2018 (4) TMI 1750 - AT - Income Tax

Validity of order u/s 143(3) read with Section 144C in the name of an amalgamating company even after the date of amalgamation as per the specific provisions contained in section 170(1) - HELD THAT - 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 relied upon 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 the assessee on a similar issue has been rendered by the Tribunal for AY 09-10 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 assessment order passed in the name of a non-existent company.
2. Applicability of Section 170(1) and Section 170(2) of the Income Tax Act, 1961.
3. Relevance of judicial precedents in similar cases.
4. Impact of the Supreme Court decision in Sky Light Hospitality LLP vs. ACIT.

Issue-wise Detailed Analysis:

1. Validity of Assessment Order Passed in the Name of a Non-existent Company:
The primary issue raised by the assessee was the validity of the assessment order passed by the AO under Section 143(3) read with Section 144C of the Income Tax Act, 1961, in the name of Genpact Infrastructure (Bhopal) Pvt. Ltd., which had ceased to exist due to amalgamation with Genpact India effective from April 1, 2010. The assessee argued that the order was invalid as it was passed in the name of a non-existent entity. The Tribunal, referencing a similar case for AY 2009-10, quashed the assessment order, holding it invalid for being made in the name of a non-existent company.

2. Applicability of Section 170(1) and Section 170(2) of the Income Tax Act, 1961:
The Revenue contended that the assessment order was valid under Section 170(1), which allows the predecessor (amalgamating company) to be assessed for income up to the date of succession. The Tribunal, however, noted that the Hon’ble Delhi High Court had considered and interpreted both Section 170(1) and 170(2) in similar cases, concluding that assessments must be made in the name of the amalgamated company (successor) after the date of amalgamation. The Tribunal held that the provisions of Section 170(2) applied, making the assessment in the name of the non-existent amalgamating company invalid.

3. Relevance of Judicial Precedents in Similar Cases:
The Tribunal relied on several judicial precedents from the Hon’ble Delhi High Court, including 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 a non-existent amalgamating company are invalid. The Tribunal emphasized that these precedents had considered the provisions of Section 170 and concluded that assessments must be made in the name of the amalgamated company.

4. Impact of the Supreme Court Decision in Sky Light Hospitality LLP vs. ACIT:
The Tribunal addressed the relevance of the Supreme Court decision in Sky Light Hospitality LLP vs. ACIT, where a notice issued under Section 148 in the name of an erstwhile company was deemed valid under Section 292B. The Tribunal distinguished this case, noting that it involved the validity of a notice under Section 148, not an assessment order, and highlighted that the facts were materially different. The Tribunal concluded that the decision in Sky Light Hospitality LLP did not apply to the present case, which involved the validity of an assessment order passed in the name of a non-existent entity.

Conclusion:
The Tribunal quashed the assessment order passed by the AO under Section 143(3) read with Section 144C, holding it invalid for being made in the name of a non-existent company. Consequently, other grounds raised by the assessee regarding the addition on account of transfer pricing adjustment became infructuous or academic. The appeal of the assessee was allowed, and the order was pronounced in the open court on April 27, 2018.

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