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2021 (3) TMI 74 - AT - Income TaxJurisdiction of AO framing assessment on a non-existing entity - Scheme of merger conducted - HELD THAT - National Company Law Tribunal NCLT Bangalore Bench and Delhi Bench have approved the merger of the appellant company with M/s. GE India Industrial Private Ltd. and as per the order of NCLT, Bangalore Bench - We have no hesitation to hold that the assessment order has been framed in the name of nonexistent company inspite of notices. Thus we hold that the assessment order dated 31.08.2017 framed u/s. 143(3) r.ws. 144C of the Act is in the name of non-existent company and, accordingly, void ab initio, making all subsequent proceedings non-est. Challenge to the jurisdiction of the Assessing Officer is allowed.
Issues:
1. Challenge to the jurisdiction of the Assessing Officer due to assessment framed on a non-existing entity. 2. Transfer Pricing adjustments challenge. 3. Corporate Issues challenge regarding disallowance under section 14A of the Income Tax Act, 1961. Analysis: Issue 1: Challenge to the jurisdiction of the Assessing Officer The appeal challenged the assessment order framed under section 143(3) r.w.s. 144C of the Income Tax Act, 1961 for the Assessment Year 2013-14. The primary contention was that the assessment was made in the name of a non-existent company, GE India Export Pvt. Ltd. The appellant provided evidence of the merger with M/s. GE India Industrial Private Ltd., approved by the National Company Law Tribunal (NCLT) Bangalore and Delhi Bench. The NCLT orders highlighted that despite notifications to the Income Tax department, no comments or objections were received. Citing the Supreme Court's decision in Maruti Suzuki India Ltd., which emphasized that an amalgamating company ceases to exist post-merger, the Tribunal held the assessment order void ab initio due to being in the name of a non-existent entity. Issue 2: Transfer Pricing Adjustments Challenge The challenge also encompassed Transfer Pricing adjustments made in the assessment order. However, due to the finding that the assessment was void ab initio, the Tribunal did not delve into the merits of this issue. Issue 3: Corporate Issues - Disallowance under section 14A Another aspect of the challenge pertained to disallowance made under section 14A of the Income Tax Act. However, similar to the Transfer Pricing adjustments, the Tribunal did not analyze this issue in detail due to the assessment order being declared void. Additional Observations The CIT-DR requested an adjournment due to the absence of documents from the assessee. However, the Tribunal found no merit in the application, emphasizing that the revenue was aware of the jurisdictional challenge, and the appeal had been listed previously. The Tribunal highlighted that the NCLT orders were public documents and did not necessitate a report from the Assessing Officer. Ultimately, considering the evidence and circumstances, the Tribunal allowed the appeal of the assessee in ITA No. 556/DEL/2018, emphasizing the importance of timely justice delivery. In conclusion, the Tribunal allowed the appeal due to the assessment order being void ab initio, based on the non-existence of the company in whose name the assessment was framed. The decision underscored the significance of proper jurisdiction and adherence to legal procedures in assessment proceedings.
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