the share capital of other company which remains in existence and continues its undertaking but the context in which the term is used may show that it is intended to include such an acquisition. See: Halsbury's Laws of England (4th edition volume 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 absor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person'. When notice under Section 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 Assessing Officer 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 estoppel 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 Section 292B of the Act." Following the decision in Spice Entertainment, (supra) the Delhi High Court quashed assessment orders which were framed in the name of the amalgamating company in: (i) Dimension Apparels (supra); (ii) Micron Steels; and (supra) (iii) Micra India (supra). 21. In Dimension Apparels, (supra) a Division Bench of the Delhi High Court affirmed the quashing of an assessment order dated 31 De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that this was a case where the assessment was contrary to law, having been completed against a nonexistent company." Hon'ble Supreme Court thereafter took note of the judgment in the case of Sky Light Hospitality Vs. ACIT, 259 taxman 390 (SC). This judgment was pressed in service by the Revenue to point out that if an order was framed in accordance with law in the name of amalgamating company, then it would amount to mistake, defect or omission which is curable under section 292B of the Income Tax Act. Hon'ble Supreme Court has dealt with this judgment and explained its impact. Hon'ble Supreme Court ultimately upheld the judgment of Hon'ble Delhi High Court in the case of Maruti Suzuki (supra) and held that assessment order passed subsequently in the name of non-existing company would be without jurisdiction and a nullity. Concluding paragraph of the judgment are worth to note which reads as under: "33. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of defect would not be cured with help of section 292B of the Act, because it is not a procedural irregularity which could be cured. We also note that this Tribunal in the case of Snowhill Agencies Pvt. Ltd. Vs. Pr. CIT bearing ITA No. 1775/AHD/2019 vide order dated 21-1-2020 involving identical facts and circumstances has decided the issue in favour of the assessee. In view of above, we note that the assessment framed under section 143(3) r.w.s. 92CA of the Act is not sustainable. Hence the additional ground of appeal of the assessee is allowed. 10. Since the legal issues are addressed and decided in favor of the assessee, we refrain to give our findings on merits of disallowances under the provisions of the Act. Accordingly the grounds raised by the assessee do not require any separate adjudication. Thus we dismiss the same as infructuous. 11. In the result the appeal of the assessee is partly allowed. Coming to ITA 678/Ahd/2019 AY 2014-15 12. At the outset we note that this tribunal in the own case of the assessee (supra) involving identical facts and circumstances has decided the issue in the favour of the assessee. For the detailed discussion, please refer the relevant par ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
