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TMI Blog2014 (11) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the IT Act, to make assessment on an amalgamating company (transferor/dissolved company), even though the appellant company participated in assessment proceedings – Decided against revenue. Applicability of section 292B - Whether an assessment upon an amalgamated company is a mistake within the meaning of Section 292B - Held that:- In SPICE ENTERTAINMENT LTD. Versus CIT [2011 (8) TMI 544 - DELHI HIGH COURT] it has been held that once it is found that assessment is framed in the name of nonexisting entity it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act – thus, no substantial question of law arises for consideration – Decided against Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... adras High Court ruling in Marshall Sons and Co. vs. Income Tax Officer (1992) 195 ITR 417. 5. The assessee contends that no question of law arises for consideration. It submits that the text and phraseology of Sections 170 (1) and (2) do not support the revenue's arguments. The assessee further relies on Saraswati Industrial Syndicate v. CIT, 1990 Supl. (1) SCR 332 in support of its contentions and the findings of the tax authorities below, i.e. the CIT (A) and the ITAT. Spice Entertainment Ltd. Vs. CIT - ITA No.475 of 2011, decided by a Division Bench of this Court, as well as an earlier decision in Commissioner of Income Tax v. Vived Marketing Servicing Pvt. Ltd. ITA No. 273/2009 were relied on by the assessee as well, in support of its contentions. It was also pointed out that the jurisdictional defect in this case could not be cured under Section 292-B of the Act. 6. Sections 170(1) and 170(2) of the Act do not assist the revenue in their case. The revenue does not contest that in a case of amalgamation, the predecessor (being a dissolved company) "cannot be found". Consequently, Section 170(2) applies. This provision clarifies that where the predecessor cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arried on its business for and on behalf of the transferee-company and, accordingly, the profits and losses of the transferor- company for the period commencing from the transfer date, shall be deemed to be the profits or losses of the transferee-company and shall be available to the transferee-company for disposal in any manner." 12. That case, however, involved a controversy about the effective date of amalgamation, and not about whether an assessment of income can be made on an amalgamated company. In fact, the logic of the Madras High Court's decision undermines the Appellants' case. The Madras High Court found for the Revenue, because, in its opinion, the effective date of amalgamation came after the date of the assessment. The assessee argued that the date of amalgamation was January 1, 1982, whereas the assessment order was dated November 25, 1984. 13. The Madras High Court held that "according to the records maintained pursuant to the provisions of the Companies Act, the subsidiary company had continued to remain in existence up to January 21, 1986, even long after January 1, 1982." 14. On this basis, it held the Assessee liable. This obviously implies th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, which reads as follows: "292B. No return of income assessment, notice, summons or other proceedings furnished or made or issue or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reasons of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceedings is in substance and effect in conformity with or according to the intent and purpose of this Act." 18. The Revenue argues that the assessment was in substance and effect in conformity with the Act, because the Assessing Officer had used correct nomenclature in writing the name of the Assessee, along with the fact that the company had amalgamated, as well as the correct address of the amalgamated company. Consequently, they contend that "the mere omission, if any on the part of the AO to mention the name of the appellant/amalgamated company in place of M/s Dimension Apparel… [is]… therefore a procedural defect." 19. The question of whether an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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