M/s. Ahead Enterprises Ltd., New Delhi V. DCIT, Faridabad

ITA 2567/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6974 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 28-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY GOYAL
• Section: 143(3); 142(1); 153A; 143(2); 153; 153C; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI , ' # $ , & ' BEFORE MS. SUSHMA CHOWLA, VP & SH. ANIL CHATURVEDI, AM [THROUGH VIDEO CONFERENCING] ( / ITA NO.2567/DEL/2017 ) / ASSESSMENT YEAR: 2010-11 M/S. AHEAD ENTERPRISES LTD. (MERGED WITH M/S AKRITI REALTECH LTD.) RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI-110049 PAN-AAGCA5942C ... .......... /APPELLANT VS THE DCIT, CENTRAL CIRCLE-II, FARIDABAD, . / RESPONDENT / APPELLANT BY: SH. SOMIL AGARWAL ADV. / RESPONDENT BY: SH. SANJAY GOYAL, DR ) / DATE OF HEARING : 06.08.2020 / DATE OF PRONOUNCEMENT: 09.09.2020 / ORDER PER SUSHMA CHOWLA, VP THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST ORDER OF CIT(A), KARNAL RELATING TO ASSESSMENT YEARS 2010-11 AGAINST THE OR DER PASSED UNDER SECTION 153A R.W.S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2 ITA NO.2567/DEL/2017 ASSESSMENT YEAR: 2010-11 2. THE ISSUE RAISED VIDE GROUND NO.1 IS THE JURISDI CTIONAL ISSUE AND WE PROCEED TO ADDRESS THE SAME BEFORE ADJUDICATION OF OTHER ISSUES RAISED ON MERITS. GROUND OF APPEAL RAISED BY THE ASSESSEE IS AS UNDER:- 1. THAT HAVING REGARD TO THE FACT AND CIRCUMSTANCE S OF THE CASE, LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMI NG THE ACTION OF LD.AO IN ASSUMING JURISDICTION AND ISSUING OF NOTICE U/S 153 A R.W.S. 153C OF THE ACT, MORE SO WHEN THE NOTICE WAS ISSUED IN THE NAME OF NON-EXISTING ENTITY. 3. BRIEFLY IN THE FACTS OF THE CASE, SEARCH U/S 132 OF THE ACT WAS CARRIED OUT AT THE RESIDENTIAL AS WELL AS BUSINESS/OFFICE PREMI SES OF M/S. SRS GROUP OF CASES ON 09.05.2012. THE ASSESSING OFFICER IN ACCO RDANCE WITH PROVISION OF SECTION 153C R.W.S 153A OF THE ACT, ISSUED NOTICE D ATED 10.11.2014, REQUIRING IT TO FILE RETURN OF INCOME IN RESPECT OF ASSESSMEN T YEAR 2010-11. IN RESPONSE THERETO, THE ASSESSEE FILED RETURN OF INCOME DECLAR ING RS.25,26,830/-. THEREAFTER, THE CASE OF THE ASSESSEE WAS TAKEN UP F OR SCRUTINY. AN ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE TOTALING RS.4 7,46,688/-. THE ASSESSMENT ORDER WAS PASSED IN THE NAME OF THE ASSE SSEE I.E. M/S. AHEAD ENTERPRISES LTD. 4. BEFORE THE CIT(A), THE ASSESSEE RAISED PRELIMINA RY ISSUE THAT THE ASSESSMENT ORDER WAS NOT JUSTIFIED SINCE THE ASSESS EES COMPANY DID NOT EXIST ON THE DATE OF ISSUE OF NOTICE U/S 153C R.W.S. 153A OF THE ACT. THE CASE OF THE ASSESSEE BEFORE THE CIT(A) WAS THAT NO ASSESSMENT C OULD BE MADE IN THE NAME OF COMPANY, IF ITS NAMES HAD BEEN STRUCK OFF FROM THE REGISTRAR OF COMPANIES. 3 ITA NO.2567/DEL/2017 ASSESSMENT YEAR: 2010-11 THE ASSESSEE POINTED OUT THAT IT HAD AMALGAMATED W ITH M/S. AKRITI REALTECH LTD. (IN SHORT M/S. AKRITI) AS PER THE ORDER OF T HE HONBLE HIGH COURT. THE ASSESSEE CLAIMED IT AS THE ASSESSEE DID NOT EXIST O N THE DATE OF SERVICE OF NOTICE, THE ASSESSMENT WAS NOT VALID. THE CIT(A) R EJECTED THE PLEA OF THE ASSESSEE ON THE GROUND THAT IT HAS NOT INFORMED THE INCOME TAX DEPARTMENT REGARDING ITS NON-EXISTENCE WITHIN REASONABLE TIME. HE ALSO DECIDED THE ISSUE ON MERITS AGAINST THE ASSESSEE. THE ASSESSEE IS IN APPEAL BEFORE US, BOTH ON THE PRELIMINARY ISSUE AND ALSO ISSUE RAISED ON MERI TS. 5. THE LD.AR FOR THE ASSESSEE POINTED OUT THAT SEAR CH OF M/S. SRS GROUP HAD BEEN CARRIED OUT ON 09.05.2012. HE FURTHER POI NTED OUT THAT NOTICE U/S 153C OF THE ACT WAS ISSUED ON 10.11.2014. PLEA IN THIS REGARD WAS THAT THE ASSESSEE COMPANY HAD MERGED WITH M/S. AKRITI W.E.F. 01.04.2012 AS PER THE ORDER OF HONBLE HIGH COURT DATED 10.12.2012. THE LD.AR FOR THE ASSESSEE BEFORE US POINTED OUT THAT THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2013-14 WHICH IS ALSO DATED 20.03.2015, WAS PASSED BY THE S AME ASSESSING OFFICER AND THE PROCEEDINGS WERE FILED AS THE ASSESSEE HAD MERG ED WITH M/S. AKRITI. HOWEVER, FOR ASSESSMENT YEAR 2010-11, THE SAME ASSE SSING OFFICER HAD PASSED THE ASSESSMENT ORDER DATED 20.03.2015 IN THE NAME O F THE MERGED NON-EXISTING ENTITY. OUR ATTENTION WAS DRAWN TO PAGE 52 OF THE PAPERBOOK WHEREIN COMMON NOTICE WAS ISSUED FOR ALL THE PROCEEDINGS AND IN R EPLY THERETO, THE ASSESSEE HAD INFORMED ABOUT ITS MERGER WITH M/S. AKRITI IN ASSES SMENT YEAR 2013-14. THE PROCEEDINGS WERE FILED AND IN ASSESSMENT YEAR 2010- 11, THE ASSESSMENT WAS 4 ITA NO.2567/DEL/2017 ASSESSMENT YEAR: 2010-11 COMPLETED U/S 153C R.W.S. 143(3) OF THE ACT. RELIA NCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN MARUTI SUZUKI CIVIL APPEAL NO. 5409 OF 2019 VIDE JUDGEMENT DATED 25.07.2019. 6. THE LD.DR FOR THE REVENUE PLACING RELIANCE ON TH E ORDERS OF THE AUTHORITIES BELOW POINTED OUT THAT NO SEPARATE LETT ER INFORMING ABOUT THE MERGER OF ASSESSEE WITH M/S. AKRITI WAS FILED. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE JURISDICTIONAL ISSUE RAISED IN THE PRESENT APPEAL I S WHETHER THE ASSESSMENT WHICH IS COMPLETED IN THE NAME OF AN ENTITY, WHICH IS NOT IN EXISTENCE ON THE DATE OF PASSING OF THE ASSESSMENT ORDER, CAN THE SA ID ORDER BE UPHELD IN LAW? AS REFERRED BY US IN PARAS ABOVE, CONSEQUENT TO SEA RCH ON M/S. SRS GROUP ON 09.05.2012, NOTICE U/S 153C OF THE ACT WAS ISSUED T O THE ASSESSEE FOR ASSESSMENT YEAR 2010-11. THE ASSESSING OFFICER HAD ISSUED NOTICE DATED 05.12.2014 U/S 143(2) OF THE ACT ALONGWITH LETTER DATED 05.12.2014 RELATING TO ASSESSMENT YEARS 2007-08 TO 2013-14. IN THIS LETTE R, THE ASSESSEE WAS ASKED TO FURNISH THE RETURN OF INCOME FOR THE PAST SIX YE ARS ALONGWITH OTHER DETAILS. COPY OF THE SAID NOTICE AND THE LETTER ARE PLACED A T PAGES 51 TO 55 OF THE PAPERBOOK. THE ASSESSEE FILED ITS REPLY AND PARTIC IPATED IN THE ASSESSMENT PROCEEDINGS. SIMULTANEOUSLY, ASSESSMENT PROCEEDING S WERE ALSO CARRIED OUT FOR ASSESSMENT YEAR 2013-14. COPY OF THE ORDER FOR ASSESSMENT YEAR 2013-14 IS ALSO PLACED ON RECORD WHICH IS DATED 20.03.2015. IT MAY BE NOTED THAT FOR ASSESSMENT YEAR 2010-11, ASSESSMENT ORDER WAS PASSE D BY THE SAME 5 ITA NO.2567/DEL/2017 ASSESSMENT YEAR: 2010-11 ASSESSING OFFICER ON 20.03.2015. IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2013-14, THE ASSESSING OFFICER ACKNOWLEDGED THE STA TEMENT OF THE ASSESSEE THAT COMPANY HAD MERGED WITH M/S. AKRITI AND ALSO R EFERENCE TO THE COPY OF ORDER OF HONBLE HIGH COURT. HE FURTHER GOES TO S AY THAT DURING THE YEAR, COMPANY WAS NOT IN EXISTENCE, THEREFORE, PROCEEDING S INSTITUTED U/S 142(1) OF THE ACT ARE HEREBY FILED. WHERE THE FACTUM OF NON- EXISTENCE OF THE ASSESSEE I.E. THE MERGER OF THE ASSESSEE COMPANY WITH M/S. A KRITI WAS IN THE KNOWLEDGE OF THE ASSESSING OFFICER, THEN THE PRESENT ORDER PA SSED FOR ASSESSMENT YEAR 2010-11 SUFFERS FROM INFIRMITY, AS IT IS PASSED IN THE NAME OF NON-EXISTENT ENTITY. IN THIS REGARD, WE FIND SUPPORT FROM THE RA TIO LAID DOWN BY THE DECISION OF HONBLE SUPREME COURT IN MARUTI SUZUKI (SUPRA). 8. THE LD.DR FOR THE REVENUE HAS STRESSED THAT NO S EPARATE LETTER INFORMING THE MERGER WAS FILED FOR THE YEAR UNDER CONSIDERATI ON. BUT WHERE THE ASSESSMENT PROCEEDINGS ARE BEING CARRIED OUT SIMULT ANEOUSLY FOR SIX YEARS AND WHERE THE COMMON LETTER WAS ISSUED FOR ALL THE YEAR S, THEN THE FACTUM OF THE ASSESSEE HAVING BEEN MERGED WITH M/S. AKRITI WAS IN THE KNOWLEDGE OF ASSESSING OFFICER, AND SAME CANNOT BE BRUSHED ASIDE . IN ANY CASE, ASSESSMENT FRAMED IN THE NAME OF THE NON-EXISTING ENTITY CANNOT STAND IN THE EYES OF LAW. HENCE, WE HOLD THAT THE PRESENT ASSES SMENT ORDER IS BOTH INVALID AND BAD IN LAW. GROUND OF APPEAL NO.1 RAISED BY TH E ASSESSEE IS THUS ALLOWED. 9. THE REMAINING GROUNDS OF APPEAL RAISED BY THE AS SESSEE BECAME ACADEMIC IN NATURE AND THE SAME ARE NOT ADJUDICATED . 6 ITA NO.2567/DEL/2017 ASSESSMENT YEAR: 2010-11 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH SEPTEMBER, 2020. SD/- SD/- (ANIL CHATURVEDI) (SUSHMA CHOWLA) & ' / ACCOUNTANT MEMBER / VICE PRESIDENT / ) DATED : 09 TH SEPTEMBER, 2020 * AMIT KUMAR * *)+),'#-.)/.#0 COPY OF THE ORDER IS FORWARDED TO : 1. 12) / THE APPELLANT 2. ,312) / THE RESPONDENT 3. ) 4# 5 )6 / THE CIT(A) 4. 7)) 4#) / THE PR. CIT 5. 6. ) .89),'#' ): )) : ) / DR, ITAT, DELHI 9;<)=))0 GUARD FILE. ) * / BY ORDER , 3.#),'# // TRUE COPY // > ?@'A , )) ): ) ASSISTANT REGISTRAR, ITAT, DELHI