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TMI Blog2007 (2) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... k a decision contrary to the decision of ITAT Delhi Bench. Thus, we respectfully following the decision of ITAT Delhi Bench in the case of Impsat (P.) Ltd. and Hewlett Packard India (P.) Ltd. and the decision of the Madras High Court in the case of Express Newspapers Ltd. [ 1960 (3) TMI 48 - MADRAS HIGH COURT] hold that the assessment made in the hands of non-existent company is nullity. Accordingly we quash the assessment made in the hands of Pampasar Distillery Ltd. for the assessment year under consideration, i.e., 1999-2000, 2000-01 and 2001-02, because assessment for these years were made on the date when it was not in existence. Hence, we may mention that the Assessing Officer can make the assessment of the income prior to the period of amalgamation of Pampasar Distillery Ltd. in the hands of Successor Company that is amalgamated company which is Shaw Wallace Distilleries Ltd. as per provision of sub-section (2) of section 170 of the Income-tax Act. Now it is for the revenue to initiate appropriate proceedings against the right person i.e. Shaw Wallace Distilleries Ltd. in accordance with law. At present the assessment framed against Pampasar Distillery Ltd. is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. 6. The ratio of the above decision would squarely supports the case of the assessee because the additional ground being raised by the assessee is purely a legal issue which goes to the root of the matter. Moreover, no new fact is required to be investigated for adjudicating the above additional ground. 7. In view of above we respectfully following the above decision of the Hon ble Apex Court admit the additional ground of the assessee. 8. Coming to the merit of the above additional ground, it is submitted by the ld. counsel that the assessee, viz., Pampasar Distillery Ltd. has merged with Maharashtra Distilleries Ltd. with effect from 1-7-2000. The petition for merger has been accepted by the Hon ble High Court of Bangalore and Mumbai vide Order dated 25-6-2002 and 12-12-2001 respectively. Thereafter, name of Maharashtra Distilleries Ltd. was changed to M/s. Shaw Wallace Distilleries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company does not remain in existence and, therefore, cannot be found by the Assessing Officer. In such circumstances as per section 170(2) the Assessing Officer can make the assessment in the hands of the successor company. He also stated that even as per the scheme of amalgamation any proceedings pending against the amalgamating company shall continue with the amalgamated company. Similarly any proceeding which is required to be initiated against the amalgamating company can be initiated against the amalgamated company. 10. In the rejoinder it is submitted by the ld. counsel that the scheme of the amalgamation is only an agreement between the parties and, therefore, it will not give any jurisdiction to the Assessing Officer to make the assessment prior to the period of amalgamation in the hands of amalgamated company. He further stated that there is no provision in the Act which will permit the Assessing Officer to make the assessment of the dissolved company in the hands of amalgamated company. He further submitted that the decision of the ITAT Delhi Bench in the case of Impsat (P.) Ltd. (supra) was dated 28th July, 2004. However, unfortunately the same was not brought to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the ld. counsel that the Assessing Officer has made the assessment on the date on which the amalgamating company, viz., Pampasar Distillery Ltd. was not in existence and the assessment cannot be made in the hands of a non-existing person. We find this issue is considered by the ITAT Delhi Bench in the case of Impsat (P.) Ltd. (supra) wherein it is held as under : Thus, it is absolutely essential that the person, sought to be assessed, should be in existence at the time of making the assessment and that elaborate provisions were made in the Act to ensure that if the person, sought to be assessed, is not in existence, at the time of making the assessment, some other person or body or entity is expressly fastened with the liability to be assessee. Once it ceased to exist, there was no question of assessing it for income-tax, as there is no provision in the Act to assess a company which is dissolved. Section 159 does not cure the lacuna. This section, in the very nature of things and considering the language employed in sub-section (1), can apply only to individual s or natural persons. It cannot cover a case of a dissolution of a company and there is no statutory fiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... took place up to the date of succession and of the previous year preceding that year shall be made on the successor in like manner and to the same extent as it would have been made on the predecessor, and all the provisions of this Act shall, so far as may be, apply accordingly. (3) When any sum payable under this section in respect of the income of such business or profession for the previous year in which the succession took place up to the date of succession or for the previous year preceding that year, assessed on the predecessor, cannot be recovered from him, the Assessing Officer shall record a finding to that effect and the sum payable by the predecessor shall thereafter be payable by and recoverable from the successor, and the successor shall be entitled to recover from the predecessor any sum so paid. (4) Where any business or profession carried on by a Hindu undivided family is succeeded to, and simultaneously with the succession or after the succession there has been a partition of the joint family property between the members or groups of members, the tax due in respect of the income of the business or profession succeeded to, up to the date of succession, shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be nullity and invalid. Similarly ITAT Delhi Bench in the case of Hewlett Packard India (P.) Ltd. (supra) held such assessment to be invalid. However, the ITAT Mumbai Bench in the case of Century Lnka Ltd. ( supra) has held such assessment to be only irregularity. ITAT Delhi Bench in the case of Hewlett Packard India (P.) Ltd. (supra) has considered and relied upon the decision of Hon ble Madras High Court in the case of CIT v. Express Newspapers Ltd. [1960] 40 ITR 38 their Lordships held as under : There cannot be an assessment of a non-existent person. The definition of the word assessee in section 2(2) would obviously apply only to a living person. The rule contained in Order 22, rule 6, cannot, therefore, apply to the assessment proceedings. The assessment in the instant case was made long after the Free Press Company was struck off from the register of the companies, and it could not be valid. (p. 57) 18. We have also noticed that the decision of ITAT Delhi Bench in the case of Impsat (P.) Ltd. ( supra) was available at the time when ITAT Mumbai Bench heard the appeal of Century Enka Ltd. (supra) but, the same was not brought to the knowledge of ITAT Mumbai Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and the deductee company had their independent existence. Hence, the deductor company had legal liability to deduct tax at source and deposit the same into the Exchequer. 22. We have heard both the parties and perused the material placed before us. It has been submitted by the ld. counsel that the company, viz., Parashakti Finance Investment Ltd. has merged with Shaw Wallace Distilleries Ltd. with effect from 1-7-1988 while the orders under section 201(1)/201(1A) was passed against Parashakti Finance Investment Ltd. on 4-1-1999 when Parashakti Finance Investment Ltd. was not in existence. That the scheme of amalgamation was approved by the Hon ble Madras High Court vide order dated 9-12-1997 and by Hon ble Calcutta High Court vide order dated 10-2-1995. Therefore, he stated that any order passed by the revenue authorities on the date when Parashakti Finance Investment Ltd. is not in existence is nullity. He also stated that the detailed argument made in the case of Pampasar Distillery Ltd. would be equally applicable in the case of Parashakti Finance Investment Ltd. also. Ld. D.R. has also relied upon his argument advanced in the case of Pampasar Distillery Ltd. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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