TMI Blog2020 (8) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... d 30/01/2015 of the Ld. AO being passed in the name of the non-existence assessee, is void ab initio and therefore the same needs to be quashed. a) That without prejudice to ground no. 1 above and on the facts and circumstances of the case and provisions of the law, the Ld. AO as well as Ld. CIT(A) erred in making/confirming the disallowance of ₹ 5,12,33,440/- u/s 14A read with Rule 8D of the IT Act against the exempted income of dividend of ₹ 41,19,539/- only. b) That would prejudice to ground no. 2(a), above, the Ld. AO as well as Ld. CIT(A) is not justified in making/confirming the disallowance u/s 14A read with Rule 8D of IT Act in excess of the exempted income of dividend which is only of ₹ 41,19,539/- 3. That would prejudice to ground no. 1 above and on the facts and circumstances of the case and provision of the law, the Ld. AO as well as Ld.CIT(A) erred in making/confirming the addition of ₹ 5,48,88,600/- towards interest on NPAs on accrual basis by totally disregarding the specific section 43D of the IT Act applicable to banking industry in this regard. 4. That without prejudice to ground no. 1 above and on the facts and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o dismissed the appeal on merit oN addition/disallowances. Aggrieved, the assessee filed appeal before the Tribunal raising the grounds as reproduced above. The appeal filed by the assessee was dismissed on 20/05/2019 due to non-prosecution by the assessee, however, later on recalled for hearing. 3. In ground No. 1, the assessee has challenged legality of the assessment made on non-existence entity. 4. We have heard rival submission of the parties on the issue in dispute. The learned Counsel of the assessee has filed a paperbook containing pages 1 to 118. He referred to page 7-9 of the paper-book, which is a copy of letter dated 20/11/2014 filed with the learned Assessing Officer. The para-6 of the said letter, wherein the assessee intimated that the erstwhile entity, M/s Haryana Gramin Bank was no longer in existence, is reproduced as under: 6. That the assessee bank M/s. Haryana Gramin Bank got amalgamated with M/s. Sarva Haryana Gramin bank as on 29.11.2013 vide Gazettee Notification no. 2686 of Govt. of India. Now, the assessee, namely, M/s. Haryana Gramin Bank is not in existence. (copy of Gazette Notification attached herewith). 4.1 The learned Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferee-company, entire proceedings were a nullity. 4.4 The Ld. CIT(A) dismissed the ground of the assessee holding that the amalgamation happened only on 29/11/2013 , which pertains to financial year 2013-14 relevant to assessment at 2014-15, whereas the assessment order and the appeal relates to assessment year 2012-13, thus, the issue of the impact of the amalgamation does not arise. 4.5 In our opinion, this finding of the Ld. CIT(A) is contrary to the law. If an individual dies during the assessment proceeding, the onus is on the representatives to bring his legal heir on record so that assessment proceeding thereafter could be continued on legal heir and the authorized representative should also be authorized thereafter by the legal representative to appear in the assessment proceedings. A dead person cannot be represented by the Authorized Representative in proceedings subsequent to his death, though he was authorized for appearing in the assessment proceeding prior to his death. Similarly, when one (first) entity gets amalgamated with another (second) entity, the erstwhile entity (first entity) does not exist from the effective date of the amalgamation. It is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice of royalty at 3 per cent and making an adjustment of ₹ 78.97 crores in respect of royalty paid by the assessee for the relevant previous year. 10 On 11 March 2016, a draft assessment order was passed in the name of Suzuki Powertrain India Limited (amalgamated with Maruti Suzuki India Limited). The draft assessment order sought to increase the total income of the assessee by ₹ 78.97 crores in accordance with the order of the TPO in order to ensure that the 8 TPO international transactions with regard to the payment of royalty to the Associated Enterprises is at Arm s Length. 11 MSIL participated in the assessment proceedings of the erstwhile amalgamating entity, SPIL, through its authorized representatives and officers. This is evident from the copies of the order sheets of the assessment proceedings before the assessing officer for AY 2012-13. Post amalgamation, on 30 September 2013, the Chartered Accountants addressed a communication to the Commissioner of Income Tax, Circle 9(1), pursuant to the notice under Section 143(2) for an adjournment of the assessment proceedings for AY 2012-13 until the assessment proceedings for AY 2010-11 and AY 2011-12 we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Enfotainment on 2 November 2017. The decision in Spice Enfotainment has been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment. 34 We find no reason to take a different view. There is a value which the court must abide by in promoting the interest of certainty in tax litigation. The view which has been taken by this Court in relation to the respondent for AY 2011-12 must, in our view be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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