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TMI Blog2022 (11) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... re is merit in the submission of the Ld. counsel for the assessee. Therefore, in view of the submissions made we are of the view that this matter has to go back to file of the Assessing Officer for denovo consideration in the light of the decisions relied on by the assessee. Thus, we restore this issue to file of the Assessing Officer for denovo adjudication after providing adequate opportunity of being heard to the assessee. Accordingly, Ground No. 2 raised by the assessee is allowed for statistical purpose. Assessment Order on non-existent entity - HELD THAT:- We observe that on similar circumstances in which State Bank of Bikaner and Jaipur merged with the SBI , the Coordinate Bench following the decision of the PCIT v. Maruti Suzuki India Ltd., [ 2019 (7) TMI 1449 - SUPREME COURT] held that Assessment Order passed in the name of the erstwhile company is void ab-initio and quashed the same. DR has raised certain objections that (a) assessee has filed Form No. 35 in the erstwhile company name, we observe that the appeal cannot be filed before Learned Commissioner of Income Tax (Appeals) without following the Name/PAN mentioned in the Assessment Order . Therefore, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same as interest free funds were far higher than the investment in securities earning tax free income. 2. The Ld. CIT(A) erred in not deciding on the other grounds relating to incorrect computation of refund, adjustment of refunds granted while computing interest u/s 244A and initiation of penalty proceedings u/s 271(1)(c). 3. At the time of hearing, with regard to Ground No. 1 which is in respect of disallowance u/s. 14A of the Act, Ld. AR submitted the details of interest free funds and investment earning exempt income as under: - Particulars Amount (Rs. in crores) Own funds 49,032.66 Investment earning income exempt 8,755 4. Ld. AR invited our attention to the following case laws in which the decision of Hon'ble Apex Court in the case of Maxopp Investment Ltd. v. CIT reported in [2018] 402 ITR 640 was considered and followed. It was held that section 14A is not applicable to Banks where investments are held as stock in trade: (i). PCIT v/s. Punjab and Sind Bank [ITA Nos. 904 and 906/2019] (Delhi High Court); (ii). MUFG Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be first adjusted against the interest and thereafter against the tax and the issue has been decided in favour of the assessee in the case of State Bank of India for the A.Y. 2008-09 by the Tribunal vide Order dated 19.06.2019. Ld. AR relied on the following decisions: - a. PCIT v/s. Solan District Truck Operators Transport Co-op. Society reported in [2020] 122 taxmann.com 121 (Himachal Pradesh High Court) b. Union of India v/s. ACIT reported in [2016] 72 taxmann.com 348 (Mumbai Tribunal); c. DCIT v/s. State Bank of Saurashtra (now merged with the State Bank of India) [ITA No. 99/Mum/2016]; d. DCIT v/s. Peerless General Finance Investment Co. Ltd. reported in [2017] 88 taxmann.com 708 (Kolkata Tribunal); e. Grasim Industries Ltd. v/s. DCIT reported in [2021] 123 taxmann.com 312 (Mumbai-Tribunal) 11. Ld. AR further submitted that the Assessing Officer ought to compute refund correctly and be directed to adjust the amount of refund first against interest receivable u/s. 244A of the Act, and thereafter the balance amount against the principal component of tax. 12. Ld.DR relied on the orders of the authorities below. 13. Considered the rival submissions and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of provision and accordingly holding that the same is taxable u/s 41(1) 17. Assessee has further raised additional grounds in its appeal which are reproduced below: - Additional Grounds of appeal Additional Ground No. 1: Order passed on a non-existent entity is bad in law 1. On the facts and in the circumstances of the case and in law, the appellant submits that the assessment order passed by the assessing officer is bad in law as it is passed on a non-existent entity, viz., the State Bank of Indore, which entity has ceased to exist as on the date of the assessment order on account of its merger with the State Bank of India with effect from 25/08/2010 as a result of the Government of India Notification dated 28th July 2010, thereby rendering the entire assessment proceedings void ab initio against the non-existent entity. Additional Ground No. 2: Deduction in respect of education cess 2. On the facts and in the circumstances of the case and in law, the appellant submits that a deduction in respect of the education cess on the income-tax paid during the year be allowed while computing its income chargeable to tax. Each of the above grounds are independent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Maruti Suzuki India Ltd. reported in 416 ITR 613 (SC). 2. It is submitted although the assessee has vehemently contended that the AO has gravely erred in law by passing the assessment orders on a non-existent entity yet the record and the assessee's own conduct shows that even after merger of State Bank of Indore with State Bank of India, the assessee continued to conduct itself in the capacity of State Bank of Indore even though the same ceased to exist after 25.08.2010. In this regard, it is pertinent to mention the following undisputed and irrefutable facts: (a) It is seen from Form No. 35 i.e. appeals filed by the assessee before CIT(A) for all these 3 years on 24.01.2012, 17.04.2013 and 23.04.2013 that in all these Form No. 35, the name as well as PAN of State Bank of Indore i.e. PAN: AAECS7776C was mentioned. During arguments, Learned AR of the assessee has not given any plausible reason as to why the appeals continued to be filed in the name and PAN of this non-existent entity': (b) Further, even after merger, the assessee filed the return for A.Y. 2011-12 on 28.09.2011 in the name of State Bank of Indore and by mentioning the PAN of State Bank of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the case of amalgamation, the outer shell of the corporate entity is undoubtedly destroyed; it ceases to exist. Yet, in every other sense of the term, the corporate venture continues - enfolded within the new or the existing transferee entity. In other words, the business and the adventure lives on but within a new corporate residence, i.e., the transferee company. It is, therefore, essential to look beyond the mere concept of destruction of corporate entity which brings to an end or terminates any assessment proceedings..... 3.5 Finally, Hon'ble Supreme has held in Para 42 of its judgment as under: Before concluding, this Court notes and holds that whether corporate death of an entity upon amalgamation per se invalidates an assessment order ordinarily cannot be determined on a bare application of section 481 of the Companies Act, 1956 (and its equivalent in the 2013 Act), but would depend on the terms of the amalgamation and the facts of each case. (Emphasis supplied) 4.1 Similarly, Hon'ble Madars High Court also, in its judgment dated 12.02.2021 in the case of M/s. Mando Automotive India (P) Ltd. Vs. DCIT in W.P. No. 2779 of 2017, while referring to the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitio under Rule 11 of I.T. Rules, 1963. Since the additional ground raised by the assessee is legal ground which goes to the root of the case, accordingly, this additional Ground No. (i) is admitted for adjudication. 3. At the time of hearing, it is brought to our notice that Assessing Officer has observed in its Assessment Order that the erstwhile State Bank of Bikaner and Jaipur was a public sector banking company, as per the order GSR 156(E) dated 22.02.2017 notified vide the Gazette of India No. 128 dated 22.02.2017 the erstwhile State Bank of Bikaner and Jaipur has been acquired by/amalgamated into M/s. State Bank of India w.e.f 01.04.2017. Subsequently this case was selected for scrutiny and statutory notice u/s. 143(2) were issued and served on the assessee. Ld.AR brought to our notice that even though Assessing Officer has observed that State Bank of Bikaner and Jaipur is merged with M/s. State Bank of India still he passed an order in the name of the non existing entity. In this regard he relied on the decision of the Hon'ble Supreme Court in the case of PCIT v. Maruti Suzuki India Ltd., [2019] 416 ITR 613 (SC). 4. On the other hand, Ld.DR relied on the orders p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has filed Form No. 35 in the erstwhile company name, we observe that the appeal cannot be filed before Learned Commissioner of Income Tax (Appeals) without following the Name/PAN mentioned in the Assessment Order . Therefore, this argument is misplaced. (b) With regard to other arguments on filing the return of income in erstwhile bank name and not surrendering the PAN, the return of income was filed at the time when the merger scheme was not approved by Hon'ble High Court. With regard to surrender of PAN this has relevance when the whole business is merged with the new company and what is relevant is not existence of the PAN, the relevance is how the Assessing Officer treats the non existing company in the Assessment Order particularly when it is brought to his notice of the facts. Considering the above discussion, we allow the additional ground (i) raised by the assessee. The other grounds raised by the assessee are not adjudicated and hence kept open. ITA.No. 410/MUM/2022 (Revenue Appeal) 26. As we have already quashed the assessment order in assessee s appeal treating the same as void ab-initio, therefore, cross appeal filed by the revenue becomes infructuous ..... X X X X Extracts X X X X X X X X Extracts X X X X
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