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2023 (6) TMI 968 - AT - Income TaxDraft assessment order in the name of a non existing/Amalgamated company - defective ROI filled - PAN of a non existing entity used for filing ROI - assessee Star Sports India Pvt. Ltd. got amalgamated with Star India Pvt. Ltd. - Whether draft Assessment order passed as void ab initio? - HELD THAT - We hold that the ld DRP has correctly held the ROIs filed by assessee as non est and has also correctly quashed the draft assessment order. Thus we confirm the direction of the ld DRP to that extent. Refund due to the assessee denied, we hold that when ld AO has assessed income of the assessee independently i.e. Without considering the ROIs filed, he is duty bound to give credit of taxes u/s 199 of the Act. Accordingly due refund of taxes should be allowed to the assessee. Ld AO is directed to verify the claim of refund and allow the same in accordance with the law. Thus all the grounds of Memorandum of appeal of the ld AO are dismissed.
Issues Involved:
1. Validity of Return of Income (ROI) filed by a non-existent entity. 2. Entitlement to refund claimed in the ROI. 3. Validity of the draft assessment order and Transfer Pricing (TP) order passed on a non-existent entity. Summary: 1. Validity of ROI Filed by a Non-Existent Entity: The assessee, Star Sports India Pvt Ltd, filed its ROI on 30.11.2014 after it had amalgamated with Star India Pvt Ltd on 21.11.2014. The original and revised ROIs were filed in the name of the non-existent Star Sports India Pvt Ltd, using its PAN, and signed by directors of both the non-existent and amalgamated companies. The Dispute Resolution Panel (DRP) held that both the original and revised ROIs were non est, as they were filed in the name of a non-existent entity. The DRP emphasized that the issue must be decided within the four corners of the law, and practical difficulties in filing the return do not validate the ROI. The Tribunal upheld this view, stating that ROIs filed in the name of a non-existent entity are invalid and cannot be cured under section 139(9) of the Act. 2. Entitlement to Refund Claimed in the ROI: The assessee claimed a refund of Rs. 43,90,32,670 in its ROI. The DRP and the Assessing Officer (AO) denied the refund, stating that the returns were non est and no action could be taken on them. The Tribunal, however, held that even if the ROI is non est, the AO is duty-bound to assess the income independently and compute the tax liability. If a refund is due, it should be granted as per section 199 of the Act. The Tribunal directed the AO to verify the refund claim and allow it in accordance with the law. 3. Validity of the Draft Assessment Order and TP Order: The draft assessment order and TP order were passed in the name of the non-existent Star Sports India Pvt Ltd. The DRP quashed the draft assessment order, declaring it void ab initio. The Tribunal upheld this decision, stating that an assessment order passed on a non-existent entity is invalid. The Tribunal noted that the rules of assessment cannot be different for the assessee and the AO; thus, both the ROI and the assessment order in the name of a non-existent entity were correctly treated as invalid. Conclusion: The Tribunal confirmed the DRP's decision to treat the ROIs as non est and quash the draft assessment order. However, it directed the AO to verify and allow the refund due to the assessee as per the law. The assessee's appeal was partly allowed, and the AO's cross-objection was dismissed.
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