2015 (5) TMI 614 - HC - Income Tax

Proceeding against a non-existing company - Held that - The proceedings had been initiated against a non-existing company/SSS Limited even after the amalgamation of the said company with M/s Intel Technology India Pvt. Ltd.. We do not see any good ground to differ with the said judgment of the Delhi High Court in Spice Infotainment Ltd. v. CIT 2011 (8) TMI 544 - DELHI HIGH COURT wherein held that the framing of assessment against the non-existing entity/person goes to the root of the matter which is not a procedural irregularity, but, a jurisdictional defect and as there cannot be any assessment against the dead person.- Decided in favour of the assessee.

Summary

Issues:
Assessment validity post-amalgamation

Analysis:
The case involved appeals related to the assessment year 2003-04 concerning the amalgamation of a company with its successor company. The High Court noted that the assessing officer passed the assessment order after the amalgamation order was issued. The Tribunal held the assessment order as null and void due to lack of jurisdiction, quashing it. The department's appeal was rendered infructuous as a result. The department challenged the Tribunal's decision, leading to the present appeals.

The substantial questions of law framed for consideration included whether the assessment order post-amalgamation was valid, the applicability of section 292B of the Income Tax Act, and the Tribunal's duty to examine the matter on merits. The department argued that the assessment proceedings should continue against the pre-amalgamation company, given the filing of the return prior to amalgamation and the successor company's participation in the proceedings. On the other hand, the respondent contended that any proceeding against a non-existing company would be null and void, especially after providing notice of amalgamation to the department.

The respondent relied on a Delhi High Court decision to support the argument that assessment against a non-existing entity is a jurisdictional defect, not a procedural irregularity. The High Court agreed with the Delhi High Court's decision, emphasizing that proceedings initiated against a non-existing company post-amalgamation were invalid. Consequently, the appeals were dismissed, deciding in favor of the assessee and against the revenue. The High Court directed the department to proceed with making assessments in accordance with the law based on the returns filed by the pre-amalgamation company for the assessment year 2003-04.