M/s. N.J. Steels Pvt. Ltd., New Delhi V. ACIT, New Delhi

CO 144/DEL/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8344 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 19-02-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 12-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 23-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GUNJAN P RASAD
• Keywords: Validity of assessment
• Section: 69C; 142(1); 153A

Judgement Text

ITA NOS. 545-550/DEL/2012 & C.O. NOS. 139-144/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER I.T.A. NOS. 545, 546, 547, 548, 549 & 550/DEL/2012 A.YRS. : 2003-04, 2004-05, 2005-06, 2006-07, 2007-0 8 & 2008-09 ACIT, CENTRAL CIRCLE - 21, ROOM NO. 344, E-2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI 55 VS. M/S N.J. STEELS PVT. LTD., (AMALGAMATED WITH M/S LIFE TIME BUILDCON PVT. LTD.), THROUGH M/S LIFE TIME BUILDCON PVT. LTD., C-109, LAJPAT NAGAR-I, NEW DELHI (PAN: AABCN6761B) AND CROSS OBJECTION NOS. 139, 140, 141, 142, 143 & 14 4/DEL/2012 A.YRS. 2003-04, 2004-05, 2005-06, 2006-07, 2007-08 & 2008-09 M/S N.J. STEELS PVT. LTD., VS. ACIT, CENTRAL CIRCL E-21, (AMALGAMATED WITH M/S LIFE TIME ROOM NO. 344, E- 2, ARA BUILDCON PVT. LTD.), CENTRE, JHANDEWALAN EXTN. , THROUGH M/S LIFE TIME BUILDCON PVT. LTD., NEW DELH I 55 C-109, LAJPAT NAGAR-I, NEW DELHI (PAN: AABCN6761B) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDEN (RESPONDEN (RESPONDEN (RESPONDENT) T)T) T) ASSESSEE BY : SH. SALIL KAPOOR, ADVOCATE DEPARTMENT BY : SH. GUNJAN PRASAD, C.I.T.(D.R.) ORDER ORDER ORDER ORDER PER BENCH PER BENCH PER BENCH PER BENCH THESE APPEALS BY THE REVENUE AND CROSS OBJECTIONS B Y THE ASSESSEE EMANATE OUT OF COMMON ORDER OF THE LD. COMMI SSIONER OF INCOME TAX (A) FOR THE CONCERNED ASSESSMENT YEARS. SINCE THE ISSUES ARE CONNECTED AND THE APPEALS WERE HEARD TOGETHER. THESE ARE BEING CONSOLIDATED FOR THE SAKE OF CONVENIENCE BY THIS C OMMON ORDER. ITA NOS. 545-550/DEL/2012 & C.O. NOS. 139-144/DEL/2012 2 2. IN THESE CASES COMMON LD. COMMISSIONER OF INCOME TA X (A)S ORDER HAS BEEN QUESTIONED BY THE PARTIES ON A COMMON GROUNDS OF THE RESPECTIVE APPEALS/ CROSS OBJECTIONS. 3. THE REVENUE HAS QUESTIONED THE FIRST APPELLATE O RDER ON THE FOLLOWING COMMON GROUNDS IN ITS APPEALS :- I) THAT THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN LAW AND ON FACTS OF THE CASE IN UPHOLDING THE ASSESSMEN T ON A COMPANY WHICH HAS BEEN DISSOLVED / AMALGAMATED UNDER SECTION 391 AND 394 OF THE COMPANIES ACT, 1956 IS I NVALID. II) THAT THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION O F ` 33,39,388/- MADE ON ACCOUNT OF UNEXPLAINED PURCHASE U/S. 69C OF THE I.T. ACT. III) THAT THE LD. COMMISSIONER OF INCOME TAX (A) ERRE D IN LAW AND ON FACTS OF THE CASE IN ACCEPTING THE TRANSACTI ONS MADE IN CASH BY THE ASSESSEE COMPANY REGARDING SALE AND PURCHASE. IV) THAT THE LD. COMMISSIONER OF INCOME TAX (A) ERRE D IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION O F ` 4,34,150/- MADE ON ACCOUNT OF EXPENSES AND DEPRECIAT ION. V) THAT THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN LAWS AND ON FACTS IN HOLDING THAT THE STATEMENT OF VARIO US PERSONS WITHOUT BEING CONFRONTED TO THE ASSESSEE CO MPANY HAVE WEAK EVIDENTIARY VALUE. ITA NOS. 545-550/DEL/2012 & C.O. NOS. 139-144/DEL/2012 3 VI(A) THE ORDER OF THE LD. COMMISSIONER OF INCOME TA X (A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURS E OF THE HEARING OF THE APPEAL. 4. THE ASSESSEE ON THE OTHER HAND HAS OBJECTED THE FIRST APPELLATE ORDER IN ITS CROSS OBJECTIONS ON THE FOLLOWING COMMON GROUNDS :- I) THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (A) HAS E RRED IN NOT HOLDING THAT THE NOTICE ISSUED U/S. 153C AND TH E ASSESSMENT ORDER PASSED U/S. 153C/143(C) ARE ILLEGA L, BAD IN LAW, WITHOUT JURISDICTION AND BARRED BY TIME LIMI TATION. II) THAT THE DOCUMENTS FOUND DURING SEARCH PROCEEDI NGS, AS REFERRED TO IN THE SATISFACTION NOTE, DO NOT BELONG TO ASSESSEE AS THE SAME WERE PART OF WORKING PAPERS OF THE C.A. SH. B.K. DHINGRA IN WHOSE OFFICE THE SEARCH WAS CONDUCTED. HENCE, THE NOTICE ISSUED U/S. 153C, BA SED ON SAID DOCUMENTS, IS ILLEGAL, BAD IN LAW AND WITHOU T JURISDICTION. III) THAT ADMITTEDLY, AS RECORDED IN THE SATISFACTIO N NOTE, NO SEIZED DOCUMENT RELATED TO THE RELEVANT ASSESSMENT Y EAR WAS FOUND AND THE SEIZED PAPER REFERRED IN THE SAI D SATISFACTION NOTE WERE DULY REFLECTED IN THE REGULA R BOOKS OF ACCOUNT AND NO INCRIMINATING MATERIAL WAS FOUND. H ENCE, THE NOTICE ISSUED U/S. 153C IS ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. ITA NOS. 545-550/DEL/2012 & C.O. NOS. 139-144/DEL/2012 4 IV) THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LD. COMMISSIONER OF INCOME TAX (A) HAS BARRED ON FACT S AND IN LAW IN HOLDING THAT THE ASSESSMENT HAS BEEN FR AMED IN CONFORMITY WITH STATUTORY PROVISION OF SECTION 153C R/W SECTION 153A OF THE ACT. V) THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN F ACTS AND ON LAW IN UPHOLDING THE VALIDITY OF ASSESSMENT PARTICULARLY WHEN THE SEIZED DOCUMENT WERE HANDED O VER TO THE ASSESSING OFFICER WHO FRAMED THE ASSESSMENT AN D THE ADDITIONS MADE ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. VI) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND THE PROVISION OF THE LAW, THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN NOT CONSIDERING THE FACT THAT THE ASSESSMENT PROCEEDING FOR THE YEAR UNDER APPEAL WAS NOT PENDING ON THE DATE OF THE RECORDING OF SATISFACTIO N U/S. 153C OF THE ACT AND ACCORDINGLY THE SAME DID NOT AB ATE FOR THE PURPOSE OF INITIATION OF PROCEEDINGS U/S. 153C AND AS SUCH THE ASSESSMENT BEING BAD IN LAW DESERVES TO BE QUASHED. VII) THAT THE RESPONDENT RESERVES THE RIGHT TO ADD/ AMEND/ ALTER THE GROUNDS OF CROSS OBJECTION. 5. ON THE PERUSAL OF THE ABOVE GROUNDS OF THE APPE ALS/ CROSS OBJECTIONS, WE FIND THAT THE ISSUE RAISED IN THE GR OUND NO. 1 OF THE REVENUE APPEAL GOES TO THE ROUTE OF THE MATTER. I N THIS CONNECTION, THE ISSUE RAISED WAS AS TO WHETHER THE ASSESSMENT O RDER PASSED ON THE ITA NOS. 545-550/DEL/2012 & C.O. NOS. 139-144/DEL/2012 5 ASSESSEE IS INVALID, SINCE THE ASSESSEE COMPANY STOOD DISSOLVED ON AMALGAMATION WITH M/S LIFE TIME BUILDCON P LTD. THE REFORE, WE ADJUDICATE UPON THIS ISSUE IN THE FIRST INSTANCE. 6. THE REVENUE HAS QUESTION THE ACTION OF THE LD. C OMMISSIONER OF INCOME TAX (A) IN HOLDING THAT ASSESSMENT ORDER PAS SED ON THE ASSESSEE IS A NULLITY AS THE COMPANY STOOD DISSOLVED ON AMALGAMATION WITH M/S LIFE TIME BUILDCON P LTD. LD. COMMISSIONER OF INCOME TAX (A) IN THIS CASE HAS GIVEN A FINDING THAT HE HAS GONE T HROUGH THE COPY OF MASTER DATA OF REGISTRAR OF COMPANIES, DELHI AND HARYA NA. AS PER THE SAME THE STATUS OF THE ASSESSEE COMPANY WAS MENTION ED AS AMALGAMATED MEANING THEREBY DISSOLVED. ACCORDIN GLY, IT WAS AN ADMITTED POSITION THAT THE ASSESSEE COMPANY M/S N.J. STEELS PVT LTD. STOOD DISSOLVED ON AMALGAMATION WITH M/S LIFE TIME B UILDCON P LTD. THAT IT WAS AN ADMITTED FACT THAT AFTER FILING THE R ETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR, UNDER PROTEST, THE AS SESSEE COMPANY INFORMED TO THE ASSESSING OFFICER ABOUT THE FACT O F THE AMALGAMATION VIDE ITS LETTER FILED IN RESPONSE TO NOTICE U/S. 14 3(2) AND U/S. 142(1) OF THE I.T. ACT, 1961. THE TRANSFEREE COMPANY IT DID NOT PARTICIPATED IN THE ASSESSMENT PROCEEDINGS. IN THIS REGARD, LD. CO MMISSIONER OF INCOME TAX (A) NOTED THE FOLLOWING CASE LAWS:- - IMPSAT (P) LTD VS. I.T.O., ITAT, DELHI A BENCH I .T.A. NO. 1430/DEL/2004 DATED 28.7.2004 : 2005 TTJ (DEL) 552 : (2004) 91 ITD 354 (DEL.). - COMMISSIONER OF INCOME TAX VS. VIVED MARKETING SER VICING PVT. LTD. I.T.A. NO. 273/2009. ITA NOS. 545-550/DEL/2012 & C.O. NOS. 139-144/DEL/2012 6 - C.I.T. VS. EXPRESS NEWSPAPERS LTD., (1960) 40 ITR 38 (MAD) : (1960) TAX 13(3)-282. - COMMISSIONER OF INCOME TAX VS. AMARCHAND N. SHROFF , (1963) 48 ITR 59 (SC); - I.K. AGENCIES PVT. LTD. VS. COMMISSIONER OF INCOME OF WEALTH TA, KOL-III, JUDGEMENT DATED 11 TH MARCH, 2011. - TRIVENI ENGINEERING & INDUSTRIES LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX, ITAT, DELHI WT BENCH, (20 05) 93 TTJ (DEL) 806: (2005) 93 ITD 561. - CENTURY ENKA LTD. VS. DEPUTY COMMISSIONER OF . ON 14 FEBRUARY, 2006 : 2006 101 ITD 489 MUM, 2008 303 ITR 1 MUM; - PAMPASAR DISTILLERY LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, ITAT, KOLKATA E BENCH, (2007) 15 SOT 3 31 (KOL). - COMMISSIONER OF INCOME TAX VS. KURBAN HUSSAIN IBRA HIMJI MITHIBORWALA, 1973 CTR (SC) 454; (1971) 82 ITR 821 ( SC); - SPICE ENTERNTAIN LIMITED VS. C.I.T. I.T.A. NO. 475 & 476 OF 2011. ITA NOS. 545-550/DEL/2012 & C.O. NOS. 139-144/DEL/2012 7 7. CONSIDERING THE ABOVE, LD. COMMISSIONER OF INCOME TAX (A) HELD THAT IN VIEW OF THE DECISION OF THE COURTS AND TRIB UNAL PARTICULARLY THE HONBLE JURISDICTIONAL HIGH COURT AND TRIBUNAL AS D ISCUSSED ABOVE, HE AGREED WITH THE ASSESSEE THAT THE ASSESSMENT ON A CO MPANY WHICH HAS BEEN DISSOLVED /AMALGAMATED U/S 391 & 394 OF THE COMPANIES ACT, 1956 IS INVALID. HE OBSERVED THAT THERE IS NO PRO VISION OF THE I.T. ACT TO MAKE THE ASSESSMENT ON AN AMALGAMATING COMPANY / TRANSFER OR DISSOLVED COMPANY. EVEN THOUGH THE ASSESSEE COMPANY PARTICIPATED IN THE ASSESSMENT PROCEEDINGS. LD. COMMISSIONER O F INCOME TAX (A) CONCLUDED THAT THE ASSESSEE COMPANY STOOD DISSOLVED ON 28.9.2010 ON AMALGAMATION WITH M/S LIFE TIME BUILDCON P LTD. AND IN VIEW OF THIS HE ACCEPTED THE CONTENTION OF THE ASSESSEE THAT ASSESS MENT ORDER PASSED ON THE ASSESSEE COMPANY WAS A NULLITY. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION IN TH IS REGARD AND PERUSED THE RECORDS. WE FULLY CONCUR WITH THE FIN DING OF THE LD. COMMISSIONER OF INCOME TAX (A) THAT A COMPANY INCORP ORATED UNDER THE INDIAN COMPANIES ACT IS A JURISTIC PERSON. IT TAKES ITS BIRTH AND GETS LIFE WITH INCORPORATION AND IT DIES WITH THE D ISSOLUTION AS PER THE PROVISION OF THE COMPANIES ACT. ON AMALGAMATION, THE COMPANY SEIZES TO EXIST IN THE YES OF THE LAW. THUS, ASSESSMENT UPON A DISSOLVED COMPANY IS IMPERMISSIBLE AS THERE IS NO PROVISIONS IN INCOME TAX ACT ITA NOS. 545-550/DEL/2012 & C.O. NOS. 139-144/DEL/2012 8 TO MAKE AN ASSESSMENT THEREUPON. LD. COMMISSIONER OF INCOME TAX (A) IN OUR VIEW, HAS THEREFORE, RIGHTLY HELD THAT A SSESSMENT ON A COMPANY WHICH HAS BEEN DISSOLVED BY AMALGAMATION U/S. 391 AND 394 OF THE COMPANIES ACT, 1956 IS INVALID. ADMITTEDLY, ASSESSEE COMPANY IN THE PRESENT CASE STOOD DISSOLVED ON 28.9.2010 ON AMALGAMATION WITH M/S LIFE TIME BUILDCON P LTD. AND THE ASSESSMEN T ORDER IN THE PRESENT CASE WAS FRAMED ON 31.12.2010. HENCE, WE UPH OLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A). 9. IN VIEW OF THE ABOVE FINDING ON THE MAINTAINABILI TY OF THE ASSESSMENT ORDER ITSELF, WHICH HAS BEEN HELD TO BE A NULLITY, THE ISSUE RAISED IN THE OTHER GROUNDS OF APPEALS PREFERRED BY THE REVENUE AND CROSS OBJECTIONS RAISED BY THE ASSESSEE HAVE BECOME INFRUCTUOUS AND THEY DON TO NEED ADJUDICATION. 10. IN COMING TO THE ABOVE CONCLUSION, WE HAVE PLACE D RELIANCE UPON THE ORDER OF THIS TRIBUNAL IN IDENTICAL CIRCUMSTANCE S IN THE CASE OF MICRON STEELS PVT. LTD. IN I.T.A NO. 160 AND OTHERS V IDE ORDER DATED 21.9.2012. IN THIS CASE ALSO TRIBUNAL HAS HELD THAT THE ASSESSMENT ORDER HAS BECOME NULLITY, AS IT WAS FRAMED ON THE AMA LGAMATING COMPANY. ITA NOS. 545-550/DEL/2012 & C.O. NOS. 139-144/DEL/2012 9 11. CONSEQUENTLY APPEALS FILED BY THE REVENUE AND C ROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/2/2013. SD/- SD/- [ [[ [C.M. GARG C.M. GARG C.M. GARG C.M. GARG] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE:- 19/2/2013 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES