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2020 (12) TMI 98 - AT - Income TaxAssessment completed in the name of an entity not in existence - scheme of merger conceived - HELD THAT - As the assessment proceedings are being carried out simultaneously for six years and where the common letter was issued for all the years, then the factum of the assessee having been merged with M/s. Akriti was in the knowledge of Assessing Officer, and same cannot be brushed aside. In any case, assessment framed in the name of the non-existing entity cannot stand in the eyes of law. Hence, we hold that the present assessment order is both invalid and bad in law. Ground of appeal No.1 raised by the assessee is thus allowed.
Issues Involved:
Jurisdictional issue regarding assessment order validity. Analysis: The appeal was filed against the order of CIT(A), Karnal for assessment years 2010-11 under section 153A r.w.s 143(3) of the Income-tax Act, 1961. The primary issue raised was the jurisdictional issue regarding the validity of the assessment order. The appellant contended that the notice issued under section 153C r.w.s 153A was in the name of a non-existing entity, questioning the jurisdiction of the Assessing Officer. The appellant argued that as the company had merged with another entity as per the High Court order, the assessment in the name of the non-existent entity was not valid. However, the CIT(A) rejected this argument, stating that the appellant did not inform the Income Tax Department about its non-existence in due time. The appellant appealed on both the preliminary jurisdictional issue and the merits of the case. The appellant's representative highlighted that the search on M/s. SRS Group was conducted on 09.05.2012, and the notice under section 153C was issued on 10.11.2014. It was pointed out that the appellant company had merged with M/s. Akriti as of 01.04.2012 according to the High Court order. The appellant emphasized that for the assessment year 2013-14, the same Assessing Officer passed the assessment order after the merger with M/s. Akriti. However, for the assessment year 2010-11, the assessment was done in the name of the merged non-existing entity. The appellant cited a Supreme Court decision in support of their argument. The Tribunal considered the contentions of both parties and examined the facts. It was observed that the Assessing Officer was aware of the merger of the appellant company with M/s. Akriti during the assessment proceedings for multiple years. The Tribunal noted that the assessment order for the year 2010-11 was passed in the name of a non-existent entity, which was a known fact to the Assessing Officer. Citing the Supreme Court decision, the Tribunal concluded that an assessment framed in the name of a non-existing entity is invalid and legally flawed. Therefore, the Tribunal allowed the appellant's appeal on the jurisdictional issue, deeming the assessment order invalid and bad in law. The remaining grounds of appeal were considered academic and not adjudicated upon. In conclusion, the Tribunal allowed the appeal of the assessee based on the invalidity of the assessment order due to being passed in the name of a non-existent entity, known to the Assessing Officer. The judgment emphasized the importance of maintaining accuracy and legality in assessment proceedings, especially concerning the entity's existence at the time of assessment.
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