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2017 (4) TMI 1339 - AT - Income TaxValidity of assessment - framing an assessment against the appellant company which ceased to exist, consequent to the order of merger - Held that - Undisputedly notice was issued u/s. 143(2) on 31.07.2012 and till then, there is nothing on record to establish that the fact of merger was brought to the notice of AO. The assessment was completed on 27.03.2015 and in the assessment order, the AO has mentioned against the name of assessee as M/s. GE Medical Systems (India) Pvt. Ltd. (Since merged with M/s. Wipro GE Healthcare Pvt Ltd.), meaning thereby that during the assessment proceedings, these facts were brought to the notice of the AO. While passing the order, the DRP has also passed the order though in the name of merged company i.e., M/s. Wipro GE Healthcare Pvt Ltd., but the PAN No. is of the erstwhile company i.e., M/s. GE Medical Systems (India) Pvt. Ltd. Despite this defect in the order of DRP with regard to PAN No., the assessee has not pointed out these facts to the AO and the AO has committed the same mistake by mentioning the PAN No. of erstwhile company. Thus complete facts were not brought to the notice of AO at the time of completion of assessment as nothing has been placed on record by the assessee to demonstrate that assessee has furnished the name of the merged company along with their PAN No - for the mistake in the assessment order, the AO alone cannot be held responsible and the assessee is also equally responsible for it - set aside the order of the AO and restore the matter to his file with a direction to pass appropriate order in the name of merged company against its PAN No. - Decided in favour of assessee for statistical purposes.
Issues Involved:
1. Validity of Assessment Jurisdiction 2. Issue of Transfer Pricing 3. Other Issues/Additions/Disallowances 4. Issue of Interest u/s 234A, B, and 234C Validity of Assessment Jurisdiction: The appeal challenges the assessment framed against the appellant company that had ceased to exist due to a merger. The appellant argues that the assessment against a non-existent entity is unlawful and that the successor company was already being assessed separately. The tribunal found that the fact of merger was not brought to the attention of the Assessing Officer (AO) during the assessment proceedings. While the Dispute Resolution Panel (DRP) recognized the merger in its order, it used the PAN number of the erstwhile company, causing confusion. The tribunal held that both the AO and the appellant were responsible for the oversight. Consequently, the tribunal set aside the AO's order and directed a re-assessment in the name of the merged company. Issue of Transfer Pricing: The appellant disputes the Transfer Pricing Officer's order and the DRP's directions, alleging violations of jurisdiction and principles of law. The appellant challenges the adjustments made towards Software Development Services, IT Enabled Services, and Contract Manufacturing, arguing lack of opportunity and errors in the adjustments. The tribunal noted discrepancies in the DRP's considerations and directions, emphasizing the need for a fair opportunity and proper application of the law. The tribunal found faults in the adjustments made and the failure to identify comparables as per Rule 10B(3). It highlighted the importance of providing adequate opportunity and following established methods in transfer pricing assessments. Other Issues/Additions/Disallowances: The appellant raised concerns regarding disallowances under sections 40(a)(ia) of the Act for professional fees and rent paid, emphasizing the proof of tax deductions. The tribunal observed that the DRP failed to address these disallowances adequately. Additionally, the appellant challenged the imposition of interest under sections 234A, B, and C of the Act, denying liabilities and seeking relief based on legal precedents. The tribunal noted the lack of opportunity given before levying interest and the appellant's right to seek waiver. The appellant also reserved the right to modify the grounds raised during the appeal. Issue of Interest u/s 234A, B and 234C: The appellant contested the interest liabilities under these sections, arguing that interest should only be levied on the returned income. The appellant sought relief based on legal decisions and requested waiver options. The tribunal acknowledged the appellant's denial of interest liabilities and reserved the right to address these issues further with the appropriate authorities. The appellant also cited legal cases to support their position on interest liabilities related to adjustments made under section 92CA of the Act. This comprehensive summary provides a detailed analysis of the issues raised in the legal judgment, covering the arguments presented by the appellant, the tribunal's findings, and the legal implications of each issue addressed in the judgment.
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