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2023 (9) TMI 329 - AT - Income TaxReopening of assessment - notice issued in the name of a non-existent entity - order being in the name of merged company - HELD THAT - The factum of amalgamation was intimated to the AO even before the issuance of notice u/s 148 - The assessee had intimated and requested the AO to cancel the PAN in the name of M/s Mangalam Infotech Pvt. Ltd. Therefore, of the Hon ble Supreme Court rendered in the case of Pr.CIT Vs. Maruti Suzuki 2019 (7) TMI 1449 - SUPREME COURT we do not see any infirmity into the order of learned CIT(Appeals) and the same is hereby affirmed. Grounds raised by the Revenue are rejected.
Issues Involved:
The issues involved in this case are: 1. Validity of assessment order being in the name of a merged company. 2. Justification of deleting the addition of application money. 3. Consideration of legal observations in previous cases related to companies. 4. Correctness of reassessment notice issued in the name of a company that ceased to exist post-merger. Issue 1 - Validity of Assessment Order: The appeal was filed by the Revenue against the order of the Commissioner of Income-tax (Appeals) regarding the assessment year 2009-10. The main contention was whether the assessment order was justified in being quashed on the technical ground of being in the name of a merged company. The Revenue argued that the assessment order was valid despite being issued in the name of a company that had merged with another entity. However, the assessee contended that the initiation of proceedings against a non-existent entity was illegal, as the company in question had been merged with another entity. The learned CIT(A) quashed the assessment order, citing legal precedents and the sequence of events leading to the merger. Issue 2 - Addition of Application Money: Another issue raised was the deletion of the addition of application money. The Revenue challenged the decision of the CIT(A) in not deciding the case on merits and deleting the addition of the application money. The assessee argued that the CIT(A) was correct in quashing the assessment order due to the illegal issuance of notice to a non-existent entity post-merger. The legal arguments revolved around the jurisdictional requirement for reassessment and the implications of the merger on the assessment process. Issue 3 - Legal Observations in Previous Cases: The CIT(A) was also questioned for not appreciating legal observations in the case of Marshall Sons & Co. (India) Pvt. Ltd. and other cases related to companies. The Revenue contended that the CIT(A) should have considered these observations while deciding the case. However, the assessee maintained that the judgment of the Hon'ble Supreme Court in the case of Pr.CIT Vs. Maruti Suzuki supported their position regarding the invalidity of the assessment order issued to a company that had ceased to exist post-merger. Issue 4 - Correctness of Reassessment Notice: The final issue involved the correctness of the reassessment notice issued in the name of a company that ceased to exist post-merger. The Revenue argued that the notice was valid, while the assessee highlighted the communication and requests made to the Assessing Officer regarding the merger and cancellation of PAN. The legal basis for quashing the notice was the principle that an amalgamating entity ceases to exist upon the approved scheme of amalgamation, as established in legal precedents. In conclusion, the Appellate Tribunal affirmed the decision of the CIT(A) to quash the assessment order due to the notice being issued to a non-existent entity post-merger. The legal principles and sequence of events leading to the merger played a crucial role in determining the validity of the assessment proceedings. The appeal of the Revenue was dismissed, and the order was pronounced on 5th September, 2023.
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