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TMI Blog2024 (3) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... are, the assessee earlier known as Boeing International Corporation India Ltd. is a resident corporate entity. For the assessment year under dispute, the assessee filed its return of income under Section 139(1) of the Act on 29.11.2016 declaring income of Rs. 60,55,17,000. Subsequent to filing of return of income, Boeing International Corporation India Ltd. got merged with Boeing India Pvt. Ltd. as per the scheme of merger dated 27.02.2018 from the appointed date of Ist April 2017. The amalgamation of Boeing International Corporation India Ltd. with Boeing India Pvt. Ltd. was duly brought to the notice of the Assessing Officer vide letter dated 10.04.2018 with supporting evidences. Since, in the year under consideration, the assessee had entered into international transactions with its Associated Enterprises (AEs), the Assessing Officer made a reference to the Transfer Pricing Officer (TPO) to determine the Arm's Length Price (ALP) of the international transactions. Vide order dated 31.10.2019, the TPO suggested adjustment of Rs. 2,03,05,826 and accordingly sought enhancement of income to that extent. In terms with the order of the TPO, the Assessing Officer framed the draft as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al irregularity. In any case of the matter, he submitted, in the draft assessment order, the Assessing Officer has mentioned the name of the successor company as well. He submitted, though, in the final assessment order, the Assessing Officer has not mentioned the name of the successor company, however, non-mentioning of the name of the successor company, is not fatal to the assessment order as the Assessing Officer has passed the final assessment order in terms with the directions of the DRP, which is in the correct name and forms part of the final assessment order. He submitted, the Tribunal's order in case of the assessee for assessment year 2015-16 would not be applicable as in the said assessment year, the assessee had challenged the validity of the draft assessment order before learned DRP. Whereas, it is not the case in the impugned assessment year. He submitted, in case of PCIT vs. Mahagun Realtors Realer Pvt. Ltd. (2022) scc.online.sc 407, the Hon'ble Supreme Court while considering a similar issue has held that in case the assessment order mentions the names of both the amalgamating company and the amalgamated company, it is a valid order. He submitted, in any case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ger of Boeing International Corporation India Ltd. with Boeing India Pvt. Ltd. was very much in the knowledge of the Assessing Officer much prior to framing of the draft assessment order for the impugned assessment year. In fact, at the draft assessment stage, the Assessing Officer made a reference to the TPO to determine the Arm's Length Price (ALP) of international transaction undertaken by the assessee in the impugned assessment year. Interestingly, the TPO has passed the order under Section 92CA(3) of the Act on 31.10.2019 in the name of Boeing India Pvt. Ltd., the successor company. Inspite of that, the Assessing Officer went ahead and framed the draft assessment order in the name of the erstwhile company, Boeing International Corporation India Ltd. 11. Before us, learned Departmental Representative has submitted that in the draft assessment order, the Assessing Officer has mentioned the name of both the erstwhile company and the successor company. 12. However, we do not accept the contention of the learned Departmental Representative. A cursory glance of the draft assessment order dated 21.12.2019 clearly reveals that against the name of the assessee, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the fact of amalgamation was not brought to the notice of the departmental authorities. Further, even after the amalgamation, the assessee continued to file its return of income and responses in the name of the erstwhile company. In the aforesaid factual context, the Hon'ble Supreme Court held that the decision in case PCIT vs. Maruti Suzuki India Ltd. (supra) would not apply as facts are distinguishable. Thus, it is clearly evident, in case of CIT vs. Mahagun Realtor (supra), the Hon'ble Supreme Court never said that the ratio laid down in Maruti Suzuki India Ltd. is not good law. 15. On the contrary, the factual analysis of both the cases, would make it clear that Mahagun Realtor (supra) was decided based on its own peculiar facts. This has been lucidly explained by the Hon'ble jurisdictional High Court in case of CIT vs. Sony Mobile Communications India Pvt. Ltd. (supra), wherein the Hon'ble jurisdictional High Court applying the ratio laid down in the case of Maruti Suzuki (supra) has held the assessment order passed in the name of a non-existent entity to be void ab initio. For better clarity, we reproduce the observations of Hon'ble jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Line Del 3210 : (2012) 280 ELT 43] , a Division Bench of the Delhi High Court dealt with the question as to whether an assessment Neutral Citation Number: 2023/DHC/001366 ITA 115/2019 Page 8 of 15 in the name of a company which has been amalgamated and has been dissolved is null and void or, whether the framing of an assessment in the name of such company is merely a procedural defect which can be cured. The High Court held that upon a notice under Section 143(2) being addressed, the amalgamated company had brought the fact of the amalgamation to the notice of the assessing officer. Despite this, the assessing officer did not substitute the name of the amalgamated company and proceeded to make an assessment in the name of a non-existent company which renders it void. This, in the view of the High Court, was not merely a procedural defect. Moreover, the participation by the amalgamated company would have no effect since there could be no estoppels against law : (SCC OnLine Del paras 11-12) "11. After the sanction of the scheme on 11-4-2004, Spice ceases to exit w.e.f. 1-7-2003. Even if Spice had filed the returns, it became incumbent upon the Income Tax Authorities to substitute t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals and special leave petitions are dismissed. 28. The submission, however, which has been urged on behalf of the Revenue is that a contrary position emerges from the decision of the Delhi High Court in Skylight Hospitality LLP [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405 ITR 296] which was affirmed on 6-4-2018 [Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] by a twoJudge Bench of this Court consisting of Hon'ble Mr Justice A.K. Sikri and Hon'ble Mr Justice Ashok Bhushan. In assessing the merits of the above submission, it is necessary to extract the order dated 6-4-2018 [Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] of this Court : (Skylight Hospitality case [Skylight Hospitality LLP v. CIT, (2018) 13 SCC 147] , SCC p. 147, para 1) "1. In the peculiar facts of this case, we are convinced that wrong name given in the notice was merely a clerical error which could be corrected under Section 292-B of the Income Tax Act. The special leave petition is dismissed. Pending applications stand disposed of." Now, it is evident from the above extract that it was in the peculiar facts of the case that this Court indicated its agreement that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s Skylight Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused." 29. The decision in Spice Entertainment [Spice Entertainment Ltd. v. Commr. of Service Tax, 2011 SCC OnLine Del 3210 : (2012) 280 ELT 43] was distinguished with the following observations : (Skylight Hospitality case [Skylight Hospitality LLP v. CIT, 2018 SCC OnLine Del 7155 : (2018) 405 ITR 296] , SCC OnLine Del para 19) "19. Petitioner relies on Spice Infotainment v. CIT [ This judgment has also been referred to as Spice Infotainment Ltd. v. CIT, (2012) 247 CTR (Del) 500] . Spice Corp. Ltd., the company that had filed the return, had amalgamated with another company. After notice under Sections 147/148 of the Act was issued and received in the name of Spice Corp. Ltd., the assessing officer was informed about amalgamation but the assessment order was passed in the name of the amalgamated company and not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... algamation, in which rights and liabilities of one company are transferred or devolved upon another company, the successor-in-interest becomes entitled to the liabilities and assets of the transferor company subject to the terms and conditions of contract of transfer or merger, as it were. Later, in Singer India Ltd. v. Chander Mohan Chadha this court held as follows: "8. ..there can be no doubt that when two companies amalgamate and merge into one, the transferor company loses its identity as it ceases to have its business. However, their respective rights and Neutral Citation Number: 2023/DHC/001366 ITA 115/2019 Page 12 of 15 liabilities are determined under the scheme of amalgamation, but the corporate identity of transferor company ceases to exist with effect from the date the amalgamation is made effective." 33. In Maruti Suzuki (supra), the scheme of amalgamation was approved on 29.01.2013 w.e.f. 01.04.2012, the same was intimated to the AO on 02.04.2013, and the notice under Section 143(2) for AY 2012-2013 was issued to amalgamating company on 26.09.2013. This court in facts and circumstances observed the following: "35. In this case, the notice under Section 143(2) un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court, in the previous decisions. 35. There is no doubt that MRPL amalgamated with MIPL and ceased to exist thereafter; this is an established fact and not in contention. The respondent has relied upon Spice and Maruti Suzuki (supra) to contend that the notice issued in the name of the amalgamating company is void and illegal. The facts of present case, however, can be distinguished from the facts in Spice and Maruti Suzuki on the following bases. 36. Firstly, in both the relied upon cases, the assessee had duly informed the authorities about the merger of companies and yet the assessment order was passed in the name of amalgamating/non-existent company. However, in the present case, for AY 2006-2007, there was no intimation by the assessee regarding amalgamation of the company. The ROI for the AY 2006-2007 first filed by the respondent on 30.06.2006 was in the name of MRPL. MRPL amalgamated with MIPL on 11.05.2007, w.e.f. 01.04.2006. In the present case, the proceedings against MRPL started in 27.08.2008- when search and seizure was first conducted on the Mahagun group of companies. Notices under Section 153A and Section 143(2) were issued in the name MRPL and the representati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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