2019 (3) TMI 83 - AT - Income Tax

Assessment u/s 153A passed against company ceased to exist - scheme of amalgamation conceived - HELD THAT - We decide the issue in assessee s favour and hold that the Assessment Order passed on the amalgamated company is not amenable to the assessment proceedings. Accordingly the Assessment Order framed by the AO is hereby annulled. - Decided in favour of assessee.

Summary

Issues:
Validity of Assessment Order passed by the Assessing Officer in the case of an amalgamated company.

Analysis:
The core issue in this appeal is the validity of the Assessment Order passed by the Assessing Officer (AO) in the case of an amalgamated company. The Assessee Company was merged with 'Optus Promoters Private Limited' as per the order of the Hon'ble High Court of Delhi under Sections 391 and 394 of the Companies Act, 1956. Despite informing the AO about the amalgamation, the AO issued the Assessment Order in the name of the company that had ceased to exist post-amalgamation. The Assessee challenged the validity of this Assessment Order, arguing that it should have been issued in the name of the transferee company. The Assessee's submissions highlighted the communication with the AO regarding the amalgamation and the request to initiate proceedings in the name of the transferee company.

During the appellate proceedings, the Assessee provided written submissions and a Paper Book containing relevant documents supporting the amalgamation. The Assessee cited previous decisions by the ITAT and the High Court of Delhi in similar cases where it was held that assessment proceedings cannot be initiated against an entity that has ceased to exist post-amalgamation. The Assessee's arguments were further supported by judgments in various cases such as 'Images Credit and Portfolio Pvt. Ltd. vs. ACIT' and 'Spice Entertainment Ltd. vs. CIT'. The Assessee's contentions were based on legal precedents and the communication with the AO regarding the amalgamation.

The ITAT, Delhi, after considering the Assessee's submissions and the legal precedents cited, upheld the Assessee's position. The Tribunal found that the Assessment Order passed on the amalgamated company was not valid and annulled the Assessment Order framed by the AO. The decision was based on the principle that assessment proceedings cannot be conducted against a company that has ceased to exist due to amalgamation. The Tribunal dismissed the Revenue's appeal, stating that the issue was decided in favor of the Assessee based on previous orders of the ITAT and the High Court of Delhi. The Tribunal's decision was in line with established legal principles and precedents, leading to the dismissal of the Revenue's appeal.

In conclusion, the ITAT's judgment focused on the validity of the Assessment Order in the context of the amalgamation of the Assessee Company. The decision highlighted the importance of following legal procedures and ensuring that assessment proceedings are conducted in accordance with the law, especially when dealing with entities that have undergone significant changes such as amalgamation. The judgment served to uphold the legal rights of the Assessee in challenging the Assessment Order issued in the name of a company that no longer existed post-amalgamation.