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TMI Blog2021 (4) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... e following three grounds: - "1. The learned CIT(A) has erred in law and facts in quashing the reopening proceedings under section 147 for the AY. 2010-11 in the case of Piramal International Pvt. Ltd. (which was renamed as PHL Holdings Pvt. Ltd. (amalgamated into M/s. Piramal Enterprises Ltd. The CIT(A) failed to appreciate that though the notice is addressed to M/s Piramal International Pvt. Ltd. The name of M/s Piramal Enterprises ltd. Is also mentioned alongwith it as "now Piramal Entprises Ltd. 2. The learned CIT(A) has erred in law and facts in not appreciating the fact that the assessee company has not raised any objection at the time of original assessment when the assessment was completed under section 143(3) on 31.12.2012 in the name of M/s Piramal International Pvt. Ltd. When the name was changed to PHL Holding Pvt. Ltd. Wef 15.11.2011. Since the assessee has not filed any objection at the time of original assessment, the jurisdiction for reopening the assessment lies with the Assessing Officer who has completed the assessment. 3. The learned CIT(A) has erred in law and facts by relying on the decision of the Hon'ble ITAT in the case of M/s. Shell India Markets Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n) Now [Piramal Enterprises Pvt. Ltd.]. As already stated above, PHL has been amalgamated with PEL w.e.f. 01.01.2013. The notice under section 148 of the Act dated 30.03.2016 i.e. after amalgamation but issued in the name of Piramal International Pvt. Ltd. (before amalgamation) now Piramal Enterprises Pvt. Ltd. 5. The CIT(A) relying on the decision of ITAT Mumbai in the case of Shell Markets India Pvt. Ltd. in ITA No. 773/Mum/2013 for AY 2008-09 and ITA No. 1055/Bang/2011 for AY 2007-08 vide order dated 20.12.2017, wherein quashed the assessment by observing as under:- "In view of the decision of the jurisdictional tribunal quoted above and various other decisions cited by the appellant, notice under section 148 issued and the assessment order passed in the name of amalgamating company, Piramal International Pvt. Ltd., which was non-existent as on date of the issue of the notice and the passing the order, is hereby quashed. Since the assessment order has been quashed, other pleas raised by the appellant are not decided. Due to quashing of the assessment order, other grounds of appeal raised by the appellant have become infructuous, accordingly, they are not decided." Aggrieve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 31 October 2016 in the name of SPIL (amalgamated with MSIL) making an addition of Rs. 78.97 crores to the total income of the assessee. While preferring an appeal before the Tribunal, the assessee raised the objection that the assessment proceedings were continued in the name of the non-existent or merged entity SPIL and that the final assessment order which was also issued in the name of a non-existent entity, would be invalid. 16. .................. 17. Mr. Zoheb Hossain, learned Counsel appearing on behalf of the appellant submitted that: (i) The High Court was not justified in quashing the final assessment order under Section 143 (3) only on the ground that the assessment was framed in the name of the amalgamating company, which was not in existence, ignoring the fact that the names of both the amalgamated company and the amalgamating company were mentioned in the assessment order; (ii) to (viii) ................. (ix) Consequently, in the alternative, in view of the order passed by this Court on 6 April 2018 in Skylight Hospitality LLP on the one hand and the order dated 16 July 2018 in the case of the present assessee for AY 2011-12 and the earlier order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsorption or blending of one by the other, both amount to amalgamation. When two companies are merged and are so joined, as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its entity." (iv) Fourthly, upon the amalgamating company ceasing to exist, it cannot be regarded as a person under Section 2(31) of the Act 1961 against whom assessment proceedings can be initiated or an order of assessment passed; (v) Fifthly, a notice under Section 143 (2) was issued on 26 September 2013 to the amalgamating company, SPIL, which was followed by a notice to it under Section 142(1); (vi) Sixthly, prior to the date on which the jurisdictional notice under Section 143 (2) was issued, the scheme of amalgamation had been approved on 29 January 2013 by the High Court of Delhi under the Companies Act 1956 with effect from 1 April 2012; (vii) Seventhly, the assessing officer assumed jurisdiction to make an assessment in pursuance of the notice under Section 143 (2). The notice was issued in the name of the amalgamating company in spite of the fact that on 2 April 2013, the amalgamated company MSIL had addressed a communication to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apparels, a Division Bench of the Delhi High Court affirmed the quashing of an assessment order dated 31 December 2010. The Respondent had amalgamated with another company and thus, ceased to exist from 7 December 2009. The Court rejected the argument of the Revenue that the assessment was in substance and effect in conformity with the Act by reason of the fact that the assessing officer had used correct nomenclature in addressing the Assessee; stated the fact that the company had amalgamated and mentioned the correct address of the amalgamated company. It was the Revenue's contention that the omission on the part of the assessing officer to mention the name of the amalgamated company is a procedural defect. The Delhi High Court rejected this contention. In doing so, it relied on the holding in Spice Entertainment, where the High Court expressly clarified that "the framing of assessment against a non-existing entity/person" is a jurisdictional defect. The Division Bench also relied on the holding in Spice Entertainment that participation by the amalgamated company in proceedings does not cure the defect as "there can be no estoppel in law", to affirm the quashing of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax - 6 Delhi32. The Special Leave Petition was dismissed by a two judge Bench of this Court consisting of Hon'ble Mr Justice Rohinton Fali Nariman and Hon'ble Ms Justice Indu Malhotra on 16 July 2018 in view of the order dated 2 November 2017 governing Civil Appeal No. 285 of 2014 in Spice Enfotainment and the connected batch of cases. Though, leave was not granted by this Court, reasons have been assigned by this Court for rejecting the Special Leave Petition. The law declared would attract the applicability of Article 141 of the Constitution. For, as this Court has held in Kunhayammed: "40...Where the order rejecting an SLP is a speaking order, that is, where reasons have been assigned by this Court for rejecting the petition for special leave and are stated in the order still the order remains the one rejecting prayer for the grant of leave to appeal. The petitioner has been turned away at the threshold without having been allowed to enter in the appellate jurisdiction of this Court. Here also the doctrine of merger would not apply. But the law stated or declared by this Court in its order shall attract applicability of Article 141 of the Constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itality LLP v Assistant Commissioner of Income Tax : (2018) 405 ITR 296 (Delhi) 35 "LLP Act 2008" upon conversion into an LLP), there was, as the Delhi High Court held "substantial and affirmative material and evidence on record" to show that the issuance of the notice in the name of the dissolved company was a mistake. The tax evasion report adverted to the conversion of the private limited company into an LLP. Moreover, the reasons to believe recorded by the assessing officer adverted to the approval of the Principal Commissioner. The PAN number of the LLP was also mentioned in some of the documents. The notice under Sections 147/148 was not in conformity with the reasons to believe and the approval of the Principal Commissioner. It was in this background that the Delhi High Court held that the case fell within the purview of Section 292B for the following reasons: "18...There was no doubt and debate that the notice was meant for the petitioner and no one else. Legal error and mistake was made in addressing the notice. Noticeably, the appellant having received the said notice, had filed without prejudice reply/letter dated 11.04.2017. They had objected to the notice being iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the notice that was in issue in Skylight Hospitality Pvt. Ltd. was under Sections 147 and 148. Hence, he urged that despite the fact that the notice is of a jurisdictional nature for reopening an assessment, this Court did not find any infirmity in the decision of the Delhi High Court holding that the issuance of a notice to an erstwhile private limited company which had since been dissolved was only a mistake curable under Section 292B. A close reading of the order of this Court dated 6 April 2018, however indicates that what weighed in the dismissal of the Special Leave Petition were the peculiar facts of the case. Those facts have been noted above. What had weighed with the Delhi High Court was that though the notice to reopen had been issued in the name of the erstwhile entity, all the material on record including the tax evasion report suggested that there was no manner of doubt that the notice was always intended to be issued to the successor entity. Hence, while dismissing the Special Leave Petition this Court observed that it was the peculiar facts of the case which led the court to accept the finding that the wrong name given in the notice was merely a technical err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Act shall, so far as may be, apply accordingly. (3) When any sum payable under this section in respect of the income of such business or profession for the previous year in which the succession took place up to the date of succession or for the previous year preceding that year, assesseed on the predecessor, cannot be recovered from him, the [Assessing] Officer shall record a finding to that effect and the sum payable by the predecessor shall thereafter be payable by and recoverable from the successor and the successor shall be entitled to recover from the predecessor any sum so paid. (4) Where any business or profession carried on by a Hindu undivided family is succeeded to, and simultaneously with the succession or after the succession there has been a partition of the joint family property between the members or groups of members, the tax due in respect of the income of the business or profession succeeded to, up to the date of succession, shall be assesseed and recovered in the manner provided in section 171, but without prejudice to the provisions of this section. Explanation.-For the purposes of this section, "income" includes any gain accruing from the transfer, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessor appealed against the assessment contending that since the notices were sent in the name of the Maharaja of Patiala and not to him as the legal representative of the Maharaja of Patiala, the assessments were illegal. The Bombay High Court held that the successor Maharaja was a legal representative of the deceased and while it would have been better to so describe him in the notice, the notice was not bad merely because it omitted to state that it was served in that capacity. Following these two decisions, this Court in Jai Prakash Singh held that an omission to serve or any defect in the service of notices provided by procedural provisions does not efface or erase the liability to pay tax where the liability is created by a distinct substantive provision. The omission or defect may render the order irregular but not void or illegal. Jai Prakash Singh and the two decisions that it placed reliance upon were evidently based upon the specific facts. Jai Prakash Singh involved a situation where the return of income had been filed by one of the legal representatives to whom notices were issued under Section 142(1) and 143(2). No objection was raised by the legal representative wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t scenario where the draft assessment order as well as the physical assessment order had been passed on the amalgamating company followed by reference to amalgamated company in the title. In that case also, the revenue"s Counsel before the Hon"ble Supreme Court urged that since the assessment order has been passed referring to both the names, the said order could not be recorded as invalid. Similar arguments were advanced by the ld. DR before us also. This aspect has already been considered by the Hon"ble Apex Court while rendering its decision in Maruti Suzuki Ltd supra. 8. We also find that the ld. DR had placed heavy reliance on the decision of the Hon"ble Delhi High Court in the case of Sky Light Hospitality LLP vs. ACIT reported in 405 ITR 296 which according to the ld. DR was subsequently approved by the Hon"ble Apex Court by way of dismissal of Special Leave Petition. We find that this judgment also was considered by the Hon"ble Apex Court while rendering its decision in Maruti Suzuki India Ltd. referred to supra wherein it had been duly mentioned that the conclusion reached in the case of Sky Light Hospitality LLP was based on its peculiar facts and hence, not applicable. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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