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2019 (6) TMI 392 - AT - Income TaxValidity of assessment in the name of non-existent entity - Scheme of merger conceived - company ceased to exist consequent to merger scheme adopted - notice in the name of company merged - HELD THAT - We find merit in ground No.1 raised by assessee challenging validity of assessment in the name of non-existent entity. Thus, assessments order dated 27.03.2015 in the name of erstwhile Amdocs Business Services Private Limited is invalid and without jurisdiction as the said company had ceased to exist on the date of assessment order. The assessment order passed in the name of non-existent entity i.e. Amdocs Business Services Private Limited is invalid and subsequent proceedings arising there from are vitiated. Hence, ground No.1 raised in appeal by the assessee is allowed.
Issues Involved:
1. Validity of the assessment order made in the name of a non-existent entity. 2. Adjustment made under Section 10A(7) read with Section 80IA(10) of the Income Tax Act. 3. Levy of interest under Section 234B of the Income Tax Act. 4. Profit margin computation for disallowance of excess profit under Section 10A(7) read with Section 80IA(10) of the Income Tax Act. 5. Manner of computing deduction under Section 10A of the Income Tax Act. Issue-wise Detailed Analysis: 1. Validity of the Assessment Order Made in the Name of a Non-Existent Entity: The assessee challenged the validity of the assessment order on the ground that it was passed in the name of a non-existent entity. The original name of the assessee-company was "Amdocs Business Services Private Limited," which merged with "Amdocs Development Centre India Private Limited" effective from April 1, 2012, as per the order of the Hon'ble Bombay High Court dated May 10, 2013. Despite being informed about the merger, the Assessing Officer issued a notice under Section 143(2) of the Act in the name of the erstwhile company on August 8, 2013, and finalized the assessment in the name of the non-existent entity on March 27, 2015. The Tribunal held that the assessment made in the name of a non-existent company is invalid and unsustainable in the eye of law, citing decisions from the Hon'ble Jurisdictional High Court and the Hon'ble Delhi High Court, which established that an assessment order in the name of a non-existent entity is without jurisdiction. 2. Adjustment Made Under Section 10A(7) Read with Section 80IA(10) of the Income Tax Act: Since the primary issue regarding the validity of the assessment order was decided in favor of the assessee, the Tribunal did not deliberate on the adjustment made under Section 10A(7) read with Section 80IA(10) of the Act. The assessment order being invalid rendered the related grounds academic. 3. Levy of Interest Under Section 234B of the Income Tax Act: Similarly, the issue regarding the levy of interest under Section 234B of the Act was not deliberated upon, as the primary issue of the validity of the assessment order was decided in favor of the assessee, making this ground academic. 4. Profit Margin Computation for Disallowance of Excess Profit Under Section 10A(7) Read with Section 80IA(10) of the Income Tax Act: The Department challenged the findings of the Commissioner of Income Tax (Appeals) in granting part relief to the assessee by adopting a profit margin at 20% instead of 12.95% computed by the Assessing Officer for working out the disallowance of excess profit under Section 10A(7) read with Section 80IA(10) of the Act. However, since the assessment order was held invalid, the Department's appeal on this issue was dismissed. 5. Manner of Computing Deduction Under Section 10A of the Income Tax Act: The Department also assailed the manner of computing the deduction under Section 10A of the Act. As the primary issue regarding the validity of the assessment order was resolved in favor of the assessee, the related grounds in the Department's appeal were rendered moot and dismissed. Conclusion: The Tribunal allowed the appeal of the assessee, declaring the assessment order dated March 27, 2015, in the name of "Amdocs Business Services Private Limited" as invalid and without jurisdiction. Consequently, the remaining grounds raised by the assessee became academic, and the appeal of the Revenue was dismissed. The order was pronounced on June 3, 2019.
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