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2020 (2) TMI 1035 - AT - Income TaxAssessment u/s 153A - jurisdiction of ACIT to issue notice - scheme of amalgamation conceived - HELD THAT - Jurisdiction over the assessee i.e. M/s Pride Residency Pvt. Ltd. lied with the Assistant Commissioner of Income Circle-20(1) New Delhi. CIT(A) has referred to the assessment order passed by the ACIT Circle-20(1) New Delhi for assessment year 2014-15 on 26/07/2016. But the impugned assessment order has been passed by the ACIT CC-13 New Delhi who had jurisdiction over the amalgamating entity i.e. M/s Stakar Fincap Pvt. Ltd. Thus it is evident that the impugned assessment order in the name of M/s Pride Residency Private Limited has been passed by the ACIT CC-13 New Delhi without jurisdiction over the case. In view of lack of the jurisdiction the impugned assessment order passed by the ACIT CC-13 New Delhi in the case of the assessee is void-ab initio and accordingly quashed. - Decided against revenue.
Issues Involved:
1. Validity of the assessment order made in the name of a non-existent entity. 2. Jurisdiction of the Assessing Officer over the correct legal entity. 3. Applicability of Section 292B of the Income Tax Act for correcting errors in the assessment order. Detailed Analysis: 1. Validity of the Assessment Order Made in the Name of a Non-Existent Entity: The core issue revolves around the assessment order passed by the Assessing Officer (AO) in the name of M/s. Satkar Fincap Private Limited, which had already amalgamated with M/s. Pride Residency Private Limited. The amalgamation was effective from 01/04/2011, as per the order dated 17/08/2012 by the Hon'ble High Court of Delhi. The Principal Commissioner of Income Tax (PCIT) had earlier quashed the assessment made under section 153A of the Income Tax Act, 1961, on the grounds that the AO had passed the order in the name of a non-existent entity. The PCIT directed the AO to reassess the income in the hands of the existing correct legal entity, i.e., M/s. Pride Residency Private Limited. Despite these directions, the AO issued a notice under section 153A in the name of M/s. Satkar Fincap Private Limited and completed the assessment in the name of M/s. Pride Residency Private Limited but mentioned the PAN of the non-existent entity. The CIT(A) quashed the assessment on the grounds that the notice was issued to a non-existent entity, making the assessment void. 2. Jurisdiction of the Assessing Officer Over the Correct Legal Entity: The CIT(A) highlighted another critical issue regarding the jurisdiction of the AO. The jurisdiction over M/s. Pride Residency Private Limited lied with the Assistant Commissioner of Income Tax, Circle-20(1), New Delhi, not with the ACIT, Central Circle-13, New Delhi, who had jurisdiction over the amalgamating entity, M/s. Satkar Fincap Private Limited. The assessment order dated 26/07/2016 for the assessment year 2014-15 was passed by the ACIT, Circle-20(1), New Delhi, confirming the jurisdiction over M/s. Pride Residency Private Limited. Therefore, the impugned assessment order passed by the ACIT, Central Circle-13, New Delhi, was without jurisdiction and deemed void-ab initio. 3. Applicability of Section 292B of the Income Tax Act for Correcting Errors in the Assessment Order: The Revenue argued that the errors in issuing the notice in the name of a non-existent entity and mentioning the incorrect PAN could be corrected under section 292B of the Income Tax Act, referring to the decision of the Hon'ble Supreme Court in the case of Sky Light Hospitality LLP Vs. ACIT. However, the Tribunal found that the jurisdictional error was a more significant issue than the mere technical error of incorrect PAN or name. The Tribunal did not delve into the merits of this argument due to the overriding issue of jurisdiction. Conclusion: The Tribunal dismissed the appeal of the Revenue, holding that the assessment order was void due to the lack of jurisdiction by the ACIT, Central Circle-13, New Delhi, over M/s. Pride Residency Private Limited. The Tribunal did not adjudicate on the issue of assessment on a non-existent entity, as it was rendered academic by the jurisdictional issue. The grounds raised by the Revenue were dismissed, and the appeal was concluded in favor of the assessee.
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