SIEMENS LTD, MUMBAI V. ASST CIT 8(2)(1), MUMBAI

ITA 1824/MUM/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4447 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2010-2011
• Appeal Filed On: 27-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHRI STOPER REBELLO
• Keywords: Transfer pricing; Validity of assessment; Scheme of amalgamation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER ITA NO.1824/MUM/2015(A.Y.2010-11) C.O. NO.67/MUM/2015 (ARISING OUT OF ITA NO.1667/MUM/2015( A.Y.2010-11) SIEMENS LIMITED, (SUCCESSOR IN INTEREST TO SIEMENS VIA METALS TECHNOLOGIES PRIVATE LIMITED) 130, PANDURANG BUDHKAR MARG, WORLI, MUMBAI 400 018. PAN: AABCV 8348L ...... APPELLANT VS. THE ACIT 8(2)(1), MUMBAI ..... RESPONDENT ITA NO.1667/MUM/2015(A.Y.2010-11) THE ACIT 8(2)(1), MUMBAI .... APPELLANT VS. SIEMENS LIMITED, (SUCCESSOR IN INTEREST TO SIEMENS VIA METALS TECHNOLOGIES PRIVATE LIMITED) 130, PANDURANG BUDHKAR MARG, WORLI, MUMBAI 400 018. PAN: AABCV 8348L ASSESSEE BY : S/SHRI NITESH JOSHI & CHRI STOPER REBELLO REVENUE BY : SHRI UODAL RAJ SING H 2 ITA NO.1824/MUM/2015(A.Y.2010-11) C.O. NO.67/MUM/2015 ITA NO.1667/MUM/2015(A.Y.2010-11) DATE OF HEARING : 16/01/2020 DATE OF PRONOUNCEMENT : 21/02/2020 ORDER PER VIKAS AWASTHY, JM: THESE CROSS APPEALS BY THE ASSESSEE AND THE REVENU E ARE DIRECTED AGAINST THE ASSESSMENT ORDER DATED 20/01/2015 PAS SED UNDER SECTION 143(3) R.W.S. 144C(13) OF THE INCOME TAX ACT, 1961 (IN SH ORT THE ACT). THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS ON THE APPEAL OF REVENUE. 2. SHRI NITESH JOSHI APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED AT THE OUTSET THAT ASSESSMENT IN THE CASE OF THE ASSESSEE IS BAD IN LAW AS THE ASSESSMENT HAS BEEN MADE IN THE NAME OF NON-EXISTIN G ENTITY. GIVING CHRONOLOGY OF EVENTS, THE LD. AUTHORIZED REPRESENTA TIVE FOR THE ASSESSEE SUBMITTED THAT SIEMENS VAI METAL TECHNOLOGIES PVT . LTD. (IN SHORT SVAI) WAS MERGED WITH SIEMENS LIMITED BY THE ORDER OF HON' BLE BOMBAY HIGH COURT DATED 17/08/2012 W.E.F. 01/10/2011. IMMEDIATELY AF TER RECEIPT OF THE ORDER APPROVING THE SCHEME OF AMALGAMATION BY HON'BLE BO MBAY HIGH COURT, THE ASSESSEE VIDE COMMUNICATION DATED 18/10/2012 INFORM ED THE DEPARTMENT REGARDING MERGER OF THE ASSESSEE WITH SIEMENS LIMIT ED. THE ASSESSEE VIDE ANOTHER COMMUNICATION DATED 06/05/2013 INFORMED THE ASSESSING OFFICER ABOUT AMALGAMATION OF ERSTWHILE SVAI WITH SIEMENS L IMITED. THE ASSESSEE VIDE SAME COMMUNICATION REQUESTED FOR THE TRANSFER OF JURISDICTION OF THE CASE FROM ASSESSING OFFICER AT KOLKATA TO ASSESSING OFFI CER HAVING JURISDICTION OVER SIEMENS LIMITED AT MUMBAI. THE LD. AUTHORIZED REPR ESENTATIVE FOR THE 3 ITA NO.1824/MUM/2015(A.Y.2010-11) C.O. NO.67/MUM/2015 ITA NO.1667/MUM/2015(A.Y.2010-11) ASSESSEE FURTHER POINTED THAT DURING THE PROCEEDING S BEFORE TPO, THE ASSESSEE VIDE COMMUNICATION DATED 30/05/2013 AND 23/07/2013 INFORMED THE FACT OF MERGER OF SVAI WITH SIEMENS LIMITED WITH A SPECIFIC INFORMATION THAT W.E.F. 01/10/2011, SVAI HAS NO LEGAL EXISTENCE. THE LD. AU THORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER REFERRED TO COMMUNICATION DATE D 05/07/2013 VIDE WHICH THE ASSESSEE HAD INFORMED THE CIT-I, KOLKATA ABOUT MERGER OF SVAI WITH SIEMENS LIMITED. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED THAT DESPITE SEVERAL COMMUNICATIONS FROM THE ASSES SEE INFORMING THE DEPARTMENT ABOUT THE MERGER OF SVAI WITH SIEMENS LI MITED, THE ASSESSING OFFICER AT MUMBAI ISSUED NOTICE UNDER SECTION 142( 1) R.W.S. 129 ON 16/12/2013 IN THE NAME OF NON-EXISTING ENTITY I.E. SVAI. THE LD.AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE CONTENDED THAT IT I S A MATTER OF RECORD THAT JURISDICTION OF THE ASSESSING OFFICER WAS TRANSFERR ED FROM KOLKATA TO MUMBAI CONSEQUENT TO MERGER/AMALGAMATION OF SVAI WITH SIEM ENS LIMITED. 2.1 THE TPO PASSED THE ORDER UNDER SECTION 92CA(3) OF THE ACT IN THE NAME OF NON-EXISTING ENTITY ON 27/01/2014. THEREAFTER, T HE ASSESSING OFFICER PASSED THE DRAFT ASSESSMENT ORDER ON 14/03/2014 IN THE NAM E OF SVAI I.E. THE NON- EXISTENT ENTITY. THE DRP, WHILE DISPOSING OF THE O BJECTIONS OF THE ASSESSEE VIDE DIRECTION DATED 19/02/2014 IN THE TITLE AGAIN MENTI ONED THE NAME OF NON- EXISTENT ENTITY I.E. SVAI. HOWEVER, THE DRP MENTIO NED IN THE TITLE THE NAME OF THE SUCCESSOR I.E. SIEMENS LIMITED. THEREAFTER, TH E FINAL ASSESSMENT ORDER WAS PASSED IN THE NAME OF NON-EXISTENT ENTITY I.E. SVAI . THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT IT IS A WELL SETTLED LAW THAT ASSESSMENT FRAMED IN THE NAME OF NON-EXISTENT ENTIT Y IS VOID-AB-INITIO. IN SUPPORT OF HIS CONTENTIONS, THE LD.AUTHORIZED REPRE SENTATIVE OF THE ASSESSEE 4 ITA NO.1824/MUM/2015(A.Y.2010-11) C.O. NO.67/MUM/2015 ITA NO.1667/MUM/2015(A.Y.2010-11) PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF PCIT VS. MARUTI SUZUKI INDIA LTD. REPORTED AS 41 6 ITR 613(SC) THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FURTHE R SUBMITTED THAT THE TRIBUNAL IN THE CASE OF GROUP CONCERN I.E. SIEMENS LIMITED VS. ACIT IN ITA NO.3296/MUM/2015 FOR ASSESSMENT YEAR 2003-04 DECIDE D ON 01/03/2019 HAS QUASHED THE ASSESSMENT ORDER ON SIMILAR SET OF FAC TS, WHERE THE ASSESSMENT WAS FRAMED IN THE NAME OF AMALGAMATING COMPANY WHIC H WAS NON-EXISTENT ON THE DATE OF PASSING OF THE ASSESSMENT ORDER. THE L D.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FURTHER POINTED THAT THE TRIBUNAL IN THE CASE OF ANOTHER SISTER CONCERN OF THE ASSESSEE I.E. M/S. SIEMENS POWER EN GINEERING PVT. LTD. VS. ACIT, ITA NO.1772/MUM/2015 ASSESSMENT YEAR 2010-11 DECIDE D ON 15/10/2019 TAKING A SIMILAR VIEW QUASHED THE ASSESSMENT MADE IN THE NAME OF NON- EXISTING ENTITY. 3. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT ADMITTEDLY THE SUCCESSOR OF SVAI THE PRESENT ASS ESSEE PARTICIPATED IN ASSESSMENT PROCEEDINGS AND TRANSFER PRICING PROCEE DINGS, HOWEVER, THIS DOES NOT ESTOP THE ASSESSEE FROM RAISING LEGAL OBJEC TION CHALLENGING VALIDITY OF ASSESSMENT ORDER FRAMED IN THE NAME OF A NON-EXIST ENT ENTITY. IN SUPPORT OF HIS ARGUMENTS LD.AUTHORIZED REPRESENTATIVE OF THE A SSESSEE AGAIN PLACED RELIANCE ON THE DECISION RENDERED IN THE CASE OF P CIT V. MARUTI SUZIKI INDIA LTD. (SUPRA) 4. PER CONTRA, SHRI UODAL RAJ SINGH, REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE VALIDITY OF ASSESSMENT ORDE R. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT JURISDICTION OF THE CASE WAS TRANSFERRED FROM 5 ITA NO.1824/MUM/2015(A.Y.2010-11) C.O. NO.67/MUM/2015 ITA NO.1667/MUM/2015(A.Y.2010-11) KOLKATTA TO MUMBAI. THE AUTHORITIES IN MUMBAI WERE NEVER INFORMED BY THE ASSESSEE REGARDING THE FACT OF AMALGAMATION AND MER GER OF SVAI WITH SIEMENS LIMITED. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SIDE S ON THE LEGAL ISSUE OF ASSESSMENT MADE IN THE NAME OF NON-EXISTENT ENTIT Y. IT IS AN UNDISPUTED FACT THAT SVAI WAS AMALGAMATED WITH SIEMENS LIMITED IN T HE SCHEME OF AMALGAMATION APPROVED BY HON'BLE BOMBAY HIGH COURT VIDE ORDER DATED 17/08/2012 W.E.F. 01/10/2011. VARIOUS COMMUNICATIO NS BY THE ASSESSEE TO THE DEPARTMENT HAVE BEEN PLACED ON RECORD TO SHOW T HAT ASSESSEE FROM TIME TO TIME HAS BEEN INFORMING THE DEPARTMENT REGARDING THE FACT OF AMALGAMATION OF SVAI WITH SIEMENS LIMITED. ONE SUC H COMMUNICATION DATED 06/06/2013 IS REPRODUCED HEREIN BELOW:- MAY 05. 2013 THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2, AAYAKAR BHAWAN P-7 CHOWRINGHEE SQUARE KOLKATA 700 069 REF: SIEMENS VAI METALS TECHNOLOGIES PRIVATE LIMITE D ('THE COMPANY') (NOW MERGED WITH SIEMENS LIMITED) PAN: AABCV8348L SUB.: INTIMATION REGARDING MERGER OF THE COMPANY WI TH SIEMENS LIMITED AND REQUEST TO TRANSFER PRESENT JURISDICTION TO THE JUR ISDICTION OF SIEMENS LIMITED DEAR MADAM, WITH REFERENCE TO THE SUBJECT WE WOULD LIKE TO STAT E THAT THE COMPANY IS ASSESSABLE UNDER YOUR CIRCLE WITH PERMANENT ACCOUN T NUMBER OF AABCV8348L WE HAD FILED A LETTER ON 19.10-2012 MENTIONING THE COMPANY IS AMALGAMATED WITH M/S. SIEMENS LIMITED HAVING REGISTERED OFFICE AT 130, PANDURANG BUDHKAR MARG, WORLI, MUMBAI -400013 BY VIRTUE OF ORDER DATED 17.08.2012 6 ITA NO.1824/MUM/2015(A.Y.2010-11) C.O. NO.67/MUM/2015 ITA NO.1667/MUM/2015(A.Y.2010-11) OF HON'BLE BOMBAY HIGH COURT IN THE MATTER OF ''COM PANY SCHEME PETITION NO. 234 OF 2012 RELATED TO AMALGAMATION OF SIEMENS VAI METALS TECHNOLOGIES PRIVATE LIMITED WITH 'SIEMENS LIMITED' AND THUS WE CEASED TO EXIST AS AN INDEPENDENT LEGAL ENTITY FROM THE SALE DATE AND ARE NOW PART OF SIEMENS LIMITED WITH APPOINTED DATE AS OCTOBER 1, 2 011. THE COPY OF THE SAID LETTER HAS BEEN ATTACHED FOR YOUR REFERENCE. WE REQUEST YOUR GOODSELF TO KINDLY TRANSFER OUR C ASE FROM YOUR JURISDICTION TO THE JURISDICTION OF SIEMENS LIMITED PAN AAACSC764L UNDER THE JURISDICTION OF THE COMMISSIONER OF INCOME-TAX RANGE 7 MUMBAI TH ROUGH THE ADDITIONAL COMMISSIONER OF INCOME-LAX. RANGE 7(2), MUMBAI THR OUGH THE DEPUTY COMMISSIONER OF INCOME-TAX RANGE 7(2), MUMBAI. IN VIEW OF THE ABOVE, WE REQUEST YOUR GOOD SELF TG O TRANSFER ALL THE PENDING MATTERS RELATING TO THE COMPANY TO ABOVE MENTIONED JURISDICTION OF SIEMENS LIMITED SHOULD YOUR GOOD SELF REQUIRE ANY FURTHER INFORMATI ON /DOCUMENTATION WE SHALL BE GLAD TO SUBMIT THE SAME. THANKING YOU YOURS FAITHFULLY SIEMENS LTD. (SUCCESSOR IN INTEREST TO SIEMENS VAI METALS TECHNO LOGIES PRIVATE LIMITED) SD/- AUTHORIZED SIGNATORY A PERUSAL OF THE ABOVE COMMUNICATION FROM THE ASSES SEE TO THE ASSESSING OFFICER AT KOLKATA CLEARLY INDICATES THAT THE ASSE SSEE HAD INFORMED ABOUT THE FACT OF AMALGAMATION AND ALSO THE FACT THAT CONSEQU ENT TO APPROVAL OF SCHEME OF AMALGAMATION BY HON'BLE BOMBAY HIGH COURT , SVAI HAS CEASED TO EXIST AS AN INDEPENDENT LEGAL ENTITY W.E.F. 01/10/ 2011. FURTHER, THE ASSESSEE HAD REQUESTED TRANSFER OF JURISDICTION FROM KOLKOTT A TO MUMBAI UPON AMALGAMATION WITH SIEMENS LTD. THEREAFTER, WE FIND THAT THE ASSESSEE EVEN INFORMED THE TPO VIDE COMMUNICATION DATED 30/05/201 3 AND 23/07/2013 REGARDING THE FACT OF AMALGAMATION. THE ASSESSEE D ISCHARGED ITS OBLIGATION OF INFORMING THE DEPARTMENT ABOUT THE FACT OF AMALGAMA TION AND SVAI LOOSING ITS 7 ITA NO.1824/MUM/2015(A.Y.2010-11) C.O. NO.67/MUM/2015 ITA NO.1667/MUM/2015(A.Y.2010-11) INDEPENDENT EXISTENCE. IT IS EVIDENT FROM THE RECO RDS THAT IT IS COMPLETE FAILURE ON THE PART OF DEPARTMENT TO HAVE NOT TAK EN COGNISANCE OF AMALGAMATION OF SVAI WITH SIEMENS LIMITED. IT WOU LD BE RELEVANT TO MENTION HERE THAT IT IS CONSEQUENT TO AMALGAMATION OF SV AI WITH SIEMENS LIMITED THAT THE JURISDICTION WAS CHANGED FROM KOLKATA TO MUMBAI . THE REASON OF CHANGE IN JURISDICTION WAS AMALGAMATION OF SVAI WITH SIEMENS LIMITED. IT IS SLACKNESS ON THE PART OF TPO AND ASSESSING OFFICER TO PASS THE O RDERS DISREGARDING THE VITAL FACT. 6. THE HONBLE APEX COURT IN THE CASE OF PCIT VS. MARUTI SUZUKI INDIA LTD.(SUPRA) HAS HELD THAT WHERE DURING ASSESSMENT P ROCEEDINGS, ASSESSEE COMPANY WAS AMALGAMATED WITH ANOTHER COMPANY AND TH E ASSESSMENT ORDER WAS PASSED SUBSEQUENTLY IN THE NAME OF NON-EXISTING ENTITY, SUCH ASSESSMENT ORDER IS WITHOUT JURISDICTION AND IS LIABLE TO BE S ET-ASIDE. THE HONBLE COURT FURTHER HELD THAT PARTICIPATION IN ASSESSMENT PROCE EDINGS WOULD NOT OPERATE AS AN ESTOPPLE AGAINST LAW. 7. THUS, IN THE LIGHT OF UNDISPUTED FACTS AND THE L AW SETTLED BY HONBLE APEX COURT IN THE CASE OF PCIT VS. MARUTI SUZUKI IN DIA LTD.(SUPRA), WE HOLD THAT THE ASSESSMENT ORDER PASSED IN THE NAME OF NON-EXIS TING ENTITY IS VOID-AB- INITIO. CONSEQUENTLY, THE ASSESSEE SUCCEEDS ON LEG AL GROUND NO.7 OF THE APPEAL. 8. SINCE, WE HAVE ALLOWED THE APPEAL OF ASSESSEE ON LEGAL ISSUE, THE OTHER GROUNDS RAISED IN APPEAL OF THE ASSESSEE HAVE BECOM E ACADEMIC AND HENCE, NOT DELIBERATED UPON. 8 ITA NO.1824/MUM/2015(A.Y.2010-11) C.O. NO.67/MUM/2015 ITA NO.1667/MUM/2015(A.Y.2010-11) 9. AS WE HAVE HELD THE ASSESSMENT ORDER UNSUSTAINAB LE IN LAW, THE APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED, WE HOLD A CCORDINGLY. THE CROSS OBJECTIONS OF THE ASSESSEE HAVE BECOME INFRUCTUOUS AND ARE DISMISSED AS SUCH. 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLO WED, THE APPEAL OF REVENUE AND CROSS OBJECTIONS OF ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 2 1 ST DAY OF FEBRUARY, 2020. SD/ SD/- (N.K.PRADHAN) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 21/02/2020 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI