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TMI Blog2017 (7) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... lhi dated 22.11.2010 for the Assessment Year 2007- 08. 2. The revenue has raised the following grounds of appeal:- "1. The order of the learned CIT(APPEALS) is erroneous & contrary to facts & law. 2. On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in deleting the addition of Rs. 1,73,93,3907- made u/s 35 (I) ((ii) and ₹ 3,18,1417- made u7s 35 (1) (i) (iv) of the IT Act being the expenses on account scientific research. 2.1. The Ld. CIT (A) ignored the finding recorded by the A.O and the fact that the assessee did not file the necessary documents to substantiate its claim during the course of assessment proceedings. 3. On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in directing the A.O to recalculate the disallowance u7s 14 A of the Act by taking investment of Rs. 2,20,00,520/- for earning exempt income as against Rs. 16,20,90,0207- taken by the A.O. 3.1. The Ld. CIT (A) ignored the finding recorded by the A.O and the fact that the amount of investment for earning exempt income was correctly taken by the A.O." 3. The assessee has raised the following grounds of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenges the jurisdiction of the Ld. assessing officer in making the assessment on erstwhile Tara vegetable oil and food company limited which had amalgamated with mother dairy fruit and vegetable private limited w.e.f. forced April 2007. It was further mentioned that this fact was specifically brought to the notice of the Ld. assessing officer vide a letter dated 06/04/2009 yet the assessment order has been passed on 17th of August 2009 on the assessee company which is non-existent. It is further submitted that specific ground of appeal has been raised before the Ld. 1st appellate authority however the same was dismissed by paragraph No. 2 of his order. It is further mentioned that the decision of the Ld. CIT (A) is contrary to the decision of the Hon'ble Supreme Court and jurisdictional High Court on this point. Consequently the assessee raised the following additional ground:- "that on the facts and in the circumstances of the case, the Ld. CIT (A) erred in law in holding that the assessment order passed by the Ld. assessing officer on 17th of August 2009 did not suffer from lack of jurisdiction and that he had made valid assessment in accordance with law." 5. The Ld. auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to the scheme of amalgamation the amalgamation was effective from 1st April 2007 and by that date the appellant company shall stand dissolved without undergoing the process of winding up. Consequently by letter dated 06/04/2009 the assessee intimated this fact to the deputy Commissioner of income tax circle 1 (1) Baroda that that appellant has since been amalgamated with mother dairy fruit and vegetables private limited w.e.f. 1st April 2007. The letter also accompanied with the order of the Hon'ble High Court as well as the proof of registration of the same before the registrar of companies on 08/09/2008. 10. For the assessment year 2007 2008 the assessee filed its return of income showing income of Rs. 92884586/- on 26/10/2007 which was entirely set of against brought forward losses for earlier years. The assessment order placed before us was made on the assessee despite communication of the fact of amalgamation wide letter dated 6/10/ 2009 to him. Therefore the issue now before us is whether the assessment order made by the Ld. assessing officer is valid or not. 11. The Ld. authorized representative has relied upon the decision of the Hon'ble Supreme Court in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal. The appellant also filed cross objections, assailing the order of the CIT (A) on the ground that the assessment order, having been passed in the name of Spice Corp Ltd., a non-existent entity, was bad in law and void ab-initio. Dismissing the submissions made by the appellant in respect of the aboveground, the Tribunal held that the mere failure of the Assessing Officer to mention the name of the amalgamated company in the assessment order did not) vitiate the assessment as a whole since the assessment was, in substance and effect, made on the amalgamated company viz. MCorp Global (P) Ltd. and on the non-existent entity, viz Spice Corp Ltd. The Tribunal further held that the omission to mention the name of the amalgamated company in the assessment order was a mere procedural defect and, in terms of the provisions of Section 292B of the Act, such assessment was not invalid. In arriving at the aforesaid conclusion, the Tribunal laid emphasis on/the fact that there was sufficient representation and participation of the amalgamated company before the Assessing Officer during the course of the assessment proceedings, and that the Amalgamated company had preferred an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d prior to its amalgamation are being taken up against the appellant and it is the appellant which felt aggrieved of the assessment order and preferred appeal. The order was thus in substance and in fact, against the appellant amalgamated company. The mere omission on the part of the AO to mention the name of the appellant amalgamated company in place of M/s Spice was, therefore a procedural defect covered by the provisions/of section 292B of the Act. According to the Tribunal, if the Spice was non-existent, there was no reason for the amalgamation company to represent the same or to feel aggrieved against the said order and preferred appeal and get the same decided on merits. In other words, any appeal/preferred by a non-existence person must also be treated as non-est. All these acts of the appellants/ amalgamated company clearly show that it had been constantly treated the assessment made against the appellant in respect of the assessment of amalgamated company. Further, no prejudice is caused to the assessee merely because in the body of the assessment order name of the amalgamated company is not shown. On the aforesaid reasoning and analysis, the Tribunal summed up the positio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in para-14 of its order extracted above. Having regard this consequence provided in law, in number of cases, the Supreme Court held that assessment upon a dissolved company is impermissible as there is no provision in Income-Tax to make an assessment thereupon. In the case of Saraswati Industrial Syndicate Ltd. Vs. CIT, 186 ITR 278 the/legal position is explained in the following terms: "The question is whether on the amalgamation of the Indian Sugar Company with the appellant Company, the Indian Sugar Company continued to have its entity and was alive for/the purposes of Section 41(1) of the Act. The amalgamation of the two companies was effected under the order of the High Court in proceedings under Section 391 read with Section 394 of the Companies Act. The Saraswati Industrial Syndicate, the transferee Company was a subsidiary of the Indian Sugar Company, namely, the transferor Company. Under the scheme of amalgamation the Indian Sugar Company stood dissolved on 29th October, 1962 and it ceased to be in existence thereafter. Though the scheme provided that the transferee Company the Saraswati Industrial Syndicate Ltd. undertook to meet any liability of the Indian Sugar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an insurance company which was subrogated to the rights of another insured company was held not to be entitled to maintain an action in the nameof the company after the latter had been dissolved". After the sanction of the scheme on 11th April, 2004, the Spice ceases to exit w.e.f. lsl July, 2003. Even if Spice had filed the returns, it/became incumbent upon the Income tax authorities to substitute the successor in place of the said/dead person'. When notice under Section 143 (2) was sent, the appellant/amalgamated company appeared and brought this fact to the knowledge of the AO. He, however, did not substitute the name of the appellant on record. Instead, the Assessing Officer made the assessment in the name of M/s Spice which was non existing entity on that day. In such proceedings and assessment order passed/in the name of M/s Spice would clearly be void. Such a defect cannot be treated as procedural defect; Mere participation by the appellant would be of no effect as there is no estoppel against law. Once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved as under:- "Having given our thoughtful consideration to the submission advanced by the learned Counsel for/the appellant, we are of the view that the provisions of Section 2926 of the 1961 Act do not authorize the AO to ignore a defect of a substantive nature and it is, therefore, that the aforesaid provision categorically records that a return would not be treated as invalid, if the same "in substance and effect is in conformity with or according to the intent and purpose of this Act". Insofar as the return under reference is concerned, in terms of Section 140 of the 1961Act, the same cannot be treated to be even a return filed by the respondent assessee, as the same does not even bear her signatures and had not even been verified by her. In the aforesaid view of the matter, it is not possible for us to accept that the return allegedly filed by the assessee was in substance and effect in conformity with or according to the intent and purpose of this Act. Thus viewed, it is not possible for us to accept the contention advanced by the learned Counsel for the appellant on the basis of Section 292B of the 1961 Act. The return under reference, which had been tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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