DCIT, New Delhi V. M/s. Vama Sundari Investment (Delhi) (P) Ltd., New Delhi

ITA 1187/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3119 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 04-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RINKU SINGH SENIOR
• Assessee Lawyers: ROHIT JAIN MS DEEPASHREE RAO
• Keywords: Scheme of amalgamation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND DR. M.L. MEENA, ACCOUNTANT MEMBER ITA NO.1187/DEL./2016 (ASSESSMENT YEAR : 2011-12) DCIT, CIRCLE 26 (1), VS. M/S. VAMA SUNDARI INVESTME NT (DELHI) NEW DELHI. P. LTD., (ERSTWHILE M/S. SLOCUM INVESTMENT (DELHI) PVT. LTD.), 44, FRIENDS COLONY (EAST), NEW DELHI 110 065. (PAN : AAMCS6198N) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ROHIT JAIN, ADVOCATE MS. DEEPASHREE RAO, CA REVENUE BY : MS. RINKU SINGH, SENIOR DR DATE OF HEARING : 12.02.2019 DATE OF ORDER : 28.02.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DCIT, CIRCLE 26 (1), NEW DELHI (HER EINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 04.11.2015 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-28, NEW DELHI QUA THE ASSESSMENT YEAR 2011-12 ON THE GROUNDS INTER ALIA T HAT :- ITA NO.1187/DEL./2016 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE ORDER PASSED BY LD.CIT(A) IS ERRONEO US AND THE LEARNED CIT(A) HAS ERRED IN QUASHING THE ASSESSMENT ORDER PASSED BY AO ON 20.03.2014 BY MAKING DISALLOWING OF RS.3,54,70,000/-. 2. THAT THE LD.CIT{A} HAS ERRED IN NOT APPRECIATIN G THAT ACCORDING TO OBSERVATIONS IN PARA IN CASE OF MARSHALL SONS & CO.(INDIA) P LTD. 223 ITR 809(SC), ASSESSMENT CAN BE MADE IN RESPECT OF AMALGAMATING COMPANIES AND THAT IF IT IS MADE IN THE NAME OF AN AMALGAMATING COMPANY IT SHOULD BE SET ASIDE FOLLOWI NG THE PRINCIPLE LAID DOWN IN KAMLESH KUMAR MEHTA VS.CIT (1977) 106 ITR 855 (CAL) AND ROSHAN LAL, (1982) 134 ITR 145(DEL). 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS INTO THE BUSI NESS OF MAKING OF INVESTMENT AND TO BUY, INVEST, UNDERWRITE SHARES AN D OTHER SECURITIES FOR LONG TERM. AO NOTICED DURING ASSESS MENT PROCEEDINGS THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.3,54,70,000/- ON ACCOUNT OF THE DONATION IN ITS PROFIT AND LOSS ACCOUNT, WHICH THE ASSESSEE HAS CLAIMED ELIGIBLE FO R DEDUCTION UNDER CHAPTER VI-A. HOWEVER, THE AO DISALLOWED THE ENTIRE DONATION AND MADE ADDITION THEREOF TO THE TOTAL INC OME OF THE ASSESSEE. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS QUASHED THE ASSESSMENT ORDER BY ALLOWING THE ITA NO.1187/DEL./2016 3 APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. LD. DR FOR THE REVENUE BY RELYING UPON THE DECIS ION RENDERED BY THE HONBLE HIGH COURT OF DELHI IN SKY LIGHT HOSPITALITY LLP VS. ACIT (2018) 405 ITR 296 CONTENDED THAT THE LD. CIT (A) HAS ERRED IN QUASHING THE ASSESSMEN T ORDER BECAUSE NOTICE ISSUED IN THE NAME OF ERSTWHILE PRIVATE LIMI TED COMPANY, DESPITE COMPANY CEASING TO EXIST, WOULD NOT INVALID ATE THE ASSESSMENT PROCEEDINGS AS THE SAME WAS NOT A JURISD ICTIONAL ERROR BUT AN IRREGULARITY AND PROCEDURAL / TECHNICAL LAPS E WHICH COULD BE CURED UNDER SECTION 292B OF THE INCOME-TAX ACT, 196 1 (FOR SHORT THE ACT). 6. HOWEVER, ON THE OTHER HAND HELD, LD. AR FOR THE ASSESSEE, TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. DR FOR THE REVENUE, CONTENTED THAT ASSESSMENT FRAMED IN THE NAME OF NON -EXISTENT COMPANY IS LIABLE TO BE QUASHED AND SUPPORTED THE I MPUGNED ORDER PASSED BY THE LD. CIT (A) BY RELYING UPON THE DECIS IONS RENDERED BY HONBLE SUPREME COURT IN CASE OF PCIT VS. BMA CAPFI N LTD. ITA NO.1187/DEL./2016 4 100 TAXMANN.COM 330, DECISIONS RENDERED BY HONBLE DELHI HIGH COURT IN CIT VS. SPICE ENTERTAINMENT LD. 247 CTR 500 AND CIT VS. DIMENSION APPARELS PVT. LTD. 370 ITR 288 AND ALSO THE DECISION RENDERED BY THE COORDINATE BENCH OF TH E TRIBUNAL IN CASE CITED AS ACIT VS. M/S. MAHAGUN REALTORS (P) LTD. IN ITA NO.3664/DEL/2012 ORDER DATED 16.07.2018 . 7. FROM THE FACTS AND CIRCUMSTANCES OF THE CASE, GR OUNDS RAISED BY THE ASSESSEE AND ARGUMENTS ADDRESSED BY THE PART IES TO THE APPEAL, THE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS:- AS TO WHETHER ASSESSMENT ORDER PASSED BY THE AO AGAINST NON-EXISTENT COMPANY IS SUSTAINABLE IN THE EYES OF LAW. 8. UNDISPUTEDLY, HONBLE HIGH COURT OF PUNJAB & HAR YANA HIGH COURT IN COMPANY PETITION NO.110 OF 2012 CONNE CTED WITH COMPANY PETITION NO.103 OF 2012 HAS PASSED THE SCHE ME OF AMALGAMATION BETWEEN SLOCUM INVESTMENTS (DELHI) PVT . LIMITED, SHIVKIRAN INVESTMENTS (DELHI) PVT. LTD. AND VAMA SU NDARI INVESTMENTS (DELHI) PVT. LIMITED, THE ASSESSEE IN T HIS CASE, AND THEIR RESPECTIVE SHAREHOLDERS VIDE ORDER DATED 31.0 1.2013 BY PASSING FOLLOWING ORDERS :- ITA NO.1187/DEL./2016 5 13. DISSOLUTION OF TRANSFEROR COMPANIES ON THE SCHEME BECOMING EFFECTIVE, THE TRANSFEROR COMPANY 1 AND THE TRANSFEROR COMPANY 2 SHALL STAND DISSOLVED WITHOUT BEING WOUND-UP. 9. IT IS ALSO NOT UNDERSTOOD THAT THE ASSESSEE INTI MATED THE AO VIDE LETTER DATED JULY 8, 2013 AVAILABLE AT PAGE 17 5 OF THE PAPER BOOK THAT, SLOCUM INVESTMENTS (DELHI) PVT. LTD. HAS BEEN MERG ED WITH VAMA SUNDARI INVESTMENTS (DELHI) PVT. LTD., TH E ASSESSEE IN THIS CASE, WITH EFFECT FROM 1 ST APRIL, 2012 VIDE ORDER DATED 31.01.2013 PASSED BY THE HONBLE HIGH COURT AND NAM E OF THE ASSESSEE COMPANY HAS SINCE BEEN STRUCK OFF FROM THE RECORD BY THE REGISTRAR OF COMPANIES. IT IS ALSO NOT IN DISPUTE THAT SUBSEQUENT TO THE SCHEME OF AMALGAMATION, THE ASSESSEE HAS ALR EADY REVISED INCOME TAX RETURN ON 28.032013 IN THE NAME OF SLOCU M INVESTMENTS (DELHI) PVT. LTD. WITH REVISED COMPUTAT ION OF INCOME, AVAILABLE AT PAGES 41 TO 44 OF THE PAPER BOOK. 10. WHEN WE EXAMINE AFORESAID UNDISPUTED FACTS AND CIRCUMSTANCES OF THIS CASE IN THE LIGHT OF THE DECI SION RENDERED BY HONBLE SUPREME COURT IN THE CASE CITED PCIT VS. BMA CAPFIN LTD . (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT WHEN AO HAS BEEN DULY MADE AWARE OF THE FACT OF MERGER OF THE ASSESS EE COMPANY WITH ANOTHER COMPANY, NAMELY, SLOCUM INVESTMENTS (D ELHI) PVT. ITA NO.1187/DEL./2016 6 LTD., HE WAS NOT WITHIN HIS JURISDICTION TO FRAME T HE ASSESSMENT IN THE NAME OF NON-EXISTENT ENTITY, RATHER THE AO HAS WAS REQUIRED TO FRAME THE ASSESSMENT IN THE NAME OF AMALGAMATED OR MERGED ENTITY WHICH IS A NULLITY. FOR READY PERUSAL, OPERATIVE PA RT OF THE FINDINGS RETURNED BY HONBLE SUPREME COURT IS REPRODUCED AS UNDER :- SECTION 143 OF THE INCOME-TAX ACT, 1961 - ASSESSME NT - GENERAL (AMALGAMATION) - ASSESSMENT YEAR 2012-13 IN COURSE OF ASSESSMENT, ASSESSEE-COMPANY GOT MERGE D WITH ANOTHER COMPANY - APPARENTLY, ASSESSING OFFICE R TOOK NOTE OF SAID DEVELOPMENT BUT INSTEAD OF COMPLE TING ASSESSMENT IN HANDS AND IN NAME OF AMALGAMATED OR MERGED ENTITY, HE PROCEEDED TO COMPLETE SEPARATE ASSESSMENT IN NAME OF ASSESSEE WHO BY THEN HAD BECOME A NON-EXISTENT ENTITY - COMMISSIONER (APPEAL S) AS WELL AS TRIBUNAL ACCEPTED ASSESSEES PLEA THAT ASSESSMENT SO COMPLETED WAS A NULLITY - HIGH COURT UPHELD ORDER PASSED BY THE TRIBUNAL WHETHER ON FACTS, SLP FILED AGAINST DECISION OF HIGH COURT WAS TO BE DISMISSED HELD., YES [PARA 2] [IN FAVOUR OF ASSESSEE] 11. MOREOVER, THE SCHEME OF AMALGAMATION ITSELF TAK ES CARE OF ALL THE CONSEQUENCES OF THE ERSTWHILE COMPANY. SIN CE THE ASSESSEE COMPANY CEASED TO BE IN EXISTENCE AND ITS NAME GOT STRUCK OF FROM THE ROLLS OF REGISTRAR OF COMPANIES, ASSESSMENT FRA MED AGAINST IT BY THE AO VIDE ORDER DATED 20.03.2014 IS NOT SUSTAI NABLE IN THE EYES OF LAW, BEING A NULLITY. 12. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOUT, THE J UDGMENT CITED BY LD. DR FOR THE REVENUE RENDERED BY HONBLE DELHI HIGH COURT IN ITA NO.1187/DEL./2016 7 CASE OF SKY LIGHT HOSPITALITY LLP VS. ACIT (SUPRA) IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CA SE. CONSEQUENTLY, WE FIND NO ILLEGALITY OR PERVERSITY I N THE IMPUGNED ORDER PASSED BY THE LD. CIT (A), HENCE INSTANT APPE AL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 28 TH DAY OF FEBRUARY, 2019. SD/- SD/- (DR. M.L. MEENA) (KULDIP SIN GH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 28 TH DAY OF FEBRUARY, 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-28, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.