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TMI Blog2023 (5) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby quash the assessment order. - ITA No.46/PUN/2021, C.O. No.08/PUN/2021 (Arising out of ITA No.46/PUN/2021) - - - Dated:- 2-1-2023 - Shri Inturi Rama Rao, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Revenue : Shri J. P. Chandraker For the Assessee : Shri Percy Pardiwalla And Shri Hiten Chande ORDER PER INTURI RAMA RAO, A M: This is an appeal filed by the Revenue directed against the order of ld. Commissioner of Income Tax (Appeals)- 13, Pune [ the CIT(A) ] dated 23.06.2020 for the assessment year 2014-15. The Cross Objection filed by the assessee against the appeal of the Revenue. 2. Briefly, the facts of the case are that the assessee is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of providing Information Technology Enabled Services (ITES) to Barclays Bank PIc, United Kingdom (BBPLC) and its affiliates. The return of income for the assessment year 2014-15 was filed on 25.11.2014 declaring total income of Rs.1,13,02,89,902/- after claiming deduction u/s 10AA of the Income Tax Act, 1961 ( the Act ). The appellant company also reported international transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal ( NCLT ) dated 02.11.2017 formerly known as M/s. Barclays Shared Services Pvt. Ltd. now presently known as Barclays Global Service Centre Pvt. Ltd.. The appointed date for amalgamation was 01st April, 2017. However, the Scheme was approved by the Hon ble NCLT on 02.11.2017 but, became effective only on filing the prescribed Form INC-28 along with prescribed fee before the Registrar of the Company before April, 2017. The return of income was filed in the name of amalgamating company, as the process of amalgamation was not completed. During the course of assessment proceedings under consideration, the assessee company had brought to notice of the Assessing Officer that the factum of amalgamation vide letter dated 15.12.2017 along with copies of the amalgamation scheme dated 26.12.2017 placed at page no.1199 of Paper Book. In-spite of this, the Assessing Officer passed the assessment order in the name of amalgamating company. 6. The assessee company challenged the very validity of the assessment order on the ground that the assessment order was passed in the name of non-existing entity placing reliance on the following judicial precedents :- (i) CIT vs. Micron Steels ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther submits that the PAN of the assessee is still active in the assessment records and the refund was also issued in the name of the old company i.e. amalgamating company. 11. We heard the rival submissions and perused the material on record. The issue that arises for our consideration is whether or not an assessment order passed in the name of amalgamating company i.e. non-existing company, is valid in the eyes of law. There is no dispute about the fact that the factum of amalgamation was put to the notice of the Assessing Officer during the course of assessment proceedings. Despite knowing very well that the amalgamating company was not inexistence at the time of passing the assessment order, still the Assessing Officer had chosen to pass an assessment order in the name of the amalgamating company i.e. M/s. Barclays Shared Services Pvt. Ltd.. The Hon ble Supreme Court in the case of PCIT vs. Maruti Suzuki India Ltd. 416 ITR 613 (SC) after making a reference of its earlier decision in the case of CIT vs. Spice Infotainment Ltd. 12 ITR-OL 134 (SC) and Saraswati Industrial Syndicate Ltd. vs. CIT, 186 ITR 278 (SC) held as follows :- 33. In the present case, despite the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lgamating company had ceased to exist and on its ceasing to exist, it cannot be regarded as a person against whom assessment proceeding can be initiated. In said case before notice under section 143(2) of the Act was issued on 26-9- 2013, the scheme of amalgamation had been approved by the high court with effect from 1-4-2012. It has been observed that assessment order passed for the assessment year 2012-13 in the name of nonexisting entity is a substantive illegality and would not be procedural violation of Section 292(b) of the Act. The Supreme Court in its aforesaid decision, has quoted an extract from its decision in Saraswati Industrial Syndicate Ltd. v. CIT [1990] 53 Taxman 92/186 ITR 278. The Supreme Court has also referred to decision of Delhi high court in the case of CIT v. Spice Enfotainment Ltd. [2018] 12 ITR-OL 134 (SC) and observed that in its decision Delhi high court had held that assessment order passed against non-existing company would be void. Such defect cannot be treated as procedural defect and mere participation of appellant would be of no effect as there is no estoppel against law. Such a defect cannot be cured by invoking provisions under section 292B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making a reference to the decision of the Hon ble Supreme Court in the cases of Maruti Suzuki India Ltd., Spice Enfotainment Ltd. and Sky Light Hospitality LLP vs. CIT 405 ITR (St.) 12 (SC) reiterated that the assessment made in the name of non-existing company i.e. amalgamating company is not valid in law even if the assessee participated in the assessment proceedings. And such error cannot be corrected by recourse to the provisions of section 92B of the Act. It was further held that even though PAN card of the amalgamating company is alive and active, cannot be the reason to uphold the validity of the assessment. The Hon ble High Court had further held that the decision of the Hon ble Supreme Court in the case of Sky Light Hospitality LLP referred supra cannot be pressed into service as the decision was rendered in the peculiar facts of the case. The relevant observations of the Hon ble Bombay High Court in the case of Alok Knit Exports Ltd. (supra) are as under :- 6. The Apex Court in its recent judgment on this subject in Pr. CIT v. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375/265 Taxman 515/416 ITR 613, considered the judgment of Sky Light Hospitality LLP (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rary view was taken by the Hon ble Madras High Court in the case of Oasys Green Tech Pvt. Ltd. vs. ITO 426 ITR 124 (Mad.). 16. Subsequently, even the Hon ble Supreme Court in the case of PCIT vs. Mahagun Realtors (P.) Ltd., 443 ITR 194 (SC) considering the conduct of the assessee that no intimation by the assessee regarding the amalgamation of the company and the original return of income was not even revised, though the time was available after the amalgamation and the assessee company had fully held it itself as an assessee before all forums, held that the assessment made in the name of amalgamating company is valid in law. On perusal of the decision of the Hon ble Supreme Court in the case of Mahagun Realtors (P) Ltd. (supra), it can be discerned that the decision was rendered based on the conduct of the assessee before all the forums. The Hon ble Supreme Court itself had observed vide para 33 of the said decision that the facts in the cases of Maruti Suzuki India Ltd., Spice Enfotainment Ltd. referred supra were distinguishable. What weighed with Hon ble Supreme Court in arriving at the conclusion reached is that the assessee had deliberately mislead the Department by not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a latter case, the Courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings. In H.H. Maharajadhiraja Madhav Rao Jiwaji Rao Scindia Bahadur v. Union of India [1971] 3 SCR 9 this Court cautioned: It is not proper to regard a word, a clause or a sentence occurring in a judgment of the Supreme Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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