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TMI Blog2015 (6) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... following the decision of Hon'ble Jurisdictional High Court in the case of M/s Spice Entertainment Ltd. [2011 (8) TMI 544 - DELHI HIGH COURT ] wherein held that the framing of assessment against a non-existing entity/person goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a dead person, we hold that the issue of notice under Section 153C in the name of M/s Computer Engineering Services (P) Ltd. on 4.10.2010 when this company was not in existence is void. Accordingly the same is quashed. Once the notice issued under Section 153C has been quashed the assessment completed in pursuance to such notice also cannot survive and the same is also quashed. - Decided in favour of assessee. - ITA Nos. 5874, 5875, 5876, 5877 & 5878/Del/2013, ITA Nos.5975, 5976, 5977, 5978 & 5979/Del/2013, ITA Nos.559, 560, 561, 562, 563 & 564/Del/2014, Cross Objection Nos.247, 248, 249, 250, 251 & 252/Del/2014 - - - Dated:- 29-5-2015 - S. V. Mehrotra, AM And A. T. Varkey, JM,JJ. For the Appellant : Shri Kapil Goel, Adv. For the Respondent : Shri Ramesh Chander, CIT (DR) ORDER Per Bench: 1. These a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being barred by limitation, inter-alia, on the ground that Acknowledgement-Cum-Notice of appeal being generated on 31/Jan/2014 and signed on 04/Feb/2014 must have been dispatched earlier to 11/Sept/2014, the date as reported by registry vide its report dated: 17/12/2014 on record. This aspect needs to be verified with respect to dispatch register from 31/Jan/2014. The Registry is directed to give its report before 23/Jan/2015 on this written synopsis and also to explain the delay in dispatching the notice/memorandum of appeal (Form 36) to the respondent-assesses. This matter will be heard on 30/Jan/2015. 5. On 21.01.2015, the report of the registry was placed on record as under: The appeal of the revenue was received in this office on 31/01/2014 and acknowledgement was generated by the computer section 04.02.2014. No notice was issued from 31.01.2014 to 11.09.2014. The grounds of appeal was signed on 01.09.2014 in the appeal section and sent to the dispatch section on 11.09.2014. The grounds of appeal were issued by post on 11.09.2014 and as directed, it has been verified in the dispatch register 31.01.2014 to 11.09.2014, the acknowledgement/Form 36 along with grounds of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner or disabled the CIT(A) while deciding the issue before him. The ld. AR of the assessee pointed that the ld. CIT(A) has called for the remand report and non filing of the statement of facts in no way will affect the lis at hand before the ld. CIT(A). At best it can be called an irregularity which cannot be fatal and he referred to the leading Commentary on Income Tax Law Chaturvedi and Pithisaria Page 12734 Sixth Edition 2014. Thereafter, the ld. AR quoted the Hon'ble Supreme Court observations in Jai Jai Ram Manohar Lal vs. Natiional Building Material Supply AIR 1969 SC 1267 and ITAT Coordinate G' Bench decision in the case of Shri Ram Hari Ram ITA 3531/D/2012 wherein similar objection was rejected by Speaking order para 8 and 9. 10. We have carefully considered the arguments of both sides, perused the material placed before us. We are not reproducing the lengthy argument note of the ldDR, because we take note that a Coordinate Bench of this Tribunal in the case of SVP Builders (India) Ltd. vs. DCIT ITA No. 4674/D/2014 dated 19.2.2015 has adjudicated this issue and held as under: 15 Rival contention heard. On a careful consideration of the facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not the before the AO. Adjudication on this issue by the ld. CIT(A) is beyond the jurisdiction conferred upon CIT(A). 14. The facts of the case are that there was a search and seizure action under Section 132 of the Income Tax Act (the Act) in the cases of Shri BK Dhingra, Smt.Poonam Dhingra and M/s Madhusudan Buildcon Pvt.Ltd., New Delhi on 20th October,2008. On the basis of documents found from the residential premises of Shri BK Dhingra, which were belonging to the assessee company, proceedings under Section 153C read with S.153A were initiated in the case of the assessee vide notice dated 6th October, 2010. The Assessing Officer completed the assessment vide order dated 31st December,2010 at the total income of ₹ 31,75,433/- in which the following additions were made: Unexplained purchases u/s 69C ₹ 29,03,880/- Expenses disallowed ₹ 2,80,208/- Both the above additions were deleted by the ld. CIT(A). Therefore, the revenue is in appeal against the deletion of the additions by the Ld.CIT(A). The assessee is in appeal wherein the validity of the initiation of procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing judgments of the various Hon'ble High Courts/Hon'ble Supreme Courts: a) Spice Entertainment Ltd. Vs CIT, ITA No. 475 of 2011 judgment dated 08.08.2011 of Hon'ble Delhi High Court b) CIT Vs Express Newspapers Ltd. (1960) 40 ITR 38 (MAD) c) I. K. Agencies Pvt. Ltd. Vs CWT, Kol-II, of Hon'ble Calcutta High Court (2012) 20 Taxman.com 731 (Cal.) d) CIT Vs Amarchand N. Shroff (1963) 48 ITR 59 (SC) e) CIT Vs Kurban Hussain Ibrahimji Mithiborwala, 1973 CTR (SC) 454; (1971) 82 ITR 821 (SC) Mevron Projects Pvt. Ltd f) CIT Vs Vived Marketing Servicing Pvt. Ltd., ITA No. 273/2009 order dated 17.09.2009 of Hon'ble Delhi High Court g) Khurana Engineering Ltd. Vs DCIT, SCA NO. 605 of 2013, (2013) 217 Taxman 75 (Guj.) h) Torrent Pvt. Ltd. Vs CIT, SCA No. 5857 of 2004, judgment dated 29.04.2013 of Hon'ble Gujarat High Court i) CIT vs. Dimension Apparels (P) Ltd. ITA No. 327/2014 (Del) dated 8.7.2014 j) CIT vs. M/s Chanakaya Exports (P) Ltd. ITA No. 684/2014 (Del) dated 12.11.2014 k) CIT vs. Satwant Exports ITA No. 725/2014 (Del) dated 26.11.2014 dated 26.11.2014 l) CIT vs. Micra India (P) Ltd. ITA No. 441, 444 to 446, 452 461/2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee intimated about the amalgamation before the issue of notice u/s 153C or not would not be relevant for deciding the issue of validity of the notice u/s 153C of the Act. Whether the assessee intimated or not the fact remains that M/s Images Credit and Portfolio (P) Ltd. ceased to exist after the approval of amalgamation by the Hon'ble Knowledge of the revenue or not any notice issued in the name of a non existent person is a nullity. e) Sixthly, in recent decision on similar facts, it is held by Hon'ble jurisdictional High Court held as under: The Hon'ble High Court of Delhi decided on 22.1.2015 in the case of Micra India Pvt. Ltd. as follows:- It is urged on behalf of the revenue that the ITAT fell into error in not noticing that the assessee, at the initial stages of the proceedings before the assessing officer, did not object to the proceedings and did not rely upon the amalgamation, it was contended that in these circumstances, the ITAIT should not have interfered with and quashed the assessment. Counsel (or the revenue argued that after receiving the notice u/s 153C, the assessee participated in the proceedings. The AO, in fact took note of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lia prescribes that proceedings etc. initiated cannot be deemed invalid merely by reason of mistake, defect or omission in any return of income, assessment or notice. The revenue had argued that this provision neutralizes procedural defects in jurisdiction. In these circumstances, it was submitted, having regard to the assessee's omission to urge the so-called illegality at the threshold, the Court ought to interfere with the order of the ITAT. This question, too, has been dealt within CIT vs. Dimension Apparels Pvt. Ltd. reported in 370 ITR 288. In that case after noticing section 292B, the Court discussed the ruling in Spice Entertainment (supra) wherein it had been held that since the assessment made in such cases is against an amalgamated company in respect of income of the amalgamating company for the period prior to the amalgamation, the income tax authorities are nevertheless under an obligation to substitute the successor in place of the amalgamated company. Thus, such a defect cannot be treated as procedural defect . In any event, it is to be noted that the fact of amalgamation of the assessee with the transferee company had been intimated and disclosed in response ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prevented from raising this ground in original appeal memo which clearly indicates that all is not well with revenue here. Merely because remand report in extant filed by Ld AO supported assessee's case, cannot be a grounds to ignore it or treat is as unreliable. He prayed that validity and sanctity of remand report which is validly filed by Ld AO through official channel to Ld Add CIT, may please be addressed in juxtaposition to contrary averments made in grounds raised at this stage. He regard to quote from Hon'ble Apex Court order in case of Parsuram Potteries 106 ITR page, 1; It has been said that the taxes (i.e. the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realizing that price should familiarize themselves with the relevant provisions and become well versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue 19 He submitted that so volte face and vacillating grounds by revenue, in view of available and speaking remand report, cannot be accepted and deserves to be rejected in limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Central Circle-17, New Delhi 22 From the above it is evident that the notice has been issued in the name of Computer Engineering Services Pvt. Ltd. That the Hon'ble Delhi High Court, which is the Jurisdictional High Court, has passed the order dt. 30.10.2007 under Section 394 of the Companies Act, 1956 approving the amalgamation of the assessee company with M/s Instronics Ltd. The relevant finding of their Lordships held as under. THIS COURT DOTH HEREBY SANCTION THE SCHME OF AMALGAMATION set forth in Schedule I annexed hereto and Doth hereby declare the same to be binding on all the shareholders creditors of the Transferor and Transferee Companies and all concerned and doth approve the said Scheme of Amalgamation with effect from the appointed date i.e. 01.04.2007. 23. Thus their Lordships have approved the amalgamation w.e.f. appointed date i.e. 1st April,2007. The order approving amalgamation was passed on 30.10.2007 by which M/s Computer Engineering Services (P) Ltd. which is a transferor company merged and amalgamated with M/s Instronics Ltd. which is a transferee company. Thus M/s Computer Engineering Services (P) Ltd. i.e. the assessee ceased t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el/ 2011). The ITAT upheld the order of the CIT, inter alia, holding that the assessment in respect of the company which was amalgamated under Sections 391/394 of the Companies Act was invalid. 2. Briefly the necessary facts are that the original assessee was amalgamated with M/s S S Bhatia Estate Developers Pvt. Ltd., to form M/s Festive Homes Pvt. Ltd. (hereinafter referred to as the transferee company') by virtue of a scheme of amalgamation approved by this Court on 17th November, 2009. The appointed date of amalgamation was 1st April, 2008. Notice was issued to the original assessee under Section 153C of the Income Tax Act on 8th September, 2010. On 8th October, 2010, the Revenue was informed that the original assessee (i.e. the transferor under the scheme of amalgamation) had been dissolved pursuant to the amalgamation scheme and approved by the Court and that consequently the return for Assessment Year 2009-2010 had not been filed by the original assessee. A reply to the Revenue's questionnaire was given by the assessee on 12th November, 2010, again bringing to the notice of the authorities that the scheme of amalgamation had dissolved the original assessee in who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee and the notice issued upon A;' which was not in existence at that time was insufficient to initiate proceedings against the assessee who had taken over the liability of A' earlier to the issue of such notice and such fact was also made known to the revenue. Thus, the reassessment proceedings were to be set aside on that ground alone. 27. Similarly, the Hon'ble Jurisdictional High Court vide order dated 17.9.2009 in ITA No. 273/2009 in the case of CIT vs. Vived Marketing Services Pvt. Ltd. (supra) held as under: When the AO passed the order of assessment against the respondent company, it has already been dissolved and struck off the register of the Registrar of companies under section 560 of the Companies Act. In these circumstances, the Tribunal rightly held that there could not have been any assessment order passed against the company which was not in existence as on that date in the eyes of law it had already been dissolved. The Tribunal relied upon its earlier decision in Impsat Pvt. Ltd. vs. ITO 276 ITR 136 (AT). We are of the opinion that the view taken by the Tribunal is perfectly valid and in accordance with law. No substantial question of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the appellant is precluded from challenging the proceedings so initiated as per provisions of section 292BB of the Act. Under the circumstances of the assessee challenging the assessment is not sustainable. Further it is submitted that the assessee has not given any fresh/additional evidence to substantiate its claim. Detailed observation and findings have already been given in the assessment order. It is emphasized that the said assessment order has been passed with the approval of Addl. CIT Central Range-2, New Delhi. Under the circumstances I stand by the additions made in the assessment order and pray that the addition made should be upheld and the prayer of the appellant be rejected. 31. It may be stated here that Coordinate Bench of the Tribunal in the case of M/s Images Credit and Portfolio (P) Ltd. vs. ACIT ITA No. 53010 to 5306/D/2013 A.Y. 2004-05 to 2008-09has held as under: Whether the assessee intimated about the amalgamation before the issue of notice under Section 153C or not would not be relevant for deciding the issue of validity of the notice under Section 153C of the Act. Whether the assessee intimated or not the fact remains that M/s Images Credit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eculiar procedure of describing the original assessee as the one in existence; the order also mentioned the transferee's name below that of M/s Micra India Pvt. Ltd. Now, that did not lead to the assessment being completed in the name of the transferee company. According to the AO, M/s Micra India Pvt. Ltd. was still in existence. Clearly, this was a case where the assessment was contrary to law, as having being completed against a non-existent company. The ITAT's decision is, in the circumstances, justified and warranted. 33. Considering the totality of the above facts and respectfully following the decision of Hon'ble Jurisdictional High Court in the case of M/s Spice Entertainment Ltd. we hold that the issue of notice under Section 153C in the name of M/s Computer Engineering Services (P) Ltd. on 4.10.2010 is void. Accordingly the same is quashed. Once the notice issued under Section 153C has been quashed the assessment completed in pursuance to such notice also cannot survive and the same is also quashed. 34. Before parting with the matter, we would like to deal with the contention of Ld CIT-DR that extant plea of amalgamation as raised by assessee is hit by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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