2015 (7) TMI 1015 - AT - Income Tax

Validity of assessment order passed u/s 143(3) - in the name of M/s Karamchand Appliances Pvt.Ltd. company as no more in existence, consequent to its merger with M/s S.C.Johnson Products Ltd. - Held that - As the assessment order is made on a non existing person, we respectfully follow the decision of the Jurisdictional High Court in the case of Spice Entertainment Ltd. (2011 (8) TMI 544 - DELHI HIGH COURT ) and quash the assessment order as confirmed by the First Appellate Authority. - Decided in favour of assessee.

Summary

Issues involved:
Validity of assessment order passed in the name of a non-existing company post amalgamation.

Analysis:

Issue 1:
The appeal was filed against the order of the Ld.CIT(A)-X, New Delhi dated 13.11.2009 for the Assessment Year (AY) 2006-07.

Issue 2:
The assessee company, M/s Karamchand Appliances Pvt.Ltd. (KAPL), amalgamated with S.C.Johnson Products Private Ltd. w.e.f. 1st June, 2005, approved by the Delhi High Court under sections 391 and 394 of the Companies Act, 1956. The assessment order u/s 143(3) of the Act was passed on 31.12.2008 in the name of M/s K.C.Appliances P.Ltd., a non-existing entity post-merger.

Issue 3:
The main contention was whether the assessment order passed in the name of the amalgamated and dissolved company was valid. The assessee relied on judgments of the Jurisdictional High Court regarding similar issues.

Issue 4:
The Revenue argued that the judgments cited were not binding precedents as no substantial question of law arose, and the assessee should have objected to the jurisdiction of the AO within the specified time frame. The Revenue also referred to S.124(3) and emphasized that objections should have been raised earlier.

Issue 5:
The Tribunal analyzed the precedents cited by both parties, highlighting the decisions of the Delhi High Court and the Tribunal in similar cases. The Tribunal dismissed the Revenue's arguments and upheld the judgments of the Jurisdictional High Court, quashing the assessment order made on a non-existing entity.

Conclusion:
Considering the facts and precedents, the Tribunal allowed the assessee's appeal, following the decisions of the Jurisdictional High Court, and quashed the assessment order made on a non-existing entity post-amalgamation. The Tribunal's decision was pronounced on 17.6.2015.