M/s Meena Holdings Limited , Bangalore V. Income Tax Officer Ward-3(1)(2), Bangalore

ITA 2224/BANG/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 3917 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 19-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H L SOUMYA ACHAR
• Assessee Lawyers: SUDHEENDRA B R
• Keywords: Opportunity of being heard; Scheme of amalgamation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BANGALORE BENCH B BEFORE S HRI JASON P BOAZ , ACCOUNTANT MEMBER I.T . A. NO. 2224 /BANG/20 18 (ASSESSMENT YEAR : 20 15 - 16 ) M/S. MEENA HOLDINGS LIMITED, (SUCCESSSOR TO GAJANAND BUILDINGS & SERVICES PVT. LTD.) GOLDEN ENCLAVE, CORPORATION BLOCK, TOWER B - 1, 5 TH FLOOR, HAL OLD AIRPORT ROAD, BANGALORE - 560 017 . . APPELLANT. PAN AABCL 5353M VS. INCOME TAX OFFICER, WARD 3(1)( 2), BANGALORE. .. RESPONDENT. APPELLANT BY : SHRI SUDHEENDRA B R, C.A. R E SPONDENT BY : SMT. H. L. SOUMYA ACHAR, ADDL. CIT (D.R) DATE OF H EARING : 17.09.2018. DATE OF P RONOUNCEMENT : 31 .10 .201 8 . O R D E R PER SHRI JASON P BOAZ, A .M . : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPE ALS) - 3 , BANGALORE DT.13.06.2018 FOR THE ASSESSMENT YEAR 20 15 - 16. 2 IT A NO. 2224 /BANG/201 8 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER : - 2.1 THE ASSESSEE, A COMPANY ENGAGED IN THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF BUILDING S , FILED ITS RETURN OF INCOM E FOR ASSESSMENT YEAR 2015 - 16 ON 21.9.2015 DECLARING BUSINESS LOSS OF ( - ) RS.22,81,707. THE CASE WAS SELECTED FOR SCRUTINY FOR THE YEAR UNDER CONSIDERATION AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE A CT') VIDE ORDER DT.16.10.2017, WHEREIN THE ASSESSEE'S INCOME WAS DETERMINED AT RS.9,90,789 . THE ASSESSING OFFICER ALSO DISALLOWED TDS CREDIT CLAIMED TO THE EXTENT OF RS.2,90,000. ON APPEAL, THE CIT (APPEALS) - 3, BANGALORE DISMISSED THE ASSESSEE'S APPEAL V IDE THE IMPUGNED ORDER DT.13.06.2018. 3.1 AGGRIEVED BY THE ORDER OF CIT (APPEALS) 3, BANGALORE DT.13.06.2018 FOR ASSESSMENT YEAR 2015 - 16, THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL RAISING CERTAIN GROUNDS WHICH WERE THEN RE VISED. THE REVISED GROUNDS ARE AS UNDER : - 3 IT A NO. 2224 /BANG/201 8 3.2.1 APART FROM THE ABOVE REVISED GROUNDS (SUPRA), THE ASSESSEE HAS RAISED THE FOLLOWING ADDITIONAL GROUNDS VIDE PETITION FILED ON 6.8.2018 : - 4 IT A NO. 2224 /BANG/201 8 5 IT A NO. 2224 /BANG/201 8 3.2.2 THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT TH E ADDITIONAL GROUNDS RAISED (SUPRA) ARE PURELY ON LEGAL ISSUES AND DO NOT INVOLVE INVESTIGATION OF ANY FACTS OTHER THAN THOSE ON RECORDS OF THE DEPARTMENT. IT IS SUBMITTED THAT THESE GROUNDS WERE NOT SPECIFICALLY URGED BEFORE THE LEARNED CIT(A) AND IN TH E ORIGINAL GROUNDS BY OVERSIGHT. PER CONTRA, THE LEARNED DR FOR REVENUE CONTENDED THAT SINCE THESE ADDITIONAL GROUNDS WERE RAISED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE TRIBUNAL, THE SAME MAY NOT BE ADMITTED. 3.2.3 I HAVE CONSIDERED THE RIV AL CONTENTIONS AND CAREFULLY PERUSED THE RECORD. IN MY CONSIDERED VIEW, EVEN THOUGH RAISED BEFORE THE TRIBUNAL FOR THE FIRST TIME, SINCE THE ADDITIONAL GROUNDS RAISED ARE PURELY LEGAL IN NATURE AND GO TO THE ROOT OF THE MATTER FOR ADJUDICATION OF THIS APP EAL, I, THEREFORE, IN THE INTEREST OF SUBSTANTIAL JUSTICE ADMIT THE 6 IT A NO. 2224 /BANG/201 8 ADDITIONAL GROUNDS RAISED BY THE ASSESSEE FOR CONSIDERATION AND ADJUDICATION, FOLLOWING THE RATIO OF THE DECISION OF THE HON BLE APEX COURT IN THE CASE OF NTPC LTD., VS. CIT ( 229 ITR 383) (SC). THE SAME ARE ADJUDICATED HEREUNDER: 4.0 ADDITIONAL GROUND NO.1 ASSESSMENT ORDER PASSED AGAINST THE AMALGAMATING COMPANY IS BAD IN LAW AND LIABLE TO BE QUASHED. 4.1 AT THE OUTSET OF THE HEARING, THE LEARNED AUTHORISED RE PRESENTATIVE FOR THE ASSESSEE AGITATED THE ISSUE RAISED IN ADDITIONAL GROUND NO.1 (SUPRA). IN THIS GROUND, THE ASSESSEE CONTENDS THAT THE ASSESSING OFFICER ERRED IN PASSING THE IMPUGNED ORDER OF ASSESSMENT DT.16.10.2017 FOR ASSESSMENT YEAR 2015 - 16 IN THE NAME OF THE AMALGAMATING COMPANY I.E. GAJANAND BUILDING & SERVICES PVT. LTD. WHICH IS INVALID AND BAD IN LAW AS THE SAID COMPANY WAS AMALGAMATED WITH MEENA HOLDINGS LTD. VIDE THE ORDER OF THE NATIONAL COMPANY LAW TRIBUNAL ( NCLT ) DT.14.09.2017 W.E.F. T HE APPOINTED DATE OF 1.4.2016. 4.2 THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR REVENUE ARGUED THAT THE FACT OF AMALGAMATION WAS NOT BROUGHT TO THE NOTICE OF THE DEPARTMENT. IN THIS REGARD, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT TH E APPEAL BEFORE THE CIT (APPEALS) AND THE REPLY TO THE 7 IT A NO. 2224 /BANG/201 8 NOTICE IN PENALTY PROCEEDINGS WERE ALSO FILED BY THE AMALGAMATING COMPANY AND THEREFORE WHEN THE FACT OF AMALGAMATION IS NOT INTIMATED TO THE DEPARTMENT, THE ASSESSING OFFICER CANNOT BE FAULTED AND HEN CE THE ORDER OF ASSESSMENT DT.16.10.2017 FOR ASSESSMENT YEAR 2015 - 16 CANNOT BE DECLARED INVALID. 4.3 IN REJOINDER, THE LEARNED AUTHORISED REPRESENTATIVE DREW MY ATTENTION TO THE NCLT ORDER DT.14.9.2017 SANCTIONING THE SCHEME OF AMALGAMATION, WHEREIN IT IS MENTIONED THAT THE INCOME TAX DEPARTMENT WAS GIVEN 15 DAYS NOTICE FOR THEIR SPECIFIC COMMENTS IN THE MAT T ER BY THE REGIONAL DIRECTOR, BEFORE SANCTIONING THE SCHEME OF AMALGAMATION. IT WAS ARGUED THAT THEREFORE THE ASSESSING OFFICER WAS AWARE OF THE FACT OF AMALGAMATION. IT WAS ALSO SUBMITTED THAT THERE IS NO STATUTORY MANDATE TO INFORM THE DEPARTMENT ABOUT THE AMALGAMATION AND ANY ORDER PASSED IN THE NAME OF THE AMALGAMATING COMPANY IS A NULLITY. 4.4 I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. FROM THE DETAILS ON RECORD, IT EMERGES THAT THE ASSESSEE DID NOT INTIMATE THE ASSESSING OFFICER ON THE CIT (APPEALS) REGARDING THE FACT OF AMALGAMATION OF M/S. GAJANAND 8 IT A NO. 2224 /BANG/201 8 BUILDING & SERVICES PVT. LT D. WITH MEENA HOLDINGS LTD. BY NCLT ORDER DT.14.9.2017. THIS VIEW OF MINE IS BUTTRESSED BY THE FACT THAT EVEN AFTER NCLT S ORDER OF AMALGAMATION DT.14.9.2017, THE ASSESSEE FILED THE APPEAL FOR THIS ASSESSMENT YEAR BEFORE THE CIT (APPEALS) - 3, BANGALORE ON 22.11.2017 IN THE NAME OF THE AMALGAMATING COMPANY. THE PENALTY NOTICE FOR INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WAS ALSO REPLIED TO BY THE AMALGAMATING COMPANY AFTER THE AMALGAMATION. NO DOUBT, THE INCOME TAX DEPARTMENT WAS G IVEN 15 DAYS NOTICE FOR THEIR COMMENTS BY THE REGIONAL DIRECTOR BEFORE SANCTIONING THE SCHEME OF AMALGAMATION. HOWEVER, IT IS NOT CLEAR AS TO WHETHER THE ASSESSING OFFICER WAS INTIMATED TO FURNISH HIS / HER COMMENTS ON THE SCHEME OF AMALGAMATION. IN THIS BEING OVERALL FACTUAL MATRIX OF THE CASES AS DISCUSSED ABOVE, I AM OF THE CONSIDERED VIEW AND HOLD THAT THE ORDER OF ASSESSMENT DT.16.10.2017 FOR ASSESSMENT YEAR 2015 - 16 PASSED IN THE NAME OF THE AMALGAMATING COMPANY; I.E. GAJANAND BUILDINGS & SERVICES PVT . LTD. IS SET ASIDE AND THE ENTIRE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO EXAMINATION / CONSIDERATION AND PASSING OF THE ORDER OF ASSESSMENT IN ACCORDANCE WITH LAW. IN THIS VIEW OF THE 9 IT A NO. 2224 /BANG/201 8 MAT T ER, THE OTHER GROUNDS OF APPEAL / A DDITIONAL GROUNDS OF APPEAL ARE NOT ADJUDICATED AS THE ENTIRE MATTER IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO CONSIDERATION. NEEDLESS TO ADD, THE ASSESSING OFFICER SHALL AFFORD THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND T O FILE DETAILS / SUBMISSIONS ON ALL ISSUES / CONTENTIONS WHICH SHALL BE DULY CONSIDERED BEFORE DECIDING THEREON BY WAY OF SPEAKING AND REASONED ORDER. THE ASSESSING OFFICER IS ACCORDINGLY ORDERED. 5. IN THE RESULT, THE ASSESSEE'S APPEAL FOR ASSE SSMENT YEAR 2015 - 16 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 31ST DAY OF OCT., 201 8 . SD/ - ( JASON P BOAZ ) ACCOUNTANT MEMBER BANGALORE, DT. 31 .10.2018. *REDD Y GP 10 IT A NO. 2224 /BANG/201 8 COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUARD FILE CERTIFIED TRUE COPY ASST. REGISTRAR INCOME TAX AP PELLATE TRIBUNAL BANGALORE.