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TMI Blog2021 (12) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... otice issued on the amalgamating company was challenged. In this case, however, the assessee specifically brought it to the notice of the learned Assessing Officer that there was a merger of the companies, and there was a direction of the Ld. PCIT to issue notice and hear they correct the existing legal entity. 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 Under similar circumstances, in the case of a group company a coordinate Bench of this Tribunal in ACIT vs. M/s. Pride Redidency (P) Ltd ) [ 2019 (12) TMI 694 - ITAT DELHI] upheld the action of the Ld. CIT(A) in crashing the assessment order that was framed in case of the nonexisting company - Decided against revenue. - ITA No. 4182/Del/2017 - - - Dated:- 9-12-2021 - Shri R.K. Panda, Accountant Member And Shri K. Narasimha Chary, Judicial Member For the Appellant : Sh. V.K. Dhingra, CA For the Respondent : Sh. T Kipgen, Sr. DR ORDER PER K. NARASIMHA CHARY, J.M. Aggrieved by the Order dated 27/02/2017 in Appeal No. 95/16-17 (original)/113/16-17 (new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omply with the directions of the Ld. PCIT, particularly, that the assessment be made in the hands of the existing correct legal entity , inasmuch as, the learned Assessing Officer neither give notice to the 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. 5. 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 informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Industries Pvt. 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 SPN ceased to exist thereafter. Such a fact was informed to the learned Assessing Officer, CC-3, by the company vide letter dated 23/02/2016. PAN No of M/s SPN Milk Products was AAICS7591K and the PAN No of M/s Pride Residency is AAGCP0358K. 10. Pursuant to the search and seizure operations carried out in Sanskar group of cases on 7/8/2010, covering the M/s SPN Milk Products (assessee) also under section 132/133A of the Act, assessment in the case of the assessee was completed under section 153A of the Act read with section 143(3) of the Act by order dated 26/3/2013 at an income of ₹ 1,93,23,540/-.Though an appeal was preferred by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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, Ld. CIT(A) held that the assessment order passed on M/s Pride Residency Private Limited (in the case of M/s SatkarFincap Ltd.) was rendered void and quashed the same. In the present case in the impugned order Ld. CIT(A) read the order of his predecessor for the assessment year 2009-10 and while following the same quashed the assessment order. 14. It is not in dispute, and further matter it is so mentioned in the assessment order, that Ld. PCIT in the order dated 30/3/2015 passed under section 264 of the Act, observed that the assessment made by the Assessing Officer under section 153A of the Act has been quashed on technical grounds because the learned Assessing Officer issued notice and completed the assessment in the name of non-existing company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income-Tax Vs. Norton Motors (2005) 275 ITR 595 (Punjab Haryana High Court),CIT Vs. Harjinder Kaur(2009) 222 CTR (P H) 254 andSri Nath Suresh Chand Ram Naresh Vs. Commissioner of Income Tax ( 2006) 280 ITR 396 (All), it had been held that such a defect cannot be treated as a procedural one and once it is found that the assessment is framed in the name of a nonexistent entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act and, thus the assessment orders framed by the AO on a non-existent company were a nullity in the eyes of law and void and the provisions of Section 292B could not rescue the appellant department. 17. In this context, 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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