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2024 (3) TMI 1305 - AT - Income TaxOrder passed against a non-existent entity - amalgamation/merger of the erstwhile company with the successor company - HELD THAT - A cursory glance of the draft assessment order dated 21.12.2019 clearly reveals that against the name of the assessee, the Assessing Officer has mentioned Boeing International Corporation India Ltd. Whereas, in the column showing address of the assessee, the Assessing Officer has mentioned M/s. Boeing International Corporation India Ltd. (3rd Floor) DLF Centre, Sansad Marg, New Delhi (India) . The aforesaid facts clearly show that the assessment order has been passed in the name of Boeing International Corporation India Ltd., which as on the date of passing of the draft assessment order has become a non-existent entity. Undisputedly, against the draft assessment order, assessee raised objections before learned DRP. Interestingly, the directions of learned DRP is in the name of Boeing India Pvt. Ltd., the successor company. However, the final assessment order has again been passed by the Assessing Officer in the name of Boeing International Corporation India Ltd., the erstwhile company. More interestingly, the name of the successor company i.e. Boeing India Pvt. Ltd., nowhere appears in the body of the final assessment order. Also further relevant to observe, the PAN appearing both in the draft and final assessment orders is of the erstwhile company, Boeing International Corporation India Ltd. and not of the successor company Boeing India Pvt. Ltd. Thus, the facts on record establish beyond doubt that both the draft as well as final assessment orders have been passed in the name of a non-existent company. Applying the ratio laid down by the Hon'ble Supreme Court, in case of Maruti Suzuki 2019 (7) TMI 1449 - SUPREME COURT and Sony Mobile Communications India Pvt. Ltd 2023 (2) TMI 1074 - DELHI HIGH COURT to the factual matrix of the issue, we have no hesitation in holding that the impugned assessment order passed in the name of a non-existent entity is void ab initio. Accordingly, it is quashed.
Issues Involved:
1. Validity of the assessment order passed against a non-existent entity. 2. Procedural irregularities and their impact on the assessment order. 3. Jurisdictional issues related to the merger of entities. Summary: Issue 1: Validity of the Assessment Order Against a Non-Existent Entity In ground nos. 1 and 2, the assessee challenged the validity of the assessment order dated 30.03.2021 for the assessment year 2016-17, arguing that it was passed against a non-existent entity. The assessee, formerly known as Boeing International Corporation India Ltd., had merged with Boeing India Pvt. Ltd. as per the merger scheme dated 27.02.2018, effective from 01.04.2017. The Assessing Officer (AO) was informed of this merger via a letter dated 10.04.2018. Despite this, the AO issued both the draft and final assessment orders in the name of the erstwhile company. Citing the Tribunal's decision in ITA No.9765/Del/2019 for AY 2015-16 and the Supreme Court's ruling in PCIT vs. Maruti Suzuki India Ltd. (2019) 416 ITR 613 (SC), the assessee contended that the assessment order was void ab initio. Issue 2: Procedural Irregularities and Their Impact on the Assessment OrderThe Department argued that the name of the erstwhile company was mentioned due to procedural issues in the ITBA system, which triggers proceedings based on the name in the return of income. They contended that this was a mere procedural irregularity and could be rectified. However, the Tribunal noted that the draft assessment order dated 21.12.2019 and the final assessment order both mentioned the PAN of the erstwhile company, reinforcing that the orders were passed in the name of a non-existent entity. The Tribunal rejected the Department's argument, emphasizing that the AO was aware of the merger and still issued orders in the name of the dissolved entity. Issue 3: Jurisdictional Issues Related to the Merger of EntitiesThe Tribunal referred to the Supreme Court's decision in PCIT vs. Maruti Suzuki India Ltd., which held that orders passed in the name of a non-existent entity are void ab initio as it affects the jurisdiction of the AO. The Tribunal distinguished the present case from CIT vs. Mahagun Realtors Pvt. Ltd. (2022), where the Supreme Court upheld an assessment order mentioning both the amalgamating and amalgamated companies due to the peculiar facts of that case. The Tribunal also cited the Delhi High Court's decision in CIT vs. Sony Mobile Communications India Pvt. Ltd., which applied the Maruti Suzuki ratio to quash an assessment order passed in the name of a non-existent entity. Conclusion:Applying the ratio from Maruti Suzuki and Sony Mobile Communications, the Tribunal held that the assessment order passed in the name of a non-existent entity, Boeing International Corporation India Ltd., was void ab initio and quashed it. Consequently, other grounds raised by the assessee became purely academic and were not adjudicated, though the issues were kept open. Order pronounced in the open court on 27/03/2024.
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