2022 (4) TMI 1464 - AT - Income Tax

Assessment order on a non-existing entity - notice in the name of company amalgamated - HELD THAT - As observed that the AO has clearly understood and recorded that the erstwhile company State Bank of Bikaner and Jaipur was acquired by/amalgamated into M/s. State Bank of India w.e.f 01.04.2017 still he passed the Assessment Order in the erstwhile company. As relying on case MARUTI SUZUKI INDIA LIMITED 2019 (7) TMI 1449 - SUPREME COURT we hold that the Assessment Order passed in the name of the erstwhile company is void ab initio. Accordingly, assessment order passed is quashed. The other grounds raised by the assessee are not adjudicated. Appeal filed by the Revenue is dismissed.

Summary

Issues:
Appeal against the order of the Learned Commissioner of Income Tax (Appeals) for the A.Y. 2016-17. Additional ground raised by the assessee regarding the assessment order on a non-existing entity. Validity of the assessment order passed in the name of an erstwhile company acquired by another entity. Interpretation of the decision in PCIT v. Maruti Suzuki India Ltd. regarding assessment proceedings against a ceased entity.

Analysis:
The appeal before the Appellate Tribunal ITAT Mumbai involved challenges against the order of the Learned Commissioner of Income Tax (Appeals) for the assessment year 2016-17. The assessee raised additional grounds objecting to the assessment order passed on a non-existing entity, contending that it was void ab initio under Rule 11 of the Income Tax Rules, 1963. This additional ground was admitted for adjudication as it was a legal issue fundamental to the case.

During the hearing, it was revealed that the Assessing Officer had noted in the assessment order that the erstwhile State Bank of Bikaner and Jaipur had been acquired by/amalgamated into M/s. State Bank of India. However, the assessment order was still passed in the name of the erstwhile company. The assessee cited the decision of the Hon'ble Supreme Court in PCIT v. Maruti Suzuki India Ltd., which emphasized that assessment proceedings against a ceased entity were void ab initio. The Assessing Officer's actions were disputed by the assessee, leading to a disagreement between the parties.

After considering the submissions and evidence, the Tribunal observed that despite the amalgamation of the companies, the Assessment Order was erroneously passed in the name of the erstwhile entity. Citing the precedent set by the Hon'ble Supreme Court in PCIT v. Maruti Suzuki India Ltd., the Tribunal concluded that the Assessment Order passed in the name of the ceased entity was void ab initio. Consequently, the assessment order was quashed, and the other grounds raised by the assessee were not addressed.

The Tribunal also noted that the cross-appeal filed by the Revenue became infructuous due to the decision on the main appeal. As a result, the appeal filed by the assessee was partly allowed, while the appeal filed by the Revenue was dismissed. The judgment was pronounced in open court on 25.04.2022, bringing the matter to a conclusion.