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TMI Blog2019 (12) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... However, there is failure on the part of the learned Assessing Officer to comply with the said direction inasmuch as he issued notices to the non-existent company and completed the assessment on it. - Decided against revenue. - ITA No.4176/Del/2017 - - - Dated:- 12-12-2019 - Shri G.S. Pannu, Vice President And Shri K. Narasimha Chary, Judicial Member For the Appellant : Shri Sulekha Verma, CIT(DR) For the Respondent : None ORDER PER K. NARASIMHA CHARY, J.M. Aggrieved by the Order dated 27/02/2017 in Appeal No. 92/16-17 (original)/108/16-17 (new), passed by the Ld. Commissioner of Income Tax (Appeals)-25, New Delhi ( Ld. CIT(A) ), Revenue preferred this appeal, where under the Ld. CIT(A) quashed the assessment order made on the name of M/s Pride Residency Private Limited being the amalgamated company. 2. Brief facts of the case are that by order dated 31/12/2010 passed under section 153C/143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) income of the assessee was assessed at ₹ 2,47,52,720/- by making an addition of ₹ 2,40,13,860/-on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct legal entity, nor the assessment was made in the hands of an existing correct legal entity. It was further submitted before the Ld. CIT(A) that the initiation of proceedings under section 264/143(3) of the Act, including issue of notice and also completion of assessment on the company which had already become a non-existent on account of its merger with another company was illegal and bad in law and, therefore, such assessment being bad in law deserves to be quashed. 6. It was further brought to the notice of the Ld. CIT(A) that a similar issue had arisen in the case of M/s SatkarFincap Ltd. (through Pride Residency Private Limited) for assessment year 2009-10, where vide order dated 14/7/2016 under section 250(6) of the Act in Appeal No. 60/2013-14, Ld. CIT(A) quashed the assessment order by holding that there was a deviation from the principles with regard to the amalgamation, the income even though has been earned by the amalgamating company, but if the information regarding the amalgamation is available at the time of assessment, the assessment has to be done in the hands of the amalgamated company. 7. Ld. CIT(A) considered the contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be granted. Basing on the record we proceed to hear the Ld. DR and decide the matter on merits. 10. We have gone through the record in the light of the submissions made by the Ld. DR. Facts relevant for proper appreciation of the contentions of the Revenue are that the assessee was really was SatkarFincap Ltd , a company in the group of companies led by the flagship concern M/s Sanskar Home Private Limited. The group is mainly engaged in the business of development and construction of buildings, homes, plots etc. trading in properties and undertaking construction/collaboration projects. Subsequently, the assessee amalgamated with Pride Residency Private Limited vide order dated 17/08/2012 of the Hon ble Delhi High Court passed under section 391(2) and 394 of the Companies Act, 1956, w.e.f., 1/4/2011, and consequently, the SatkarFincap Ltd. says it to exist, thereafter. Such a fact was informed to the learned Assessing Officer, CC-3, by the company vide letter dated 02/11/2012 and 23/02/2016. 10. Earlier Satkar was assessed by order dated 31/12/2010 at an income of ₹ 44,05,658/-against which they have filed appeal before the Ld. CIT(A), who by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. PCIT in the order under section 264 of the Act to the effect that the assessment made in the hands of the existing correct legal entity which fact he mentioned in the assessment order itself but issued notice to the company with PAN AAJCS 6820 ITA which was upon of M/s SatkarFincap Ltd, the non-existent company. CIT further observed that the ACIT, Central circle-13, New Delhi has no jurisdiction over the existing correct legal entity, namely, M/s Pride Residency Private Limited over which the deduction was vested in circle 20 (1), New Delhi. Ld. CIT(A), therefore, observed that neither the action was taken against the existing correct legal entity, namely, M/s Pride Residency Private Limited, nor the Assessing Officer involved, namely, ACIT, Central Circle-13, New Delhi, could have taken any legal action against the existing correct legal entity, as the jurisdiction over it was with some other learned Assessing Officer, the assessment order is vitiated and on this ground he quashed the same. 13. It is pertinent to note that under similar circumstances for the assessment year 2009-10, while disposing of the appeal No. 60/2013-14 by order dated 14/7/2016, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2014-15. So these facts do not admit of any doubt that in spite of the clear directions given by the Ld. PCIT under section 264 of the Act the learned Assessing Officer failed to comply with the same and repeated the earlier action of service of notice and completion of assessment on the amalgamating company which is easy to exist instead of doing so on the amalgamated company as he did for the assessment year 2014-15. 16. We do not find any fault with the Ld. CIT(A) in following the decision of the Hon ble Apex Court in the case of SaraswatiIndustrial Syndicate Ltd (supra) wherein it was held that when two companies amalgamated merged into one, the transfer company loses its entity as it serious to have its business, and their respective rights are liable to be determined under the scheme of amalgamation, but the corporate entity of the transfer company ceases to exist with effect from the date of the amalgamation is made effective. In this matter the amalgamation was effective from 1/4/2011 under the order dated 17/08/2012 passed by the Hon ble Delhi High Court under section 391 (2) and 394 of the Companies Act, 1956. The decision of the Hon ble High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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