Vivimed Labs Limited [Successor of M/s Vivimed Labs (Alathur) Pvt Ltd], Hyderabad V. Dy. Commissioner of Income Tax , Central Circle-2(3), Hyderabad

ITA 2312/Hyd/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8452 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 14-06-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 12-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI KIRAN
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Transfer pricing
• Section: 142(1); 143(2); 92CA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 2312/HYD/2018 ASSESSMENT YEAR: 2014-15 M/S.VIVIMED LABS LTD., [SUCCESSOR OF M/S.VIVIMED LABS (ALATHUR) PVT. LTD] HYDERABAD [PAN: AAACV6060A] VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(3), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P.MURALI MOHANA RAO, AR FOR REVENUE : SHRI RAVI KIRAN, CIT-DR DATE OF HEARING : 14-06-2021 DATE OF PRONOUNCEMENT : 18-08-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL FOR AY.2014-15 ARISES AGAINS T THE DCIT, CENTRAL CIRCLE-2(3), HYDERABADS ASSESSMENT DT. 25-10- 2018 FRAMED IN FURTHERANCE TO THE DISPUTE RESOLUTION PAN EL-1 DRP, BENGALURUS DIRECTIONS DT.24-09-2018 IN F.NO.5 8/DRP-1 /BNG/2018-19, INVOLVING PROCEEDINGS U/S.143(3) R.W.S.144C(13) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE NOTICE AT THE OUTSET THAT THE FIRST AND FOREMOST CLINCHING ISSUE THAT ARISES FOR OUR APT ADJUDICATION IS THAT OF VALIDITY OF IMPUGNED ASSESSMENT. A FEW BASIC FACTS QUA THE SAME MAY BE NOTICED HEREUNDER. ITA NO.2312/HYD/2018 :- 2 -: 3. THERE IS NO DISPUTE BETWEEN THE PARTIES THAT THE IMPUGNED ASSESSMENT PERTAINS TO THE ORIGINAL ASSESSEE/AMALGAMATING ENTITY M/S.VIVIMED LABS (ALATHU R) PVT. LTD. WHICH STOOD AMALGAMATED IN THE NAME AND STYLE OF M/S.VIVIMED LABS LTD. HAVING RESPECTIVE PANS ON AAGCA0040H AND AAACV6060A; RESPECTIVELY. 4. THE ABOVE FORMER ENTITY HAD FILED ITS ORIGINAL RE TURN ON 30-09-2014 IN MUMBAI. THE SAME WAS TAKEN UP FOR SCR UTINY. THIS FOLLOWED THE ASSESSING OFFICERS SECTION 143(2) AND 142(1) NOTICE(S) DT.28-08-2015 AND 01-09-2015; RESPECTIVELY. THE FORMER ENTITY, M/S.VIVIMED LABS (ALATHUR) PVT. LTD. THER EAFTER STOOD AMALGAMATED AS M/S.VIVIMED LABS LTD. ON 01-12-20 15 W.E.F.01-04-2014. THE ASSESSING OFFICER THEREAFTER MA DE SECTION 92CA REFERENCE IN THE PRESENT APPELLANTS NAM E FOLLOWED BY THE TRANSFER PRICING OFFICERS TPOS SEC TION 92CA(3)S ORDER DT.30-10-2017, ASSESSING OFFICERS D RAFT ASSESSMENT ORDER, HYDERABAD AFTER TRANSFER FROM MUMBAI DT.29-12-2017 THE DRPS DIRECTIONS 24-09-2018 CULMI NATING IN THE FINAL ASSESSMENT UNDER CHALLENGE DT.25-10-2018; RESPECTIVELY. 5. LEARNED COUNSEL HAS QUOTED HON'BLE APEX COURTS RE CENT LANDMARK JUDGMENT IN PCIT VS. MARUTI SUZUKI INDIA LTD (2019) [416 ITR 613] (SC) TO PLEAD THAT LEARNED LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN FRAMING ASSESSMENT IN THE NAME OF A NON-EXISTENT ENTITY IN VIEW OF THE HON'BLE BOMBAY HIGH COURTS AMALGAMATION SCHEME APPRO VED ON 01-12-2015 W.E.F.01-04-2014 AND THEREFORE, THE SAM E IS LIABLE TO BE DECLARED VOID AB INITIO. ITA NO.2312/HYD/2018 :- 3 -: 6. THE REVENUES CASE ON THE OTHER HAND IS THAT THE ASSESSEES INSTANT LEGAL PLEA DESERVES TO BE REJECTED FOR THE REASON THAT NOT ONLY THE LEARNED LOWER AUTHORITIES HAVE MENTIONED NAMES OF BOTH THE ENTITIES HEREIN I.E. M/S.VI VIMED LABS LTD. AS WELL AS M/S.VIVIMED LABS (ALATHUR) PVT. LTD. BUT ALSO THEY HAVE QUOTED THE PAN OF THE LATTER ENTITY (SUPRA ) WHICH SUFFICIENTLY ENSURES COMPLIANCE OF SECTION 17 0 OF THE ACT. LEARNED DEPARTMENTAL REPRESENTATIVE NEXT SOUGHT TO PIN POINT THE FACT THAT THE LOWER AUTHORITIES HAD ALSO ISSUED NOTICES IN THE NAME OF THE APPELLANT HEREIN ONLY AFTER AMALGAMATION (SUPRA). 7. WE HAVE HEARD BOTH THE PARTIES QUA THE INSTANT LEGAL ISSUE OF VALIDITY OF THE IMPUGNED ASSESSMENT AND FIND NO SUBSTANCE IN THE REVENUES STAND. THIS IS IN LIGHT OF THE CASE RECORDS SUFFICIENTLY PIN-POINTING THE FACT THAT THE LEAR NED LOWER AUTHORITIES HAD ISSUED SECTION 142(1) NOTICES; EVEN P OST AMALGAMATION, TO M/S.VIVIMED LABS (ALATHUR) PVT. LTD., ONLY. THE SAID NOTICES/LETTER DT.01-07-2016, 01-09-2016 AND 2 4-07- 2017 AS WELL AS DT.24-20-2017 (IN MUMBAI) DULY FORM PART OF THE CASE FILE. SO FAR AS THE REVENUES ARGUMENTS THAT W ITH REFERENCE TO THE LOWER AUTHORITIES HAVE DULY INCORPORA TED NAMES OF BOTH THESE ENTITIES, WE FIND THAT IT HAD ADOPTED THE VERY LINE OF REASONING BEFORE THEIR LORDSHIPS IN PAR AS 17(I) AS WELL AS (VII) THEREOF WHICH STOOD REJECTED IN THE HON 'BLE APEX COURT. WE FURTHER NOTE THAT THEIR LORDSHIPS HAVE CONSIDE RED ALL THESE ISSUES IN THE FOREGOING DETAILED JUDGMENT WHILST CONCLUDING THAT SUCH AN ASSESSMENT DOES NOT SATISFY THE L EGAL REQUIREMENT INVOLVING A DULY EXISTENT ENTITY. ITA NO.2312/HYD/2018 :- 4 -: 8. LEARNED COUNSEL LASTLY CONTENDED THAT THE LOWER AUTHORITIES COULD NOT BE ALLOWED TO ESCAPE THEIR LIABI LITY TO ESCAPE FROM THEIR DUTY TO FRAME A VALID ASSESSMENT IN CASE OF A SURVIVING ENTITY ONLY JUST BY QUOTING THE FORMER ENTITY S PAN (SUPRA) SINCE THE SAME CEASES TO EXIST POST AMALGAMATION . BE THAT AS IT MAY, THE FACT REMAINS THAT WE HAVE TAKEN NOTE OF ALL THE CASE MATERIAL ON RECORD SUGGESTING THE LEARNED LOW ER AUTHORITIES TO HAVE ISSUED NOTICE(S) (SUPRA) TO A NON-E XISTENT ENTITY ONLY WHICH RENDERS THE ENTIRE ASSESSMENT AS AN INVALID ONE . WE ORDER ACCORDINGLY. THE ASSESSMENT HEREIN DT.25-10- 2018 STANDS QUASHED. ALL OTHER PLEADINGS ON MERITS ARE RENDERED INFRUCTUOUS. 9. THIS ASSESSEES APPEAL IS ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 18-08-2021 TNMM ITA NO.2312/HYD/2018 :- 5 -: COPY TO : 1.M/S.VIVIMED LABS LTD., (SUCCESSOR OF M/S.VIVIMED LABS (ALATHUR) PVT. LTD), C/O. P.MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2.THE DY.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -2(3), HYDERABAD. 3.DISPUTE RESOLUTION PANEL (DRP), BENGALURU. 4.DIRECTOR OF INCOME TAX (IT & TP), HYDERABAD. 5.ADDL. COMMISSIONER OF INCOME TAX (TRANSFER PRICIN G), HYDERABAD. 6.D.R. ITAT, HYDERABAD. 7.GUARD FILE.