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2018 (4) TMI 1663 - AT - Income TaxValidity of assessment made in the name of the amalgamating company being a non-existent entity - assessment order passed in the name of and against a juristic person which had ceased to exist - curable defect u/s 292B - assessment made in the name of amalgamated company being a successor - HELD THAT - The preliminary issue involved in this case relating to the validity of the assessment made in the name of the amalgamating company being a non-existent entity is squarely covered in favour of the assessee by the various decisions of the Hon ble Delhi High Court and atleast there of such decisions are rendered after taking into consideration the provisions of section 170(1) and 170(2). We therefore find no merit in the contention raised by the Ld. D/R in support of the revenue s case by relying on provision of section 170(1) and since the decision in the case of Genpact Infrastructure (Bhopal) Pvt. Ltd. 2018 (2) TMI 873 - ITAT DELHI on a similar issue has been rendered by the Tribunal by relying on the said decisions of the Hon ble jurisdictional High court we respectfully follow the same and quash the assessment order passed by the AO u/s 143(3) read with section 144C by holding the same to be invalid for having made in the name of a non-existent company. Additional ground raised by the assessee in this appeal is accordingly allowed.
Issues Involved:
1. Validity of the assessment order passed in the name of a non-existent company. 2. Applicability of Section 170(1) and 170(2) of the Income Tax Act in the context of amalgamation. Detailed Analysis: Issue 1: Validity of the assessment order passed in the name of a non-existent company. The assessee challenged the validity of the assessment order passed by the Assessing Officer (AO) under Section 143(3) read with Section 144C of the Income Tax Act, arguing that it was issued in the name of a non-existent company. The company, Genpact Infrastructure (Kolkata) Pvt. Ltd., had amalgamated with Genpact India with effect from April 1, 2010, as per the order of the Hon'ble Delhi High Court dated November 19, 2010. Despite being informed of the amalgamation via a letter dated January 24, 2011, the AO issued the final order on November 28, 2014, in the name of the non-existent entity. The assessee contended that this rendered the order invalid and liable to be quashed, citing similar cases where the Tribunal had quashed assessments made in the name of non-existent entities. Issue 2: Applicability of Section 170(1) and 170(2) of the Income Tax Act in the context of amalgamation. The Revenue argued that the order was valid under Section 170(1) of the Act, which allows the predecessor (amalgamating company) to be assessed for income up to the date of succession. The AO contended that since the properties and liabilities of the amalgamating company were transferred to the amalgamated company, the assessment could be made in the name of the predecessor. The Revenue further argued that Section 170(2) applies only when the predecessor cannot be found, which is not the case in amalgamation scenarios. Tribunal’s Findings: 1. Precedent Cases: - The Tribunal referenced its own decision in the case of Genpact Infrastructure (Bhopal) Pvt. Ltd., where a similar issue was raised and the assessment order was quashed as it was issued in the name of a non-existent entity. - The Tribunal also considered judicial pronouncements from the Hon'ble Delhi High Court in cases like CIT vs. Micra India (P) Ltd., CIT vs. Dimension Apparels (P) Ltd., and PCIT vs. Maruti Suzuki, which held that assessments made in the name of amalgamating companies after the date of amalgamation are invalid. 2. Section 170 Analysis: - The Tribunal noted that in the case of Dimension Apparels (P) Ltd., the Hon'ble Delhi High Court had considered both Section 170(1) and 170(2) and concluded that post-amalgamation assessments must be made in the name of the amalgamated company. - The Tribunal highlighted that the Hon'ble Delhi High Court in Maruti Suzuki held that assessments made in the name of non-existent companies are invalid, reinforcing that assessments should be made in the name of the successor company. 3. Distinction from Sky Light Hospitality Case: - The Tribunal distinguished the present case from the Sky Light Hospitality LLP case, where the Hon'ble Supreme Court upheld the validity of a notice issued under Section 148 despite the procedural lapse. The Tribunal pointed out that the Sky Light case involved a different context (notice under Section 148) and substantial affirmative material, unlike the present case, which involved the validity of an assessment order. Conclusion: The Tribunal quashed the assessment order passed by the AO under Section 143(3) read with Section 144C, holding it to be invalid as it was issued in the name of a non-existent company. Consequently, the other grounds challenging the addition on account of transfer pricing adjustment were rendered academic and not adjudicated. The appeal of the assessee was allowed.
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