2018 (5) TMI 740 - AT - Income Tax

Framing of assessment against a non-existing entity/person - procedural irregularity and a jurisdictional defect - assessee company already amalgamated with other - validity of assessment - issue of notice u/s 14(2) - Held that - As assessment has been framed on a non-existing entity and, therefore, the assessment order has to be quashed. We order accordingly and set aside the findings of the CIT(A) by quashing the assessment order. - Decided in favour of assessee.

Summary

Issues:
1. Challenge to jurisdiction of Assessing Officer.
2. Disallowances made in the assessment order.

Analysis:
1. The appellant challenged the jurisdiction of the Assessing Officer, alleging that the assessment was wrongly framed on an entity that did not exist due to an amalgamation. The CIT(A) noted that the appellant did not inform the assessing officer about the amalgamation during the assessment proceedings. The CIT(A) held that the actions of the assessing officer were covered by section 292BB, as the appellant failed to provide relevant facts regarding the merger. The appellant contended that the assessment was void ab initio due to being framed on a non-existent person.

2. The Hon'ble High Court had sanctioned the Scheme of Amalgamation involving the appellant company. The appellant later informed the Deputy Commissioner about the merger with another company. The Tribunal found that the first notice under section 143(2) was served on the appellant before the amalgamation. Citing relevant case law, the Tribunal held that assessment against a non-existing entity is a jurisdictional defect and cannot be cured by procedural provisions. The Tribunal quashed the assessment order, considering it a nullity due to being framed on a non-existent entity.

In conclusion, the Tribunal allowed the appeal, setting aside the findings of the CIT(A) and quashing the assessment order as it was based on a non-existing entity. The Tribunal did not delve into the case's merits, given the assessment's nullity. The decision was pronounced on 02.05.2018.