2019 (11) TMI 1719 - AT - Income Tax

Assessment order in the name of an entity which is no longer in existence - assessee Company has amalgamated / merged and no longer in existence - HELD THAT - Undisputedly, the final assessment order has been passed in respect of an entity which has ceased to exist long back. Now, it is fairly well settled that no order can be passed in respect of a non- existing entity. The Hon'ble Delhi High Court in Spice Entertainment Ltd. 2011 (8) TMI 544 - DELHI HIGH COURT has held that once a company merges with another company by virtue of a scheme of amalgamation, it will lose its existence after such merger. An order passed against a non-existing entity has to be declared as invalid. Admittedly, in the facts of the present case, the Assessing Officer has passed the final assessment order in the name of a non-existing entity. Therefore, as per the ratio laid down in the judicial precedents referred to above, the assessment order has to be declared as invalid. Accordingly, we do so and quash the final assessment order - Decided in favour of assessee.

Summary

Issues:
Challenge to validity of final assessment order due to incorrect entity name.

Analysis:
The appeal challenges the final assessment order passed under section 143(3) r/w section 144C(13) of the Income Tax Act, 1961 for the assessment year 2008-09, specifically questioning the validity of the order. The assessee argues that the Assessing Officer erroneously issued the final assessment order in the name of an entity that no longer exists, despite being informed about the amalgamation/merger with another company. The Departmental Representative acknowledges a typographical error in omitting the correct name in the final order but argues that it is a curable defect. The Tribunal notes that the entity named in the final assessment order, BASF Polyurethanes India Ltd., had amalgamated/merged with BASF India Ltd., and ceased to exist as per the approved scheme. Citing legal precedents, including decisions by the Hon'ble Supreme Court and Delhi High Court, the Tribunal emphasizes that an order passed in the name of a non-existing entity is invalid. Consequently, the final assessment order is quashed due to being issued against an entity that no longer exists.

The Tribunal further rules that since the assessment order is declared invalid, the grounds challenging the additions made in the order are of academic nature and need not be deliberated upon. Any issues raised in these grounds are left for future adjudication if they arise in subsequent assessment years. Additionally, a redundant ground is dismissed. As a result, the appeal is allowed based on the invalidity of the assessment order due to the incorrect entity name, as pronounced in the open court on 19.11.2019.