TMI Blog2023 (6) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... al Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri Porus Kaka, SR Advocate For the Revenue : Shri Biswanath Das CIT-DR ORDER PER: PRASHANT MAHARISHI, A. M. 01. Assessee has filed appeal for Assessment Year (AY) 2014-15 against the assessment order passed by the ACIT-16(1), Mumbai (learned AO) dated 22.11.2018 passed under section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (The Act) pursuant to the directions of the learned Dispute Resolution Panel (DRP)-2, Mumbai [the ld DRP] dated 28.09.2018. 02. Assessee is aggrieved with Assessment order based on the direction of the ld DRP pursuant to which Return of income filed by the assessee in the name of non existent company was held to be non est and consequent revised return filed was also treated as Non est. Refund claimed by the assessee in ROI of Rs 43,90,32,670/- was denied and assessee was advised to approach CBDT u/s 119 (2) of The Act. 03. The learned AO is aggrieved with the directions of the LD DRP holding the draft Assessment order passed as void ab initio and so is in Appeal by cross Objection. 04. Brief facts of the case shows that the assessee is an I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned DRP held that the draft assessment order passed in the name of Star sports India Private Limited has to be considered as void ab initio. The reasons for such directions were that the draft assessment order is passed in the name of Star Sports India Pvt Limited , a non existing company, instead of in the name of Star India Private Limited. 08. The learned dispute resolution panel noted in its direction dated 28/9/2018 passed in the name of Star India Private Limited [ Amalgamated company] that:- i On 30th November, 2014 the assessee filed its original return of income in the name of Star Sports India Pvt. Ltd. for AY 2014-15 using the permanent account number of AAACE2334C which belonged to the non existing entity Star sports India private limited. The return was signed by one Mr Sanjay Gupta in the capacity of director of Star Sports India Private Limited, non-existent entity. This return of income was made as part of direction of the learned dispute resolution panel as annexure A. ii Subsequently a revised return was filed in the name of Star sports India private limited [ non-existent entity] on 30/3/2016 which was signed by Mr Rishi Gaind who was a director in St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the four corners of the law. According to them the company is a juristic personality which not only comes into existence by operation of law but it cessation also takes place by operation of law. It further held that the original return was filed after the amalgamation in the name of amalgamating company i.e. Star sports India private limited and was also signed by the director of that company prior to amalgamation. Thus despite the fact of amalgamation, the return of income was filed in the name of amalgamating company and duly verified by the director of amalgamating company. Therefore the filing of income tax return and verification by the person who was director prior to the amalgamation was not proper and invalid and therefore the return of income filed by the company which did not exist on the date of filing of the return has to be treated as non est. Accordingly the return of income filed on 30/11/2014 was treated as Non est. The LD DRP further noted that the subsequent revised return was also filed in the name of Star sports India private limited, a non-existent company but was signed by the director of Star India private limited i.e. amalgamated company filed in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 152,041,840. In the assessment order passed, the learned assessing officer noted that assessee is not eligible for issue of refund of ₹ 439,032,670 as claimed in the income tax return filed for assessment year 2014-15 as it has been treated as non- est. 10. Therefore, both the parties are in appeal before us. 11. The learned authorised representative submitted that i On 17th December, 2014 the assessee intimated to the ACIT, Large Tax Payer Unit, New Delhi along with copy of letter to the Commissioner of Income Tax, LTU, New Delhi stating that Star Sports India P. Ltd. has merged with Star India Pvt. Ltd. as per scheme of amalgamation approved by the Hon ble High Court as per order dated 22nd August, 2014. The appointed date is 4th November, 2013 on which date the assessee shall stand amalgamated with Star India Pvt. Ltd. Therefore as on 21st November, 2014 being effective date of amalgamation Star sports India private limited has merged with Star India Pvt. Ltd. ii On 28th August, 2015 a notice under section 143(2) of the Act was issued by the ACIT, Circle-1, LTU, New Delhi in the name of Star Sports India Pvt. Ltd. On September 10, 2015 the assessee respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the TPO, both are invalid as it has been passed on a non-existent person and therefore to be quashed. vi He further submitted that the assessee has claimed refund of Rs. 44,24,95,990/-, The DRP held that as there is no valid return available/filed by the assessee there is no authority available with the AO or the DRP to grant refund. He submitted that the return of income filed by the assessee on 30th March, 2016 is a valid return. Further if the return filed by the assessee is found to be defective in any manner, the prescribed procedures under section 139(9) of the Act is laid down. He relied upon several judicial precedents that without following that procedure the return of income filed by the assessee cannot be treated as invalid. He submitted that the refund must be granted to the assessee as per the provisions of section 240 of the Act and accordingly treating of the validly filed return as invalid return without following the procedure of section 139(9) of the Act with the sole intention of denying refund to the assessee is not justified. He extensively referred to his factual paper book filed containing 13 documents, supplementary factual paper book adding one more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of MP State Agro industries development Corporation Ltd versus CIT 274 ITR 582 wherein on filing of tax audit report along with the return of income was held to be a curable defect. In that case the defect could not be removed within allowed time of 15 days and assessee asked for the extension of time which was not accepted. The defect was cured letter on. The honourable High Court held that the return of income filed by the assessee could not be treated as invalid as the learned assessing officer should have extended time. He further submitted that the refund must be granted to the assessee under section 240 of the act read with article 265 of the Constitution of India for the reason that no tax can be collected without authority of law. He further relied upon the judgement of the honourable Karnataka High Court in case of K Nagesh versus ACIT 376 ITR 173, wherein the revised return filed by the assessee was declared invalid and therefore tax and interest amount offered by the assessee based on such elevated invalid return was held to be refundable to the assessee. For this proposition he further referred to the decision of the honourable madras High Court in case of Dr Tirupat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in limini. The direction of the DRP is binding on the AO. Therefore refund cannot be granted. He referred to the provisions of Section 139(9) of the Act and stated that the revised return can be filed only in the case when a person discovers any omission or any wrong statement. Therefore, the revised return filed by the assessee is also not valid. 14. The learned A.R. in his rejoinder reiterated his submissions. 15. We have carefully considered the rival contentions and perused the orders of the lower authorities. The fact lies in a very narrow compass. i Vide order dated 22.08.2014 the Hon ble Bombay High Court approved the company s scheme petition of 229/2014 wherein the Star Sports India Pvt. Ltd. in a scheme of amalgamation amalgamated with Star India Pvt. Ltd. having appointed date of 4th November, 2013 and effective date of 21st November, 2014. ii Star India Pvt. Ltd. having PAN No. AAACE2334C filed its return of income on 30.11.2014 duly signed by its Director Mr Sanjay Gupta. iii Thus it is clear that when the assessee filed the original return of Income , on 30th November, 2014, the assessee Star Sports India Pvt. Ltd. got amalgamated with Star India Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not furnished under section 203 or section 206C to the person furnishing his return of income;] (b) such certificate is produced within a period of two years specified under sub-section (14) of section 155;] (ii) the amount of compulsory deposit, if any, claimed to have been made under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 (38 of 1974*); 11 [(ca) the return is accompanied by the proof of payment of tax as required under section 140B, if the return of income is a return furnished under sub-section (8A);] (d) where regular books of account are maintained by the assessee, the return is accompanied by copies of (i) manufacturing account, trading account, profit and loss account or, as the case may be, income and expenditure account or any other similar account and balance sheet; (ii) in the case of a proprietary business or profession, the personal account of the proprietor; in the case of a firm, association of persons or body of individuals, personal accounts of the partners or members; and in the case of a partner or member of a firm, association of persons or body of individuals, also his personal account in the firm, association of per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is accepted as income from business or profession of Rs (-) 22,13,34,792/- and income from other sources is Rs 69292952/-. Thus ld AO assessed the total income of the assessee at Rs (-) 15,20,41,840/-. According to section 199 of the Act for credit of tax deducted at source made according to the provisions Chapter XVII and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made. Assessee has admitted tax liability of Rs 2,41,42,849/- and TDS of Rs 46,31,75,516/-. Thus Refund of Rs 43,90,32,670/- was due. Therefore, when the ld AO has assessed assessee at the income of Rs (-) 15,2041,840/- then , he is duty bound to compute the tax liability considering the provision of section 199 of the Act and if the tax is due same is recoverable and if any refund is due same should be granted. xx Thus even if the ROI filed by the assessee is non est, it resulted in to a situation when Assessee has not at all filed the ROI. But even in that case, the ld AO needs to assess the assessee and after computing tax liability duty bound to issue RO or Demand intimation. 16. In view of above, we hold that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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