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2013 (12) TMI 1103 - AT - Income TaxAssessment of amalgamated company Valid or not Held that - Following Micra India Pvt.Ltd 2013 (11) TMI 679 - ITAT DELHI - On amalgamation, the company seizes to exist in the eyes of the law - Assessment upon a dissolved company is impermissible as there is no provisions in Income Tax Act to make an assessment thereupon - The assessment on a company which has been dissolved by amalgamation u/s 391 and 394 of the Companies Act, 1956 is invalid Following Spice Entertainment Ltd. Vs. CIT 2011 (8) TMI 544 - DELHI HIGH COURT - 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. - Provisions of Section 292B of the Act are not applicable in such a case. - The framing of assessment against a non-existing entity/person is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a dead person Decided against Revenue.
Issues Involved:
1. Validity of assessment on a dissolved/amalgamated company under sections 391 and 394 of the Companies Act, 1956. 2. Whether the assessment order passed on a non-existing entity is void. 3. The applicability of various judicial precedents on the issue. 4. The consequence of quashing the assessment order on the merits of various additions made by the Assessing Officer. 5. Cross-objections filed by the assessee. Issue-wise Detailed Analysis: 1. Validity of assessment on a dissolved/amalgamated company: The primary issue was whether the assessment on a company that had been dissolved or amalgamated under sections 391 and 394 of the Companies Act, 1956, is valid. The Tribunal noted that the assessee company, M/s SPN Milk Product Industries Pvt. Ltd., was amalgamated with M/s Sanskar Projects & Housing Limited as per the order of the Hon'ble Delhi High Court dated 28th May 2010. Consequently, the Tribunal held that the assessment on a company that has been amalgamated and thus ceased to exist is invalid. This conclusion was supported by various judicial precedents, including the cases of Impsat (P) Ltd. Vs. Income Tax Officer and Commissioner of Income Tax Vs. Vived Marketing Servicing Pvt. Ltd., which established that assessments on dissolved companies are invalid. 2. Assessment order on a non-existing entity: The Tribunal found that the assessment order passed on the non-existing entity (M/s SPN Milk Product Industries Pvt. Ltd.) was void. This was consistent with the decision in Spice Entertainment Ltd. Vs. CIT, where it was held that an assessment order passed on a non-existing entity is void and such a defect cannot be treated as a procedural defect. The Tribunal emphasized that even though the assessee participated in the assessment proceedings, it did not cure the jurisdictional defect of assessing a non-existent entity. 3. Judicial precedents: The Tribunal referred to several judicial precedents to support its decision. Key cases included: - Impsat (P) Ltd. Vs. Income Tax Officer, which held that assessments on dissolved companies are invalid. - Commissioner of Income Tax Vs. Vived Marketing Servicing Pvt. Ltd., which affirmed that assessments on non-existing entities are void. - Spice Entertainment Ltd. Vs. CIT, which clarified that assessments on non-existing entities due to amalgamation are void and participation in proceedings does not validate such assessments. 4. Consequence of quashing the assessment order: Since the Tribunal quashed the assessment order itself, the various additions made by the Assessing Officer did not survive. Therefore, the Tribunal dismissed the other grounds of the Revenue's appeals as infructuous. The Tribunal also observed that the Assessing Officer is at liberty to take appropriate action in the case of the appropriate entity in accordance with the law, subject to the time limit prescribed under the Act. 5. Cross-objections filed by the assessee: No specific arguments were advanced by the assessee's counsel regarding the cross-objections. Consequently, the Tribunal presumed that the cross-objections were not pressed and dismissed them accordingly. Conclusion: The Tribunal upheld the order of the learned CIT(A) that the assessment on a company which has been dissolved/amalgamated is invalid. The Tribunal dismissed the Revenue's appeals and the assessee's cross-objections, affirming that the assessment order passed on the non-existing entity (M/s SPN Milk Product Industries Pvt. Ltd.) was void. The decision was pronounced in the open Court on 22nd February 2013.
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