DCIT, CC-I, KOLKTA, Kolkata V. Visa Steel Ltd., Kolkata

ITA 1486/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1568 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-06-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 03-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P JHUNJHUNWALA
• Keywords: Reassessment proceedings
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SRI A.T.VARKEY, JM & SHRI M.BALAG ANESH, AM ] I.T.A NOS. 1486/KOL/2 014 ASSESSMENT YEAR : 2003-0 4 D.C.I.T., CENTRAL CIRCLE-I, -VS.- VISA EN ERGY RESOURCES LTD.(SINCE KOLKATA MERGED WITH VISA INDUSTRIES LTD.A ND NOW KNOWN AS VISA STEEL LTD.) KOLKATA [PAN : AAACV 8651 P] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : NONE FOR THE RESPONDENT : SHRI P.JHUNJHUNWALA, AD VOCATE DATE OF HEARING : 15.06.2017. DATE OF PRONOUNCEMENT : 07.07.2017 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL OF THE REVENUE ARISES OUT OF THE ORD ER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL-III , KOLKATA [ IN SH ORT THE LD CITA] IN APPEAL NO. 72/CC-I/CIT(A)C-III/12-13/KOL DATED 17.04.2014 AGAI NST THE ORDER PASSED BY THE D.C.I.T., CIRCLE-10, KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 147/143(3) OF THE ACT DATED 26.12.2008 FOR THE ASST YEAR 2003-04. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD CITA WAS JUSTIFIED IN ANNULLING THE ASSESSMENT FRAMED IN THE HANDS OF THE AMALGAMATING COMPANY, IGNORING THE FACT OF MERGER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT M/S VISA E NERGY RESOURCES LTD GOT AMALGAMATED WITH VISA INDUSTRIES LTD WITH EFFECT FROM 1.4.2004 VIDE APPROVAL OF THE HONBLE HIGH COURT OF ORISSA IN ORDER DATED 15.10.2004. THIS HA D HAPPENED MANY YEARS PRIOR TO THE 2 ITA NOS. 1486 /KOL/2014 NOW KNOWN AS VISA STEEL LTD. A.YR.2003-04 2 INITIATION OF THE REASSESSMENT PROCEEDINGS FOR THE ASST YEAR 2003-04. PURSUANT TO THE AMALGAMATION, THE ASSESSEE COMPANY, BEING THE AMALG AMATING COMPANY, CEASED TO EXIST. 4. THE ASSESSEE FOR THE ASST YEAR 2003-04 FILED I TS RETURN OF INCOME ON 1.12.2003 DECLARING TOTAL INCOME OF RS 91,12,113/- AND ASSESS MENT WAS FRAMED U/S 143(3) OF THE ACT ON 21.3.2006 DETERMINING THE TOTAL INCOME AT RS 91,21,284/-. LATER THE LEARNED COMMISSIONER OF INCOME TAX (IN SHORT LD CIT) INITIA TED PROCEEDINGS U/S 263 OF THE ACT VIDE ORDER DATED 5.11.2007 BY DIRECTING THE LD AO T O MAKE FRESH ASSESSMENT AFTER EXAMINING THE ISSUES RAISED BY THE LD CIT IN THE RE VISION PROCEEDINGS. PURSUANT TO THE SAID DIRECTION OF THE LD CIT, THE LD AO PASSED THE ORDER U/S 263 / 143(3) OF THE ACT DATED 26.12.2008 BEING THE ORDER UNDER APPEAL WHEREIN A S UM OF RS 1,06,82,191/- WAS ADDED ON ACCOUNT OF UNDERVALUATION OF CLOSING STOCK. THI S ASSESSMENT WAS FRAMED IN THE NAME OF VISA ENERGY RESOURCES LTD (I.E THE AMALGAMATIN G COMPANY) ON 26.12.2008, ON WHICH DATE, THIS COMPANY CEASED TO EXIST PURSUANT T O AMALGAMATION. THE LD CITA ANNULLED THE ENTIRE ASSESSMENT SINCE THE SAME WAS F RAMED ON THE COMPANY WHICH CEASED TO EXIST. AGGRIEVED, THE REVENUE IS IN APPEAL BEF ORE US ON THE FOLLOWING GROUNDS:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) WAS JUSTIFIED THAT ASSESSMENT ORDER WAS AB-INITIO VOID AS THERE WAS NO COMPANY IN THE NAME OF M/S. VISA ENERGY RESOURCES LTD. AT THE TIME OF ASSESSMENT. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN APPRECIATING THE FACT THAT MERGER IS ANALOGOUS TO S UCCESSION AND THEREFORE, PRIOR TO THE DATE OF MERGER, ASSESSMENT OF THE AMALGAMATING COMPANY BE DONE IN HANDS OF THE AMALGAMATING COMPANY AS HELD BY THE ALLAHABAD H IGH COURT IN THE CASE OF CIT -VS.- MOTOR SALES (2004). 3. THE APPELLANT CRAVES THE LEAVE TO MAKE ANY ADDIT ION, ALTERATION, MODIFICATION AND REMODELING OR WITHDRAWING OF THE GROUNDS. 5. WE HAVE HEARD THE LD AR. NONE APPEARED ON BEHAL F OF THE REVENUE WHEN THE CASES WERE CALLED FOR HEARING. THE REVENUE HAD NOT EVEN SOUGHT AN ADJOURNMENT BEFORE US ON THE DATE OF HEARING. HENCE WE PROCEED TO DISPOSE OFF THIS APPEAL AFTER HEARING THE LD AR. THE FACTS STATED HEREINABOVE REMAIN UNDISPUTE D AND HENCE THE SAME ARE NOT 3 ITA NOS. 1486 /KOL/2014 NOW KNOWN AS VISA STEEL LTD. A.YR.2003-04 3 REITERATED FOR THE SAKE OF BREVITY. WE FIND THAT TH E RE-ASSESSMENT FOR THE ASST YEAR 2003- 04 WAS FRAMED ON A NON-EXISTENT COMPANY. THE AMALG AMATED COMPANY VISA INDUSTRIES LTD (NOW VISA STEEL LTD) HAD COME INTO EXISTENCE WI TH EFFECT FROM 1.4.2004 VIDE COURT ORDER DATED 15.10.2004 WHICH WAS MUCH PRIOR TO EVEN THE INITIATION OF RE-ASSESSMENT PROCEEDINGS. HENCE THE LD AO OUGHT TO HAVE FRAMED THE RE-ASSESSMENT IN THE NAME OF AMALGAMATED COMPANY I.E VISA INDUSTRIES LTD (NOW VI SA STEEL LTD). THE FRAMING OF RE- ASSESSMENT IN THE NAME OF THE NON-EXISTENT AMALGAMA TING COMPANY IS BAD IN LAW AND VOID ABINITIO. HENCE WE HOLD THAT THE LD CITA HAD RIGHTLY ANNULLED THE ASSESSMENT FOR THE ASST YEAR 2003-04. ACCORDINGLY THE GROUNDS RAI SED BY THE REVENUE ARE DISMISSED FOR THE ASST YEAR 2003-04. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 07.07.2017 SD/- SD/- [A.T.VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 07.07.2017 [RG PS] COPY OF THE ORDER FORWARDED TO: 1.VISA ENERGY RESOURCES LTD. (MERGED WITH VISA INDU STRIES DTD. 25.20.2004) NOW KNOWN AS VISA STEEL LTD., VISA HOUSE, 8/10, ALIPORE ROAD, KOLKATA-700027. 2. D .C.I.T., CENTRAL CIRCLE-I, KOLKATA. . 3..C.I.T.(A)-CENTRAL-III, KOLKATA 4. C.I.T.-CENT RAL-III, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S 4 ITA NOS. 1486 /KOL/2014 NOW KNOWN AS VISA STEEL LTD. A.YR.2003-04 4