2019 (9) TMI 1379 - HC - Income Tax

Draft order u/s 143 (3) r.w.s.144C - order in the name of the predecessor of the amalgamated company - amalgamation scheme informed to AO - HELD THAT - As decided in MARUTI SUZUKI INDIA LIMITED 2019 (7) TMI 1449 - SUPREME COURT despite the fact that the AO was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. No merit in the present appeal and no question arises for consideration.

Summary

Issues:
1. Correction of cause title in the present appeal.
2. Competency of the order passed by the Assessing Officer despite notice of amalgamation.
3. Jurisdictional notice issued in the name of the predecessor of the amalgamated company.
4. Legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation.

Correction of Cause Title:
The respondent sought correction of the cause title in the appeal, stating that the name mentioned was incorrect. The correction was allowed as it was unopposed, and the respondent's name was corrected to the accurate "Genpact India Pvt. Ltd." The amended memo of parties was accepted and filed along with the application.

Competency of Assessing Officer's Order:
The revenue appealed against the order passed by the Income Tax Appellate Tribunal for the assessment year 2010-11. The Assessing Officer had notice of the amalgamation but still issued a draft order in the name of the predecessor of the respondent assessee, which was deemed incompetent. The Supreme Court, in a recent decision, emphasized that the jurisdiction invoked based on the amalgamating entity's name, despite its cessation post-amalgamation, was legally flawed. The court held that participation in proceedings by the appellant could not create an estoppel against the law. Citing precedents, the court dismissed the appeal, stating that there was no merit in the case, and no question required consideration.

Jurisdictional Notice Issue:
Despite being informed of the amalgamation, the Assessing Officer issued a draft order in the name of the amalgamated company's predecessor. This action was found to be fundamentally at odds with the legal principle that the amalgamating entity ceases to exist post-amalgamation. The court highlighted that the basis for invoking jurisdiction was incorrect, as per legal principles, leading to the dismissal of the appeal.

Legal Principle of Amalgamating Entity Ceasing to Exist:
The judgment underscored the legal principle that an amalgamating entity ceases to exist upon the approved scheme of amalgamation. The court emphasized that issuing notices or orders in the name of the predecessor of the amalgamated company, post-amalgamation, was legally incorrect. Citing relevant cases and legal precedents, the court dismissed the appeal, affirming the position that the amalgamating entity's existence ceases upon amalgamation, and proceedings should reflect this legal reality.