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TMI Blog2020 (3) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... tes and events are as follows: i) OAS Digital Infrastructures Private Limited (in short 'OAS'/transferor) did not file a return of income for AY 2010-11. ii) OAS stood amalgamated with the petitioner, Oasys Green Tech Private Limited (in short 'OGT'/transferee), with effect from 01.02.2015 per order of the Madras High Court dated 20.08.2015 in Company Petition Nos.203 and 204 of 2015. iii) Notice under Section 148 of the Act dated 31.03.2017 addressed to OAS was issued, since, admittedly, the Department was unaware of the factum of amalgamation. iv) On 14.09.2017 OGT wrote to the Department bringing to its notice the merger and also requesting that the notice be handed over to the bearer of the letter. v) On 09.10.2017, OGT took the view that the proceedings for reasessment were non est, since notice under Section 148 had been issued upon a non-existing entity. vi) The Assessing Authority however, on the basis of the notices already issued proceeded to complete the re-assessment exparte passing the present impugned order under Section 144 of the Act, to the best of his judgment. vii) On merits, cash deposits in the bank account of the assessee have been treated as une ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eree entities in those cases had duly brought to the notice of the revenue the factum of amalgamation, inspite of which the revenue had initiated proceedings only as against the transferor/amalgamating entity. This was the reason why the Courts (in those cases) had interfered in the proceedings, holding that once the Department had been put to notice about the amalgamation, proceedings ought to have been initiated only in the hands of the transferee entities. 8. The case of Alamelu Veerappan (supra) is distinguished stating that it relates to individuals and not a corporate merger. The provisions of Section 159 that are applicable to the case of individuals are not applicable in the case of companies. The decision has not been accepted by the Department and is pending in Writ Appeal. 9. Heard learned counsel. A relevant factor to determine the assessable entity in cases such as the present, is the conduct of the transferee entity. OGT has not only omitted to bring to the notice of the revenue the factum of amalgamation, but, has by its conduct of filing a return of income post amalgamation in the name of OAS furthered the illusion that OAS continues to exist even after amalgamati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Delhi High Court had taken the view that reference to the wrong assessee in the notice was only a clerical error which could be corrected under Section 292B of the Act. xi) The case of Skylight (supra) was by the Supreme Court that held that it was only in the peculiar facts of that case that the Court had condoned the error in naming the assessee and the escapement of income in that case had been established conclusively otherwise. xii) The Supreme Court also took note of the position that that the decision in Skylight (supra) had been distinguished by the Delhi, Gujarat and Madras High Courts in the cases of Rajender Kumar Sehgal V. ITO ((2019) 260 Taxman 412), Chandreshbhai Jayantibhai Patel V. ITO ((2019) 261 Taxman 137) and Alamelu Veerappan (supra). xiii) Noting specifically that the Assessing Officer (in the case of Maruti Suzuki) had been informed of the fact that the amalgamating company had ceased to exist as a result of the Scheme of Amalgamation, despite which the jurisdictional notice had been issued only in its name, the appeal of the revenue was dismissed. xiv) At paragraph Nos.33 and 34, the Bench states as follows: 33 In the present case, despite the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasoning of the Tribunal to the effect that the error in the order of assessment was only procedural was held to be 'blemished with legal loopholes and contrary to law' by the Supreme Court. v) The Court noted that from 01.07.2003, SCL ceased to exist, plain and simple. vi) Taking note of the position that an Indian Company was a juristic person taking birth with incorporation and dying with dissolution, the Court reiterated that on amalgamation, the amalgamating company that stands subsumed with amalgamated entity and ceased to exist in the eyes of law as a separate company. vii) Thus, the framing of an order of assessment in the name of the erstwhile entity, where (a) returns had been filed earlier by the dead entity, (b) the Department was put to notice of such amalgamation, and (c) the amalgamated entity had participated in the assessment, was held to be bad in law as it did not constitute a mere procedural irregularity that could be cured by recourse to Section 292 of the Act. 12. As far as the case of Alamelu Veerappan (supra) is concerned, the decision is wholly distinguishable, since it relates to the provisions of Section 159(2) dealing with a deceased assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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