2015 (6) TMI 601 - AT - Income Tax

Search and Seizure - Notice u/s 153C - Statutory requirement of filing statement of facts with Form No. 35 was not complied with - whether CIT(A) has erred in law in adjudicating the appeal filed by the assessee? - Held that - arguments raised by the ld. DR are devoid on merit. Defects in the return of income filed, defects on Form No. 35 which is the form of appeal etc. are to be considered by the respective authorities before whom these are filed and the maintainability of the appeal before us cannot be challenged. The right of appeal is a substantive right. Procedural issues can not take away substantial rights of a person. This cannot be a ground for the revenue to challenge the order of the ld. CIT(A) which is in this case in favour of the Revenue. The arguments to say the least are farfetched. Hence we dismiss the same. - Decided against revenue. Validity of assessment under Section 153C - Held that - Considering the totality of the above facts and respectfully following the decision of Hon ble Jurisdictional High Court in the case of M/s Spice Entertainment Ltd. 2011 (8) TMI 544 - DELHI HIGH COURT wherein held that the framing of assessment against a non-existing entity/person goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a dead person, we hold that the issue of notice under Section 153C in the name of M/s Computer Engineering Services (P) Ltd. on 4.10.2010 when this company was not in existence is void. Accordingly the same is quashed. Once the notice issued under Section 153C has been quashed the assessment completed in pursuance to such notice also cannot survive and the same is also quashed. - Decided in favour of assessee.

Summary

Issues Involved:
1. Admission of cross-objection and limitation.
2. Compliance with statutory requirements in filing appeals.
3. Validity of notice and assessment under Section 153C for a non-existent entity due to amalgamation.

Issue-wise Detailed Analysis:

1. Admission of Cross-Objection and Limitation:
The Revenue opposed the admission of the cross-objection filed by the assessee, arguing it was barred by limitation. The Revenue's appeal was filed on 31.01.2014, and the notice of hearing was dispatched on 04.02.2014. The assessee filed the cross-objection on 19.09.2014, claiming it was within the prescribed time as they received the notice on 12.09.2014. The Tribunal verified the dispatch register and found that the notice was indeed dispatched on 11.09.2014 and received by the assessee on 12.09.2014. Therefore, the cross-objection filed on 19.09.2014 was within the time limit, and the objection raised by the Revenue was dismissed.

2. Compliance with Statutory Requirements in Filing Appeals:
The Revenue raised an additional ground, arguing that the assessee's appeal should not have been adjudicated by the CIT(A) due to non-compliance with the statutory requirement of filing a statement of facts with Form No. 35. The Tribunal referred to a Coordinate Bench decision which held that defects in the form of appeal should be considered by the respective authorities and cannot be a ground for challenging the maintainability of the appeal. The Tribunal emphasized that procedural issues cannot take away substantive rights and dismissed the additional ground raised by the Revenue.

3. Validity of Notice and Assessment under Section 153C for a Non-Existent Entity:
The primary issue was the validity of the notice issued under Section 153C and the subsequent assessment made on a non-existent entity due to amalgamation. The assessee argued that the notice was issued to M/s Computer Engineering Services (P) Ltd. on 04.10.2010, after it had ceased to exist due to amalgamation with M/s Instronics Ltd., sanctioned by the Hon'ble Jurisdictional High Court w.e.f. 01.04.2007. The Tribunal noted that the Hon'ble Delhi High Court in the case of Spice Entertainment Ltd. held that an assessment order passed in the name of a non-existent entity is void. The Tribunal also referred to several other judicial pronouncements supporting this view. Consequently, the notice under Section 153C and the assessment order were quashed as they were issued to a non-existent entity. The Tribunal also dismissed the Revenue's contention that the plea of amalgamation was barred by Section 124(3), clarifying that this section applies only to territorial jurisdiction issues and not to inherent lack of jurisdiction.

Conclusion:
The Tribunal allowed the assessee's appeals and dismissed the Revenue's appeals, quashing the assessment orders issued under Section 153C due to the invalidity of notices issued to a non-existent entity post-amalgamation. The procedural objections raised by the Revenue regarding the cross-objection and statutory compliance were also dismissed.