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2021 (2) TMI 315 - AT - Income TaxRevision u/s 263 - Proceedings initiated in the name of non-existent entity - scheme of amalagamtion initiated - HELD THAT - Order passed by the Ld. PCIT u/s 263 on the ground that the same having been passed in the name of M/s. Keshri Towers Pvt. Ltd., a non-existent entity which had already merged / amalgamated with M/s. Tanuj Properties Pvt. Ltd. is bad in law.- Decided in favour of assessee.
Issues:
Validity of order passed by Ld. PCIT u/s 263 in the name of a non-existent entity. Analysis: The appeal was filed against the order of Ld. PCIT under section 263 of the Income Tax Act, 1961 for the assessment year 2015-16. The company, M/s. Keshri Towers Pvt. Ltd., had filed its return of income declaring a total income of ?6,280, which was later determined by the AO at ?40,002 after disallowance under section 14A. The Ld. PCIT found the assessment to be erroneous and prejudicial to revenue, issuing a notice under section 263. The order passed by Ld. PCIT directed the AO to conduct a de novo assessment. The assessee challenged the validity of the order on the grounds that M/s. Keshri Towers Pvt. Ltd. had already merged with M/s. Tanuj Properties Pvt. Ltd. The counsel for the assessee referred to the merger order by the National Company Law Tribunal and argued that the proceedings initiated by Ld. PCIT were void ab initio, citing a similar case decided by the Hon'ble Calcutta High Court. The Tribunal noted a precedent where revision proceedings initiated in the name of a non-existent entity were held to be invalid. In the case of M/s. Aarcee Holdings Pvt. Ltd., the Tribunal had invalidated the revision proceedings initiated in the name of the merged entity. The Tribunal relied on decisions by the Hon'ble Delhi High Court and the Hon'ble Calcutta High Court to support its decision. Following the precedent set in the M/s. Aarcee Holdings Pvt. Ltd. case, the Tribunal canceled the order passed by Ld. PCIT in the name of M/s. Keshri Towers Pvt. Ltd., a company that no longer existed due to its merger with M/s. Tanuj Properties Pvt. Ltd. Therefore, the Tribunal allowed the appeal of the assessee, holding the order passed by Ld. PCIT under section 263 to be invalid due to its issuance in the name of a non-existent entity.
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