2023 (4) TMI 690 - AT - Income Tax

Draft assessment passed in the name of non-existent entity - approval of scheme of amalgamation - Notice in the name of amalgamating company - HELD THAT - We are guided by decision of Maruti Suzuki India Ltd. 2019 (7) TMI 1449 - SUPREME COURT where it has been held that the assessment order passed in the name of non-existing company i.e. amalgamating company, which ceased to exist, is a substantive illegality and invalid. Reverting to the facts of the present case, after approval of scheme of amalgamation by NCLT Mumbai dated 25-10-2018 the entity M/s. Berco Undercarriage India Pvt. Ltd. being the amalgamating company had ceased to exist and as we have examined all the respective orders passed by the revenue authorities post such amalgamation are in the name of the said M//s. Berco Undercarriage India Pvt. Ltd. the amalgamating company which wasn't existing anywhere after amalgamation - All orders issued post this amalgamation in the name of M/s. Berco Undercarriage India Pvt. Ltd. becomes substantially illegal, invalid and void ab-initio. Decided in favour of assessee.

Summary

Issues involved:
The legal ground raised by the assessee regarding the transfer pricing order, draft assessment order, DRP directions, and final assessment order being issued in the name of a non-existent entity post-amalgamation.

Legal Grounds:
The assessee challenged the legality of the transfer pricing order, draft assessment order, DRP directions, and final assessment order issued in the name of a non-existent entity, 'Berco Undercarriages India Private Limited,' after the amalgamation with M/s. Rothe Erde (I) Pvt. Ltd.

Facts and Analysis:
The amalgamation of M/s. Berco Undercarriage India Pvt. Ltd. with M/s. Rothe Erde (I) Pvt. Ltd. was approved by the NCLT, Mumbai. Despite the communication of this amalgamation to the authorities, orders were passed in the name of the erstwhile company, which was no longer in existence. The Tribunal observed that all orders issued post-amalgamation in the name of the non-existent entity were substantially illegal, invalid, and void ab initio, following the precedent set by the Hon'ble Apex Court in a similar case.

Decision:
The Tribunal allowed the appeal of the assessee on the legal ground, rendering all other grounds raised on merits as academic. The orders issued in the name of the non-existent entity were deemed illegal and void ab initio, leading to the allowance of the appeal.

Final Outcome:
The appeal of the assessee was allowed by the Tribunal due to the substantial illegality in the issuance of orders post-amalgamation in the name of the non-existent entity, 'Berco Undercarriages India Private Limited.'