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TMI Blog2015 (11) TMI 1300X X X X Extracts X X X X X X X X Extracts X X X X ..... 4C of the Act on amalgamating company. Finally, the Assessing Officer passed final assessment order u/s 143(3) r/w section 144C of the Act on amalgamating company in pursuance to the directions of the ld. DRP dated 19.2.2013 u/s 144C(5) of the Act. Thus framing of assessment against non-existent entity/person goes to the root of the validity of the assessment which is not a procedural irregularity curable u/s 292B of the Act or under any other provision of the Act but it is a jurisdictional defect because there cannot be framing of any assessment order against a dead person or entity which is non-existent on the date of framing/passing assessment order. - Decided in favour of assessee. - ITA No. 1728/DEL/2014, ITA No. 1306/DEL/2015, ITA No. 981/DEL/2014 - - - Dated:- 23-11-2015 - Shri Chandramohan Garg, Judicial Member And Shri O. P. Kant, Accountant Member For the Appellant : Shri Ajay Vohra, Sr. Adv. Neeraj Jain, Adv. Sahil Mehta, Mrs. Nitya Gupta, CA For the Respondent : Ms Y. Kakkr, Sr. DR ORDER Per C. M. Garg, Judicial Member These appeals by the assessee and the revenue have been preferred against the assessment orders passed u/s 143(3) r/w se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant has raised said additional grounds of appeal which raise a legal issue, not involving any fresh investigation into the facts and based on the facts which are already placed on record. The ld. Senior counsel placing reliance on the decision of Hon'ble Supreme Court in the case of NTPC Ltd. Vs CIT 229 ITR 383 (S.C.) and pressing into service Rule 11 of ITAT Rules, 1963 the additional ground may kindly be admitted for consideration and adjudication on merits. 4. Ld. Ld. DR, replying to the above, contended that when the assessee participated assessment proceedings despite merger, then no legal objection or contention can be raised in this regard in the subsequent appellate proceedings. Ld. DR strongly objected to the admission of additional grounds. 5. Ld. Senior counsel also placed rejoinder and contended that on receipt of the DRP/Assessing Officer final order, the assessee came to know about illegality done by the authorities below wherein the assessment order was passed against a non-existing entity i.e. amalgamating company. 6. On careful consideration of above rival submissions, we are of the opinion that the assessee did not raise this legal contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and 142(1) against the amalgamating company and subsequently on 5.12.2012 13.2.2013, additional questionnaires were also issued to the amalgamating company. The ld. Senior counsel vehemently contended that the Assessing Officer passed draft assessment order u/s 144C of the Act on 22.3.2013 and the final assessment order u/s 143(3) r/w section 144C of the Act was passed on 20.1.2014 in pursuance to the directions of the DRP dated 19.12.2013 in the name of amalgamating company which was non-existent entity at the time of issuing notices and passing impugned order of the DRP/Assessing Officer. 8. The ld. Senior counsel pointed out that the impugned final assessment order u/s 143(3) r/w section 144C of the Act was passed in the name of amalgamating company which was non-existent entity since it was merged with amalgamated company in pursuance to order of Hon'ble Delhi High Court dated 12.10.2011 and 6.1.2012 and thus said order being void ab initio is liable to be quashed in view of proposition laid down by Hon'ble Jurisdictional Delhi High Court in the case of CIT vs Spice Infotainment Pvt. Ltd. (supra). 9. Replying to the afore noted submissions and contentions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artmental Representative pressing into service proposition laid down by ITAT Mumbai in the case of Century Enka Ltd. vs DCIT (supra), submitted that the order in the name of non-existing entity was passed on account of ignorance of the fact of amalgamation and for this reason, the assessment could not be held to be invalid and the right course was to set aside the assessment and restore the matter to the file of the Assessing Officer with a direction to re-frame the assessment in the correct name of the assessee. 11. Learned counsel of the assessee placing rejoinder to the above contention of the revenue has drawn our attention towards section 2(31) r/w section 4 of the Act and submitted that as per section 4 of the Act, the charge of income tax for any assessment year can be levied on a person and as per definition given in section 2(31) (iii) of the Act, a person includes a company also. Learned counsel of the assessee has further drawn our attention towards section 2(16) of the Act and submitted that the meaning of amalgamation in relation to companies means the merger of one or more companies with another company or merger of two or more companies to form one company and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment against a non-existing person or entity goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there could not be any assessment against a dead person. 14. On careful consideration of above submissions, at the very outset, we find it appropriate to note some admitted and undisputed facts that the assessee filed its return of income in the name of amalgamating company on 26.9.09 and the Assessing Officer issued notice on 18.8.2010 u/s 143(2). Subsequently on 12.10.11, the Hon'ble Delhi High Court passed an order sanctioning merger of assessee with Sapient Consulting Ltd. an amalgamated company and on 18.11.11, the assessee filed form 21 along with copy of the Hon'ble Delhi High Court order (supra) sanctioning the scheme of amalgamation with ROC and on 6.1.12 as per scheme of amalgamation and under Companies Act, the assessee amalgamating company merged with Sapient Consulting Ltd. in pursuance to the order of Hon'ble Delhi High Court w.e.f. 1.4.11 i.e. appointed date. It is also important to note that on 27.1.2012, the assessee filed a letter before the Assessing Officer intimating the merger of the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a case where assessment has been framed in the name of non-existent amalgamated company. Their lordships further held that the framing of assessment against non-existent 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. In the case of Spice Infotainment Ltd. (supra), their lordships also pointed out that the returns were filed by M/s Spice on the day when it was in existence. It would be permissible to carry out the assessment on the basis of those returns after taking the proceedings afresh from the stage of issuance of notice u/s 143(2) of the Act. It was also held that in substitute the name of the appellant/amalgamated company in the place of amalgamating company may be given and then notice may be issued as per provisions of the Act. 16. In the light of the ratio of the judgment of Hon'ble High Court in the case of Spice (supra), when we analyze the facts and circumstances of the present case, we clearly observe that undisputedly and admittedly, the return was filed by amalgamating company on 26.9.2009. The Assessing Officer issued notices u/s 143(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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