2014 (11) TMI 1020 - AT - Income Tax

Assessment order passed on the amalgamated company - Initiation of proceedings u/s 153A - Addition u/s 69C - Held that - Respectfully following the Hon ble Delhi High Court s decision in the case of Vived Marketing Services Pvt. Ltd. (2009 (9) TMI 917 - Delhi high court), it is held that the assessment order passed on the amalgamated company is not amenable to assessment proceedings as no assessment could be framed on a non-existent entity. Accordingly, the impugned assessment orders framed by the AO are quashed. - Decided in favour of assessee.

Summary

Issues involved:
Initiation of proceedings u/s 153A and completion of assessments on a non-existent company due to its merger with another company.

Analysis:
The judgment involves cross-appeals by the assessee and the department against separate orders of CIT(A) for various assessment years. The common issue pertains to the initiation of proceedings u/s 153A and completion of assessments on a company that had merged with another entity. The assessee challenged the legality of assessments post-merger, contending that the company had become non-existent due to amalgamation. The counsel cited the Companies Act and relevant court orders to support the argument that assessments on dissolved entities are invalid.

The counsel highlighted the ITAT Delhi Bench's decision in a similar case, emphasizing that assessments on non-existent entities are null and void. Referring to the Companies Act and legal precedents, the counsel argued that assessments on dissolved companies lack legal basis. The judgment extensively quoted the ITAT's observations and relevant legal provisions to support the conclusion that assessments on merged or dissolved entities are impermissible under the law.

The judgment extensively discussed the legal implications of company amalgamation and dissolution, emphasizing that assessments on dissolved entities are legally untenable. Quoting relevant legal provisions and court decisions, the judgment reiterated that assessments on non-existent companies are invalid. The judgment cited various court decisions and statutory provisions to establish that assessments on merged or dissolved entities are legally impermissible, ultimately quashing the impugned assessments due to the company's non-existence post-merger.

The judgment, aligning with legal principles and precedents, concluded that assessments on amalgamated or dissolved companies are not valid. Citing relevant legal provisions and court decisions, the judgment upheld the assessee's appeal, quashing the assessments conducted on the company that had merged with another entity. The judgment emphasized the legal consequences of company amalgamation and dissolution, ultimately ruling in favor of the assessee due to the non-existence of the company post-merger.

In conclusion, the judgment quashed the impugned assessments conducted on the company that had merged with another entity, citing legal provisions and court decisions that render assessments on dissolved entities invalid. The judgment upheld the assessee's appeal, emphasizing the legal implications of company amalgamation and dissolution in assessment proceedings.