2022 (3) TMI 563 - AT - Income Tax

Validity of assessment u/s. 143(3) - notice only in the name of the non-existing company - whether assessment proceedings on erstwhile company was a curable error u/s. 292B and 292BB - HELD THAT - The facts of amalgamation was well within the knowledge of the AO. Despite this, the AO issued jurisdictional notice only in the name of the non-existing company. We are of the considered view that the decision in assessee's own case for AY 2010-11 placing reliance on the decision of the Hon'ble Supreme Court in PCIT vs. Maruti Suzuki India Ltd. 2019 (7) TMI 1449 - SUPREME COURT will hold good for the present appeal also. - Decided in favour of assessee.

Summary

Issues:
1. Disallowance of interest under section 36(1)(iii) of the Income Tax Act.
2. Jurisdictional notice issued in the name of a non-existing company.

Issue 1: Disallowance of interest under section 36(1)(iii) of the Income Tax Act:
The appeal was filed by the revenue challenging the order passed by the Ld. Commissioner of Income Tax (Appeals) regarding the disallowance of interest under section 36(1)(iii) of the Income Tax Act for the Assessment Year 2010-11. The Ld. CIT(A) deleted the disallowance of interest amounting to ?4,11,11,828 based on previous decisions by the ITAT in the assessee's case for AY 2008-09 to 2010-11. The Ld. DR relied on the AO's observations, while the Ld. AR argued for upholding the Ld. CIT(A)'s order. The Tribunal noted that the revenue did not expressly raise the issue of assessment proceedings on the erstwhile company being a curable error under sections 292B and 292BB of the IT Act. Despite the amalgamation of the assessee company with another entity, the AO issued jurisdictional notices in the name of the non-existing company, leading to a lack of jurisdiction. The Tribunal referred to a previous decision in the assessee's case for AY 2010-11 and held that the grounds of appeal regarding additions made in the assessment order were academic, leading to the dismissal of the revenue's appeal.

Issue 2: Jurisdictional notice issued in the name of a non-existing company:
The Tribunal highlighted the amalgamation of the assessee company with another entity, which was approved by the Hon'ble Bombay High Court. Despite this, the AO issued notices in the name of the non-existing company, indicating a lack of jurisdiction. The Tribunal held that the decision in a previous case of the assessee for AY 2010-11, along with the Supreme Court's decision in PCIT vs. Maruti Suzuki India Ltd., supported the view that the jurisdictional issue was significant. The Tribunal concluded that the grounds of appeal related to additions in the assessment order were academic, leading to the dismissal of the revenue's appeal.

In conclusion, the Tribunal dismissed the revenue's appeal concerning the disallowance of interest under section 36(1)(iii) of the Income Tax Act and the jurisdictional issue arising from notices issued in the name of a non-existing company. The decision was based on the lack of jurisdiction due to the incorrect issuance of notices and the academic nature of the grounds related to additions in the assessment order.