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2023 (5) TMI 824 - AT - Income TaxAssessment order passed in the name of amalgamating/non-existing company - HELD THAT - The decision of the Hon ble Supreme Court in the case of Mahagun Realtors (P.) Ltd. 2022 (4) TMI 347 - SUPREME COURT cannot be interpreted to mean that even in the case where the factum of amalgamation was put to the notice of AO, still the assessment made in the name of amalgamating company i.e. non-existing company is valid in law. The fact situation of the present case squarely falls within fact situation of the cases of Maruti Suzuki India Ltd. 2019 (7) TMI 1449 - SUPREME COURT , Spice Enfotainment Ltd. 2011 (8) TMI 544 - DELHI HIGH COURT and the decision of Alok Knit Exports Ltd. 2021 (8) TMI 777 - BOMBAY HIGH COURT and Teleperformance Global Services Pvt. Ltd. 2021 (4) TMI 550 - BOMBAY HIGH COURT Therefore, we have no hesitation to hold that the assessment order passed by the Assessing Officer in the name of non-existing entity is null and void ab initio. Accordingly, we hereby quash the assessment order.
Issues Involved:
1. Validity of the assessment order passed in the name of a non-existing entity. 2. Applicability of judicial precedents regarding assessments made in the name of amalgamating companies. 3. Impact of the assessee's participation in the assessment proceedings on the validity of the assessment order. 4. Relevance of the PAN of the amalgamating company being active in the assessment records. Issue-wise Detailed Analysis: 1. Validity of the assessment order passed in the name of a non-existing entity: The primary issue was whether the assessment order passed by the Assessing Officer (AO) in the name of a non-existing entity, i.e., the amalgamating company, was valid. The Tribunal noted that the assessee company, M/s. Barclays Shared Services Pvt. Ltd., had amalgamated with Barclays Technology Centre India Pvt. Ltd. The factum of amalgamation was brought to the notice of the AO during the assessment proceedings. Despite this, the AO passed the assessment order in the name of the amalgamating company, which the Tribunal held to be null and void ab initio, citing the Supreme Court's decision in PCIT vs. Maruti Suzuki India Ltd. (416 ITR 613) and other judicial precedents. 2. Applicability of judicial precedents regarding assessments made in the name of amalgamating companies: The Tribunal referred to several judicial precedents, including CIT vs. Spice Entertainment Ltd. (12 ITR 134), CIT vs. Micron Steels (P.) Ltd. (372 ITR 386), and PCIT vs. Maruti Suzuki India Ltd. (416 ITR 613). These cases established that an assessment order passed in the name of a non-existing entity due to amalgamation is void. The Tribunal emphasized that the jurisdictional notice must be issued in the name of the existing entity, and any assessment against a non-existing entity is fundamentally flawed. 3. Impact of the assessee's participation in the assessment proceedings on the validity of the assessment order: The Tribunal reiterated that participation in the assessment proceedings by the amalgamated entity does not validate an assessment order passed in the name of a non-existing entity. This principle was upheld by the Supreme Court in the Maruti Suzuki India Ltd. case, where it was held that participation cannot operate as an estoppel against law. 4. Relevance of the PAN of the amalgamating company being active in the assessment records: The Tribunal dismissed the argument that the PAN of the amalgamating company being active in the assessment records could validate the assessment order. The Bombay High Court in Alok Knit Exports Ltd. vs. DCIT (446 ITR 748) held that even if the PAN is active, it does not legitimize an assessment order passed in the name of a non-existing entity. Conclusion: The Tribunal quashed the assessment order passed by the AO in the name of the non-existing entity, declaring it null and void ab initio. Consequently, the appeal filed by the Revenue was dismissed as infructuous. The Cross Objection filed by the assessee was allowed, reinforcing the principle that an assessment order must be issued in the name of an existing entity, and any deviation renders the order invalid. The Tribunal's decision aligns with established judicial precedents, emphasizing the importance of adhering to legal principles in the issuance of assessment orders.
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