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TMI Blog2017 (5) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... These appeals are filed by the Assessee for the assessment years 2009-10 and 2010-11 and cross appeal by Revenue for the assessment year 2009-10. The Assessee in both these appeals filed grounds against disallowance made u/s 40(a)(i) of the Act. The Assessee also filed an additional ground before us which reads as under : On the facts and the circumstances of the case the learned Commissioner of Income Tax (Appeals) and the Assessing Officer have erred in law in passing an order in favour of a non-existing entity and accordingly the order passed by the Assessing Officer and CIT (A) is null and void and is bad in law. 2. The Ld. Counsel for the Assessee submits that the assessment orders passed u/s 143(3) of the Act by the Assessing Officer in both these assessment years is bad in law and void ab initio as these assessment orders were passed on a non-existent entity. He submits that as on the date of passing the assessment orders the Assessee namely DSP Merrill Lynch Securities Trading Ltd amalgamated with DSP Merrill Lynch Ltd and therefore the assessments were made on a non-existent company. The Ld. Counsel submits that the additional ground being a legal ground and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2CA(4) of I.T. Act for both these assessment years. These facts are undisputed. On these facts, the question now to be addressed is whether the assessments made by the Assessing Officer are valid or void ab initio as they were made on a non-existent company namely DSP Merrill Lynch Securities Trading Ltd. which was amalgamated with DSP Merrill Lynch Ltd. w.e.f. 1.4.2010. As on the date of passing of the assessment orders, the Assessee namely DSP Merrill Lynch Securities Trading Ltd. is a non-existent company. In support of the contentions that the assessment made on a non-existent company is void ab initio, the Ld. Counsel for the Assessee placed reliance on the following decisions. (i) CIT Vs. Dimension Apparels Pvt. Ltd. [370 ITR 288] (Del) (ii) CIT Vs. Intel Technology India Pvt. Ltd. [380 ITR 272] (Kar) (iii) Siemens Technology Services Pvt. Ltd. Vs. ACIT in ITA No. 6313/Mum/2012 dated 16.11.2016 (iv) Westlife Development Ltd. Vs. Pr.CIT in ITA No.688/Mum/2016 6. We have heard both the parties, perused the orders of the authorities below and the decisions relied on. The Coordinate Bench in the case of Siemens Technology Services Pvt. Ltd. (supra) considered the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the facts were that a return was filed for Assessment Year 2002-03 on 30.10.2002 by M/s. Spice Corp Ltd., i.e., the amalgamating company. Subsequently, vide order dated 11.2.2004 passed by the Hon'ble High Court, the said company stood amalgamated with M/s. MCorp Private Ltd., i.e., the amalgamated company w.e.f. 1.7.2003. The return so filed was picked up for scrutiny assessment vide notice u/s. 143(2) of the Act dated 18.10.2003 in the name of M/s. Spice Corp Ltd., i.e., the amalgamating company. In the course of assessment proceedings, the factum of M/s. Spice Corp Ltd. having been dissolved as a result of amalgamation with M/s. MCorp Private Ltd. was brought to the notice of the Assessing Officer. However, the Assessing Officer vide order dated 28.3.2005 passed u/s. 143(3) of the Act framed the assessment on M/s. Spice Corp Ltd., i.e., the amalgamating company. In this factual background, the plea raised by the assessee before the Hon 'ble High Court was that the assessment was framed against a non-existing entity as M/s. Spice Corp Ltd. had already amalgamated with M/s. MCorp Private Ltd., and therefore, the assessment order dated 28.3.2005 suffered from a jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Karnataka High Court, following the judgement of the Hon'ble Delhi High Court in the case of Spice Infotainment Ltd. (supra), answered the following questions of law in favour of the assessee and against the Revenue. (1) Whether the Tribunal was correct in holding that the order passed by the Assessing Officer on M/s Software Silicon Systems India Pvt. Ltd., after being intimated about the merger with M/s Intel Technology India Pvt. Ltd., was without jurisdiction against the said company and null and void? (2) Whether the Tribunal was correct in holding that the provisions of section 292B of the Act will not make the assessment valid as a defect/omission to incorporate the name of M/s Intel Technology India Pvt. Ltd., in the assessment order as the same is not in substance and effect in confirmative with or according to the intend and purpose of this Act? (3) Whether the Tribunal has to examine the matter on merits and record finding on the controversy raised before it both by the revenue as well as the assessee in their separate appeals ? 11. To the similar effect are the judgements of the Hon 'ble Delhi High Court in the case of Dimensions Apparel Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the scheme of amalgamation approved by the Hon bie Bombay High Court on 14.12.2007 To the similar effect is the decision of the Mumbai Tribunal in the case of Ambuja Cements Rajasthan (supra). The Hon'ble Bombay High Court in the case of Jitendra Chandralal Navlani Anr. (surpa) also upholds the proposition that no assessment can be made in respect of non- existent entity. In fact, the judgment of the Hon'ble Bombay High Court also brings out that framing of assessment in respect of a non-existent entity goes to the root of the jurisdiction of the Assessing Officer to assess the non-existent concern and, thus, said decision also clearly answers the objection of the Revenue in the present case that the plea of the assessee is merely hyper-technical. 8.1 Considering the entirety of facts and circumstances of the case, we set- aside the action of the Assessing Officer in framing the impugned assessment against the Siemens Corporate Finance Pvt. Ltd. on 16/08/2012, because on the said date, it was a non-existing concern on account of its amalgamation with Siemens Technology and Services Pvt. Ltd. w.e.f. 01/10/2011 following the scheme of amalgamation approved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment was finalised on December 31, 2010, by the Assessing Officer. In the course of assessment, various additions were made. This was the subject-matter of appeal to the Commissioner of Income-tax (Appeals). It was urged in the appeal that on account of amalgamation and by operation of section 170 of the Income-tax Act the income-tax authorities were under a duty, upon receipt of information, to initiate complete proceedings against the transferee company which they had not done. This plea was accepted by the Commissioner of Income-tax (Appeals), who, inter alia, noted that on October 19, 2010, since the Assessing Officer changed, on account of an administrative order, an intimation was received by the Assessing Officer on November 18, 2010, stating that M/s. Micron Steels Pvt. Ltd. no longer existed on account of the amalgamation order, dated February 19, 2010. The Commissioner of Income-tax (Appeals) guided by various previous decisions of this court, formed the opinion that the contentions of the respondent-assessee was substantial and that the assessment orders as framed, were unsustainable. He, accordingly, set aside the assessment order. 4. The Revenue's appeal wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o longer res integra. As stated earlier, Spice Entertainment Ltd. (supra) is an authority for the proposition that completion of assessment in respect of a non-existent company, due to the amalgamation order, would render assessment in the name and in respect of the original assessee-company, a nullity. In Spice Entertainment Ltd. (supra), after referring to Saraswati Industrial Syndicate Ltd. v. CIT [1990] 186 ITR 278/53 Taxman 92 (SC), this court held as follows : 9. The court referred to its earlier judgment in General Radio and Appliances Co. Ltd. v. M.A. Khader [1986] 60 Comp Cas 1013 (SC). In view of the aforesaid clinching position in law, it is difficult to digest the circuitous route adopted by the Tribunal holding that the assessment was in fact in the name of amalgamated company and there was only a procedural defect. 10. Section 481 of the Companies Act provides for dissolution of the company. The company judge in the High Court can order dissolution of a company on the grounds stated therein. The effect of the dissolution is that the company no more survives. The dissolution puts an end to the existence of the company. It is held in M.H. Smith (Plant Hire) Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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