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TMI Blog2020 (12) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... dates. After the search & seizure action, Hon'ble Calcutta High Court passed two orders dated 13.08.2016 and 12.12.2016 whereby M/s. Samudra Vyapaar Pvt. Ltd. and M/s. IQ City Infrastructure Pvt. Ltd. got amalgamated into the assessee-company namely M/s. Mani Square Ltd. with effect from the appointed date i.e. 01.04.2013. Consequent to the search and seizure action, notices u/s 153A were issued by the AO for A.Y. 2011-12, 2012-13 & 2013-14 in the name of M/s. Samudra Vyapaar Pvt. Ltd. as well as in the name of M/s. IQ City Infrastructure Pvt. Ltd. for A.Y. 2011-12 and 2012-13. In pursuance of the said notices, assessments were completed by the AO u/s 143(3)/153A of the Act for the years under consideration determining the total income as under: Assessment Year In case of SB Pvt. Ltd. In case of IQ City Infrastructure Ltd. 2011-12 8,11,10,800/- 7,72,370/- 2012-13 1,90,33,014/- 10,23,170/- 2013-14 6,76,00,960/- - 3. Against all the five orders passed by the AO u/s 143(3) r.w.s. 153A, appeals were preferred by the assessee before the Ld. CIT(A) challenging the additions made therein to the total income for the years under consideration. The Ld. CIT(A) did not fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., a non-existent entity (copies placed at page no. 165 to 167 of the Paper Book) He also invited our attention to the common notice dated 11.09.2019 issued by the AO for all the three years under consideration (copy placed at page no. 176 of the Paper Book) u/s 142(1) to point out even the said notice was issued by the AO in the non-existent entity i.e. M/s. Samudra Vyapaar Pvt. Ltd. He submitted that even the assessments u/s 143(3)/153A for all the three years under consideration i.e. A.Y. 2011-12, 2012-13 and 2013-14 were made by the AO in the name of M/s. Samudra Vyapaar Pvt. Ltd. when the said entity was not in existent. He contended that the assessment proceedings initiated by the AO u/s 143(3)/153A as well as the assessments completed by him u/s 143(3)/153A for all the three years under consideration are invalid, as the same were in the name of M/s. Samudra Vyapaar Pvt. Ltd., the non-existent entity which had already merged / amalgamated into the assessee-company M/s. Mani Square Pvt. Ltd. In support of this contention, he relied on the decision of this Tribunal rendered in assessee's own case vide its order dated 06.08.2020 passed in IT(SS)A Nos. 58 to 62/Kol/2019 and IT(SS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 30.08.2016 in C.P. No. 160 of 2015 connected with C.A. No. 191 of 2014" and in the name of "M/s. IQ City Infrastructure Pvt. Ltd. vide Hon'ble High Court at Calcutta's order dated 12.12.2016 in C.P. No. 864 of 2016 connected with C.A. No. 322 of 2016". He has contended that the said orders thus have been passed by the AO in the name of the amalgamating company, M/s. Mani Square Pvt. Ltd and the names of M/s. Samudra Vyapaar Pvt. Ltd. and M/s. IQ City Infrastructure Pvt. Ltd. mentioned by the AO in the cause title of the assessment orders could not have any material impact on the legal issue raised by the learned counsel for the assessee. He has also contended that the Ld. CIT(A) vide his impugned orders has considered the addition made by the AO in the names of M/s. Samudra Vyapaar Pvt. Ltd. and M/s. IQ City Infrastructure Pvt. Ltd. in the case of the assessee-company in consolidated manner and since he has passed his appellate orders in the name of amalgamating company namely M/s. Mani Square Pvt. Ltd., the legal issue as sought to be raised on behalf of the assessee does not survive. 8. We have considered the rival submissions and also perused the relevant material availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the name of a non-existent entity, then the assessment framed consequent thereto, is non-est in the eyes of law. In this case, the mandatory notice to scrutinize the assessment of the amalgamated company (appointed date of amalgamation dated w.e.f. 01.04.2015) u/s. 143(2) of the Act was issued on 05.10.2018 in the name of the already amalgamated company/non-existing entity [M/s IQCIPL] was void ab initio and therefore, the AO usurped without jurisdiction to assess the non-existing entity (M/s. IQCIPL). So the framing of assessment u/s. 143(3) of the Act without assuming valid jurisdiction is null in the eyes of law. It is settled law that the issuance of mandatory notice in the name of a non-existent entity is an incurable defect and cannot be treated as a procedural irregularity and section 292BB of the Act cannot come to the rescue of revenue. Instead it is a jurisdictional defect which renders the proceedings / assessment non-est in the eyes of law. This legal proposition finds support in the judgments of the Hon'ble Supreme court in the case of M/s. Saraswati Industrial Syndicate Vs. CIT (1990) 186 ITR 278 (SC) and M/s. Spice Infotainment Ltd. Vs. CIT (2012) 247 CTR 500 (De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gamated company, M/s. MSPL, the assessment order shall survive and cannot be held to be bad in law. In this regard, we note that this identical argument was taken by the Revenue before the Hon'ble Supreme Court in the case of CIT Vs Maruti Suzuki India Limited reported in 416 ITR 613 wherein the Hon'ble Apex Court dealt with it as follows: "17. Mr Zoheb Hossain, learned Counsel appearing on behalf of the appellant submitted that: (i) The High Court was not justified in quashing the final assessment order under Section 143 (3) only on the ground that the assessment was framed in the name of the amalgamating company, which was not in existence, ignoring the fact that the names of both the amalgamated company and the amalgamating company were mentioned in the assessment order; (ii) Even on the hypothesis that the assessment order was framed incorrectly in the name of the amalgamating company, it would amount to a "mistake, defect or omission" which is curable under Section 292B when the assessment is, "in substance and effect, in conformity with or according to the intent and purpose" of the Act; (iii) During the assessment proceedings and the subsequent proceedings in appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... malgamation 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 absorbed into one or blended with another, the amalgamating company loses its entity." (iv) Fourthly, upon the amalgamating company ceasing to exist, it cannot be regarded as a person under Section 2(31) of the Act 1961 against whom assessment proceedings can be initiated or an order of assessment passed; (v) Fifthly, a notice under Section 143 (2) was issued on 26 September 2013 to the amalgamating company, SPIL, which was followed by a notice to it under Section 142( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dural 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 December 2010. The Respondent had amalgamated with another company and thus, ceased to exist from 7 December 2009. The Court rejected the argument of the Revenue that the assessment was in substance and effect in conformity with the Act by reason of the fact that the assessing officer had used correct nomenclature in addressing the Assessee; stated the fact that the company had amalgamated and mentioned the correct address of the amalgamated company. It was the Revenue&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... algamating 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 coordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Enfotainment (supra) 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 (supra). (emphasis supplied) 85. In view of the above ratio decidenti of the Hon'ble Apex Court and judicial precedents (supra), the assessee succeeds on the legal issues raised as additional grounds and since in this case, the mandatory notice to scrutinize the assessment of the amalgamated company (appointed date of amalgamation dated w.e.f. 01.04.2015) u/s. 143(2) of the Act was issued on 05.10.2018 in the name of the already amalgamated company/non-existing entity [M/s IQCIPL] was ab-initio void and therefore, the AO usurped to assess without jurisdiction in-respect of the non-existin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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