9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 531 - AT - Income TaxAssessment on a non-existent company - scheme of amalgamation conceived - HELD THAT - When both the amalgamating company, assessee in this case, have ceased to exist by virtue of the approved scheme of amalgamation w.e.f. 01.04.2013 by the order passed by Hon ble Delhi High Court, AO was not within his jurisdiction to frame the assessment in the name of non-existent entity and such assessment orders dated 28.12.2016 29.12.2016 are nullity and not sustainable in the eyes of law. Consequently, assessment framed in the name of M/s. Artsy Infrastructure and Projects Private Limited and M/s. ATJ Impex Pvt. Ltd. vide orders dated 28.12.2016 29.12.2016 respectively passed by the AO and confirmed by the ld. CIT (A) are ordered to be quashed.
Issues Involved:
1. Validity of assessment orders passed in the name of non-existent entities. 2. Reopening of assessment proceedings under Section 147 read with Section 148. 3. Addition of share capital under Section 68 of the Income-tax Act. 4. Compliance with procedures prescribed under the statute for reopening assessments. 5. Application of Finance Act, 2012 to the year under consideration. 6. Opportunity for rebuttal and cross-examination in assessment proceedings. Validity of Assessment Orders: The appeals sought to set aside orders passed by the Commissioner of Income-tax (Appeals) for the assessment year 2009-10. The issue raised was the validity of the assessment orders passed in the name of non-existent entities, M/s. Artsy Infrastructure and Projects Private Limited and M/s. ATJ Impex Pvt. Ltd., which had merged with other companies. The contention was that the assessment orders were unsustainable in the eyes of the law due to the non-existence of the entities at the time of assessment. The Tribunal held that assessments against non-existing entities are jurisdictional defects and not procedural irregularities, citing relevant case laws and quashed the assessment orders. Reopening of Assessment Proceedings: The proceedings were initiated under Section 147 read with Section 148, raising questions about the compliance with statutory conditions and procedures. The appellant argued that the reopening of the assessments was not valid as the prescribed conditions were not satisfied. The Tribunal considered the legality of the reasons recorded for reopening and concluded that they lacked independent application of mind by the Assessing Officer, rendering them bad in law. Addition of Share Capital: The additions made on account of share capital under Section 68 of the Act were contested by the appellant. The Tribunal noted that despite the detailed explanations and evidence provided by the assessee to establish the legitimacy of the transactions, the additions were confirmed. The Tribunal found that the additions were made without giving the assessee an opportunity to rebut the material collected, violating the principles of natural justice. Compliance with Procedures: The Tribunal emphasized the importance of compliance with the procedures prescribed under the Finance Act, 2012. The appellant argued that the provisions of the Act as amended by the Finance Act, 2012 were not applicable for the year under consideration. The Tribunal considered this argument in the context of the case. Opportunity for Rebuttal and Cross-Examination: The appellant raised concerns regarding the lack of opportunity for rebuttal and cross-examination during the assessment proceedings. The Tribunal noted that the additions were confirmed without providing the assessee with a chance to challenge the material relied upon, thus violating the principles of natural justice. In conclusion, the Tribunal quashed the assessment orders passed in the name of non-existent entities, citing jurisdictional defects. The Tribunal also highlighted the importance of adherence to statutory procedures and principles of natural justice in assessment proceedings.
|
