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2021 (2) TMI 760 - HC - Income TaxDraft assessment order passed in the name of company as merged/amalgamated with the petitioner company - succession to business otherwise than on death - HELD THAT - Since, the transferor company Mando India Ltd. had merged with the petitioner Mando Automotive Private Limited (formally Mando India Steering Systems Private Limited) with effect from 01.04.2013 in terms of the order of amalgamation dated 25.06.2013 and since the returns under Section 139 of the Income Tax Act, 1961 for the Assessment Year 2013-14 was filed in the name of defunct transferor Mando India Ltd, it is clear that the petitioner is bound by return filed by its director. Further, from a reading of Section 170 of the Income Tax Act, 1961, it is clear that the successor shall be assessed in respect of the income of the previous year after the date of succession. It was incumbent on the part of the petitioner to have either got the PAN Number altered or surrendered, it should have filed a composite return in its name in terms of the Sanction Scheme of Amalgamation. Under Section 2(1B) of the Income Tax Act, 1961, all the properties and liabilities of the amalgamating companies immediately before the amalgamation become the liabilities of the amalgamated company by virtue of the amalgamation. Therefore, the petitioner cannot disown its liability as a successor. Further, it is a paradox for the petitioner to expose the course of dead and defunct company in this Writ Petition if according to it the said company does not exist. As per the Sanctioned Scheme of amalgamation, all tax and liability of the transferor company (Mando India Limited), from the appointed dates, shall, for all purposes, be treated as the tax, cess, duty, liabilities or refunds, claims and etc. Further, the Sanction Scheme of amalgamation mandates the petitioner to file necessary revision in the income tax returns also pursuant to provisions of the Scheme. Petitioner had taken over all the assets and liabilities of the said Mando India Limited. The petitioner should have filed in its tax return a composite tax return including the return for the Assessment Year 2013-2014 of the said Mando India Limited. Instead, the petitioner deliberately filed return in the name of the transferor company (Mando India Company) on 29.11.2013 which had already ceased to exist with effect from 01.03.2013. Petitioner deliberately mislead the Income Tax Department by assuming that it can file returns with the Permanent Account Number (PAN) of a defunct transferor company with the view to take undue advantage of certain lines of decision to force the Income Tax Department to commit such mistake. Permanent Account Number (PAN) signifies the identity of an assessee under the Income Tax Act, 1961 for assessment. Therefore, no merits in the submission of the learned counsel for the petitioner. Petitioner played a trick on the Income Tax Department to hoodwink its liability. Since the return was filed by the petitioner in the name of a non-existing company namely Mando India Ltd, the petitioner cannot take advantage of its own mistake and turnaround and state that the respondent has passed the wrong order in the name of non-existing company. WP dismissed.
Issues Involved:
1. Validity of the impugned order passed in the name of a non-existent company. 2. The petitioner's responsibility to file appropriate tax returns post-amalgamation. 3. The applicability of legal precedents regarding assessment orders issued to non-existent entities. Issue-wise Detailed Analysis: 1. Validity of the impugned order passed in the name of a non-existent company: The petitioner challenged the impugned order dated 31.12.2016 under Section 143(3) read with Section 92CA(3) of the Income Tax Act, 1961, arguing it was issued in the name of Mando India Limited, a company that had ceased to exist post-amalgamation with the petitioner company effective from 01.03.2013. The petitioner relied on the Supreme Court's decision in Principal Commissioner of Income Tax Vs. Maruti Suzuki India Ltd, 2019 SCC Online SC 928, which held that an assessment order issued in the name of a non-existent entity is fundamentally flawed. 2. The petitioner's responsibility to file appropriate tax returns post-amalgamation: Despite the amalgamation, the petitioner filed tax returns for the Assessment Year 2013-14 in the name of the defunct Mando India Ltd on 29.11.2013. The court noted that the petitioner should have filed a composite return in its name. Section 170 of the Income Tax Act, 1961, mandates that the successor (petitioner) be assessed for the income of the previous year after the date of succession. The court emphasized that the petitioner was bound by the return filed by its director and should have either altered or surrendered the PAN of the defunct company. 3. The applicability of legal precedents regarding assessment orders issued to non-existent entities: The petitioner cited multiple precedents, including Principal Commissioner of Income Tax Vs. Maruti Suzuki India Ltd, and Spice Entertainment Ltd Vs. Commissioner of Service Tax, arguing that the assessment order in the name of a non-existent entity is invalid. However, the court distinguished the present case from these precedents, noting that the petitioner had filed returns in the name of the defunct company post-amalgamation, misleading the Income Tax Department. The court held that the petitioner cannot take advantage of its own mistake and blame the respondent for issuing the order in the name of the non-existent company. Conclusion: The court dismissed the writ petition, stating that the petitioner deliberately misled the Income Tax Department by filing returns in the name of a non-existent company. The court found no merit in the petitioner's arguments and upheld the impugned order, emphasizing the petitioner's responsibility to file appropriate returns post-amalgamation and the applicability of Section 170 of the Income Tax Act, 1961. The court also noted that the petitioner did not object to the jurisdiction when notices were issued in the name of the defunct company during the assessment proceedings.
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