EKVIRA HOTELS PRIVATE LIMITED,MUMBAI V. ACIT 6(2)(2), MUMBAI, MUMBAI

ITA 4453/MUM/2025

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Ekvira Hotels Private Limited appealed against the reassessment order for the assessment year 2012-13, which was passed by the National Faceless Appeal Centre (NFAC), Delhi. The company, having been struck off and dissolved by the Registrar of Companies in 2017, challenged the validity of the reassessment proceedings initiated under section 147 and section 144 of the Income-tax Act, 1961. The Tribunal found that the reassessment was conducted against a non-existent company and that the orders issued were unsigned and undated, rendering them non est in law. Additionally, the Tribunal noted that the capital gains tax applied pertained to a transaction in a different financial year than assessed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775919 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 10-07-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: VIJAY SHINDE
• Keywords: Condonation of delay; Capital asset; Reasonable cause; Reassessment proceedings; Capital Gains
• Section: 147; 148; 144

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.4453/Mum/2025 (Assessment Year :2012-13) Ekvira Hotels Private Limited (struck off and disallowed since 23/06/2017) 15th Yusuf Palace L.J.Road, Mahim Mumbai- 400 016 Vs. ACIT 6(2)(3), Mumbai PAN/GIR No.AAACE2878B (Appellant) .. (Respondent) Assessee by Shri Vijay Shinde, CA Revenue by Shri Hemanshu Joshi, SR.DR Date of Hearing 21/08/2025 Date of Pronouncement 09/09/2025 आदेश / O R D E R PER AMIT SHUKLA (J.M): The present appeal is filed by the assessee against the order dated 17/03/2025 passed by the National Faceless Appeal Centre (NFAC), Delhi, arising out of the reassessment proceedings framed under section 147 read with section 144 of the Income-tax Act, 1961 (“the Act”) for the assessment year 2012–13. Printed from counselvise.com ITA No.4453/Mum/2025 Ekvira Hotels Private Limited 2 2. At the threshold, it is noted that the appeal has been filed belatedly with a delay of 55 days. The assessee has moved a petition for condonation of delay accompanied by an affidavit. It is explained therein that though the order of the learned CIT(A) was passed on 17/03/2025, it was made available on the income-tax portal only on 17/08/2025. The appellant company had already been struck off by the Registrar of Companies w.e.f. 23/06/2017 owing to cessation of operations, and the erstwhile director, being advanced in age and suffering from health ailments, faced genuine difficulties in collating records to file the appeal. It is also brought to our notice that there was an extraordinary delay of nearly seven years on the part of the first appellate authority itself in disposing of the appeal. 3. Having considered the circumstances and the supporting medical documents, we are satisfied that there existed a reasonable cause preventing timely filing. Accordingly, in the larger interest of justice, the delay of 55 days is condoned and the appeal is admitted for adjudication. 4. The assessee has raised multiple grounds challenging, firstly, the very validity of the reassessment order as being passed against a non-existent company that was already struck off from the register of companies, secondly, the assessment order and demand notice being unsigned and undated rendering the entire proceedings non est in law, and thirdly, the addition of ₹1,12,50,000/- towards alleged capital gains, which, according to the assessee, pertains to a Printed from counselvise.com ITA No.4453/Mum/2025 Ekvira Hotels Private Limited 3 transaction executed in F.Y. 2010–11, and hence taxable, if at all, only in A.Y. 2011–12 and not in the impugned year. 5. The assessee was engaged in the business of hotel operations since 1997. Its name was subsequently struck off from the records of the Registrar of Companies and the company was formally dissolved on 23/06/2017 under section 248(5) of the Companies Act, 2013. 6. It is undisputed that the assessee did not file a return of income for A.Y. 2012–13. Based on information from the Annual Information Report (AIR) that the assessee had sold immovable property valued at ₹1,12,50,000/- during the relevant year, the Assessing Officer recorded reasons to believe that income chargeable to tax had escaped assessment and accordingly issued notice under section 148 dated 27/03/2018. 7. However, all notices issued thereafter were returned unserved with postal remarks of “left”. Electronic notices also remained unresponded. Consequently, the Assessing Officer framed reassessment ex parte under section 144, treating the entire value of the property, i.e., ₹1.12 crore, as undisclosed income. The learned CIT(A) too sustained the addition, again ex parte, without adjudicating on merits. 8. Before us, the learned counsel for the assessee submitted that since the company was struck off and dissolved on 23/06/2017, no valid notice under section 148 could have been issued on 27/03/2018. An assessment framed on a non-existent entity is void ab initio as per the Printed from counselvise.com ITA No.4453/Mum/2025 Ekvira Hotels Private Limited 4 settled law by Hon’ble Supreme Court and High Courts. He further pointed out that the reassessment order is neither physically nor digitally signed, nor does it bear a date. The accompanying demand notice also lacks signature, except for a typed date. Such an order, lacking authentication, is a nullity in the eyes of law. He also argued that the property in question was sold vide sale deed executed on 21/01/2011, i.e., in F.Y. 2010–11, and the entire consideration was received in that year itself. Therefore, the capital gains, if any, arose only in A.Y. 2011–12 and not in the impugned year. The AIR-based reopening incorrectly assumed the transaction as pertaining to A.Y. 2012–13. In support of his contentions, learned counsel relied upon several judicial pronouncements, the details of which have been placed on record, however, for the sake of brevity, they are not being reproduced herein. 9. The learned Sr. DR fairly submitted that since the proceedings were ex parte before both lower authorities, the matter, if deemed fit, could be restored back to the file of the learned CIT(A) for fresh adjudication after giving due opportunity to the assessee. 10. We have carefully considered the rival submissions, perused the record, and examined the impugned assessment order. At the very threshold, one striking feature stares us in the face: the assessment order placed before us does not bear the signature of the Assessing Officer, neither in physical ink nor through digital authentication. The demand notice, too, is devoid of any such attestation, except for a mechanically typed date. It is a fundamental principle that an order derives Printed from counselvise.com ITA No.4453/Mum/2025 Ekvira Hotels Private Limited 5 its very existence and legal sanctity from the signature of the authority who purports to pass it. The act of signing is not a mere formality but a solemn affirmation of authorship, accountability, and authority. In the absence of such authentication, the so-called order remains an unsigned draft, incapable of assuming the character of a binding or enforceable assessment. The law is clear that an unsigned order is no order in the eye of law and it is as if no order has ever been passed. In the course of hearing, we specifically inquired from the learned Departmental Representative, and he candidly did not dispute this factual aspect of non- signature. Once this fatal flaw is admitted, the inescapable conclusion is that the reassessment order is incurably void and non est. On this ground alone, the entire proceedings collapse at inception and are liable to be quashed. 11. It is also a matter of record that the assessee company stood struck off and dissolved by the Registrar of Companies with effect from 23/06/2017, much prior to the issuance of notice under section 148 on 27/03/2018. Once a company is dissolved, it ceases to have a juristic personality in the eyes of law and becomes a non-existent entity. Any proceedings initiated thereafter in its name are, in essence, directed against a dead person and therefore void ab initio. The Hon’ble Supreme Court and various High Courts have consistently held that framing of an assessment on a non- existent entity is a jurisdictional defect which goes to the root of the matter and cannot be cured even by recourse to the saving provisions of section 292B. On this count also, Printed from counselvise.com ITA No.4453/Mum/2025 Ekvira Hotels Private Limited 6 therefore, the assessment order can be reckoned as invalid in law. However, having already held in the preceding paragraph that the reassessment order itself suffers from a fatal infirmity for want of authentication inasmuch as it is unsigned and undated, we refrain from adjudicating this ground separately. Suffice it to observe that the order is vitiated on multiple fronts, each of which independently renders it unsustainable. 12. Even assuming for a moment that the assessment was otherwise valid, the addition made does not withstand the scrutiny of facts. The material placed before us demonstrates beyond cavil that the sale deed for the property in question was executed on 21/01/2011. The consideration was also received during the financial year 2010–11. It is trite law that the chargeability of capital gains arises in the year in which the transfer is effected within the meaning of section 2(47) of the Act. Since the transfer was completed in January 2011, the relevant assessment year would be 2011–12. There was therefore no occasion for taxing the same in A.Y. 2012–13. The entire edifice of addition of ₹1,12,50,000/- thus collapses on the anvil of basic facts and statutory prescription. 13. We are therefore confronted with a situation where three incurable defects coalesce. Firstly, the order is unsigned and hence void. Secondly, the proceedings have been initiated and concluded against an entity which had ceased to exist. Thirdly, the addition is made in an assessment year wholly unconnected with the transaction. Each of these lapses, by itself, would be sufficient to nullify the assessment. When taken together, they leave no manner of doubt that the Printed from counselvise.com ITA No.4453/Mum/2025 Ekvira Hotels Private Limited 7 impugned order is a legal nullity, incapable of being sustained either in fact or in law. 14. In view of the aforesaid discussion, we unhesitatingly hold that the reassessment order dated 12/12/2018 is void ab initio and deserves to be quashed in its entirety. Once the very foundation of the proceedings is struck down, the superstructure of addition automatically falls. Consequently, the addition of ₹1,12,50,000/-, premised as it is on a misconceived appreciation of facts and law, does not survive for consideration. 15. In the result, the appeal of the assessee is allowed Order pronounced on 9th September, 2025. Sd/- (ARUN KHODPIA) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 09/09/2025 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Printed from counselvise.com "