TMI Blog2019 (5) TMI 1968X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is accordingly allowed for statistical purpose. - ITA No. 2183/Del/2018 - - - Dated:- 2-5-2019 - R.K Panda, Accountant Member For the Appellant : Sh. Arun Chhabra, CA, Sh. Gaurav Mital, CA. For the Respondent : Sh. Amit Jain, Sr. DR. ORDER PER R.K. PANDA, AM : 1. This appeal filed by the assessee is directed against the order dated 12.09.2017 of the CIT(A)-25, New Delhi relating to A. Y. 2014-15. 2. Facts of the case, in brief, are that the assessee is a company and filed its return of income on 29.09.2014 declaring loss of Rs.33,18,009/-. The Assessing Officer completed the assessment u/s 143 (3) on a total income of Rs.11,47,350/- wherein he made addition of Rs.45,35,355/- on account of mismatch in the 26AS income and the income declared in the income tax return. 3. Before CIT(A) the assessee, apart from challenging the addition on merit, submitted that during the year under consideration the assessee company was amalgamated with M/s. Value First Digital Media Private Limited which was the holding company of the assessee. The assessee was amalgamated w.e.f. 01 January 2014 vide scheme of amalgamation between assessee company and M/s. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce from 01.01.14. It was also noticed that the present Appeal was filed on 15.11.16 in the name of M/s Cellnext Solutions Ltd. with the PAN : AABCC3935G. During the appellate proceedings on 24.08.2017, when the case was partly discussed, it was pointed out to Sh. Umesh Chand Goyal, CA and Sh, Ram Avtar Sharma, CA, the Learned Counsels of the Appellant that on one hand it was claimed that the Appellant Company stood Dissolved and was not having any Legal Existence from 01.01.14, but the present Appeal was filed on 15.11,16 in the name of M/s Cellnext Solutions Ltd., and thus the Appeal was filed in the name of a Company which stood Dissolved and was not having any Legal Existence, and that the Learned Counsels were arguing on behalf of a Company which they themselves in the Written Submissions filed by them claimed to be nonexistent. The Learned Counsels were required to explain as to why the Appeal should not be treated as invalid. 8.11 However, on the subsequent hearing, i.e. on 06.09.17, Sh. Ram Avtar Sharma, CA, the Learned Counsel of the Appellant attended and filed Written Submissions dated and Application u/s 250(5) seeking permission to raise Additional Grounds, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure that the Income for the year under consideration i.e. AY 14-15 is brought to tax in the hands of the appropriate entity. 5. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal :- 1.0 That on the facts and in the circumstances of the case and in law, the order passed by the Learned Commissioner of Income-tax (Appeals) ('Ld. CIT(A) ) is erroneous and bad in law. 2.0 Initiation of assessment proceedings on a non-existent entity 2.1 On the facts and circumstances of the case and law, the Learned Assessing Officer ( Ld. AO ) erred in initiation of assessment proceedings on a non-existent entity which was merged with M/s ValueFirst Digital Media Pvt. Ltd. with effect from January 1, 2014. 2.2 On the facts and circumstances of the case, the notices issued under section 143(2) of the Act and subsequent assessment order passed under section 143(3) of the Act is bad in law and void ab initio. 2.3 On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in rejecting the appeal filed by the appellant. 3.0 Addition of business income not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been framed on a nonexistent company. 8. I have considered the rival arguments made by both the sides and perused the orders of the authorities below. I have also considered the various decisions cited before me. The only issue to be decided in the impugned appeal is as to whether the assessment framed in the name of M/s. Cellnext Solution Private Limited instead of Value First Digital India Private Limited is correct as per law or not. It is submission of the Ld. Counsel for the assessee that the assessee M/s. Cellnext Solutions Limited was the holding company of the assessee. The assessee was amalgamated w.e.f. 01.01.2014 vide scheme of amalgamation between assessee company and M/s. Value First Digital Media Private Limited the scheme was sanctioned by the Hon ble Delhi High Court vide order dated 11.08.2014 and 19.08.2014 w.e.f. 01.01.2014. I find the assessee company filed its return of income on 29.09.2014 in the name of M/s. Cellnext Solutions Private Limited under these circumstances when the assessee itself has filed return of income in the name of Cellnext Solutions Private Limited on 29.09.2014 whereas the scheme of amalgamation was sanctioned by the Hon ble Delhi H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation is a blending of two or more existing undertakings into one undertaking, the share holders of each blending Company become substantially the share holders 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 Halsburys Laws of England 4th Edition Vol. 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. The Court referred to its earlier judgment in General Radio and Appliances Co. Ltd. Vs. M.A. Khader (1986) 60 Comp Case 1013. In view of the aforesaid clinching position in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceedings is in substance and effect in conformity with or according to the intent and purpose of this Act. 12. The Punjab Haryana High Court stated the effect of this provision in CIT Vs. Norton Motors, 275 ITR 595 in the following manner:- A reading of the above reproduced provision makes it clear that a mistake, defect or omission in the return of income, assessment, notice, summons or other proceeding is not sufficient to invalidate an action taken by the competent authority, provided that such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the provisions of the Act. To put it differently, Section 292B can be relied upon for resisting a challenge to the notice, etc., only if there is a technical defect or omission in it. However, there is nothing in the plain language of that section from which it can be inferred that the same can be relied upon for curing a jurisdictional defect in the assessment notice, summons or other proceeding. In other words, if the notice, summons or other pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der to be passed under section 147 of the Act and when such a notice is not issued and assessment made, such a defect cannot be treated as cured under Section 292B of the Act. The Court observed that this provisions condones the invalidity which arises merely by mistake, defect or omission in a notice, if in substance and effect it is in conformity with or according to the intent and purpose of this Act. Since no valid notice was served on the assessee to reassess the income, all the consequent proceedings were null and void and it was not a case of irregularity. Therefore, Section 292B of the Act had no application. 15. When we apply the ratio of aforesaid cases to the facts of this case, the irresistible conclusion would be provisions of Section 292B of the Act are not applicable in such a case. 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 person . 16. The order of the Tribunal is, therefore, clearly unsustainable. We, thus, decide the questions of law in favour of the assessee and against the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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