ITO, New Delhi V. M/s Heartland Bangalore Transcription and Services Pvt. Ltd., New Delhi

ITA 3008/DEL/2011

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3322 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I2
• Next Hearing Date: 12-07-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 07-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; Procedural lapse; Scheme of amalgamation
• Section: 143(3); 92

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I - 2 : NEW DELHI BEFORE SHRI H.S.SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 3008/DEL/2011 (ASSESSMENT YEAR: 2005 - 06 ) ITO, WARD - 12(3), NEW DELHI VS TRANSCEND MT SERVICES PVT. LTD (FORMERLY KNOWN AS HEAR T LAND BANGALORE TRANSCRIPTION AND SERVICES PVT. LTD, )(ERSTWHILE HARTLAND BANGALORE TRANSCRIPTION AND SERVICES PVT . LTD PLOT NO. 14, SAGAR TOWER, DISTRICT CENTRE, JANAKPURI, NEW DELHI PAN: AAACH9232J (APPELLANT) (RESPONDENT) CO NO. 238/DEL/2011 (IN ITA NO. 3008/DEL/2011 ) (ASSESSMENT YEAR: 2005 - 06) TRANSCEND MT SERVICES PVT. LTD (FORMERLY KNOWN AS HEAR T LAND BANGALORE TRANSCRIPTION AND SERVICES PVT. LTD, )(ERSTWHILE HARTLAND BANGALORE TRANSCRIPTION AND SERVICES PVT . LTD PLOT NO. 14, SAGAR TOWER, DISTRICT CENTRE, JANAKPURI, NEW DELHI PAN: AAACH9232J VS ITO, WARD - 12(3), NEW DELHI (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SANJAY KUMAR YADAV, SR. DR ASSESSEE BY: SHRI VISHAL KALRA, ADV SHRI SS TOMAR, ADV SHRI ANKIT SAHNI, ADV DATE OF HEARING 20/12/2017 DATE OF PRONOUNCEMENT 0 9 / 0 3 / 2018 O R D E R PAGE | 2 PER PRASHANT MAHARISHI , A. M. 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - XX, NEW DELHI DATED 05.04.2011 FOR THE ASSESSMENT YEAR 2005 - 06. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN NOT AFFORDING ANY OPPORTUNITY TO THE TPO BEFORE PROCEEDING TO COMPUTE THE MARGINS OF THE COMPARABLES AND THE ASSESSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 13533249/ - MADE BY THE LD AO ON ACCOUNT OF ARMS LENGTH PRICE. 3. THE ASSESSEE HAS ALSO FILED A CROSS OBJECTION WHERE THE GROUND OF APPEAL ARE AS UNDER: - 1. USING FINANCIAL INFORMATION OF THE COMPARABLE COMPANIES RELATING TO THE FINANCIAL YEAR (FY) 2004 - 05 ALTHOUGH SUCH INFORMATION WAS NOT AVAILABLE TO THE ASSESSEE AT THE TIME OF PREPARATION OF DOCUMENTATION AS PER THE REQUIREMENT OF THE ACT. 2. ACCEPTING THE EXPORT/ FOREIGN EXCHANGE REVENUE FILTER APPLIED BY THE LD TRANSFER PRICING OFFICER (TPO)/ ASSESSING OFFICER (AO) TO SELECT COMPARABLE COMPANIES. 3. ACCEPTING COMPARABLE COMPANY WITH ABNORMAL MARGIN. 4. NOT GRANTING COMPARABILITY ADJUSTMENTS ON ACCOUNT O F DIFFERENCE IN RISK ASSUMED BY THE ASSESSEE VIS A VIS THE COMPARABLE COMPANIES AND IN IGNORING THE QUANTIFICATION OF THE SAME. 5. NOT ADJUDICATING ON THE AVAILABILITY OF THE BENEFIT OF PROVISO TO SECTION 92C(2) OF THE ACT TO THE ASSESSEE AND 6. REJECTIN G THE PLEA THAT THE ASSESSEE IS A STPI UNIT WHICH IS ENTITLED TO TAX HOLIDAY AND CONSEQUENTLY THERE IS NO MOTIVATION FOR SHIFTING PROFITS THROUGH TRANSFER PRICING MECHANISM. 4. THE ASSESSEE HAS ALSO FILE D P R A Y E R F O R A D M I S S I O N O F AN ADDITIONAL GROUND IN CROSS OBJECTION CHALLENGIN G THAT THE ASSESSMENT ORDER IS PASSED ON A NON EXISTEN T AMALGAMATED ENTITY. THEREFORE, THE ORDER PASSED BY THE LD ASSESSING OFFICER U/S 143(3) OF TH E INCOME TAX ACT IS BAD IN LAW. THE ASSESSEE HAS MADE AN APPLICATION VIDE 15.12.2017 STATING THAT THE ABOVE GROUND OF APPEAL IS PURELY LEGAL IN NATURE AND GOES TO THE ROOT OF THE MATTER. IT WAS FURTHER STATED THAT ASSESSEE IS RAISING THIS LEGAL GROUND AND FOR WHICH NO FACTS ARE REQUIRED TO BE INVESTIGATED. HE RELIED UPON THE DECISION OF THE HON'BLE SUPREME COUR T IN CASE OF NATIONAL THERMAL POWER PAGE | 3 CO. LTD VS. CIT 229 ITR 383. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS AS UNDER: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY THE LD AO UNDER SECTION 143(3) OF THE ACT, ON N ON - EXISTENT (AMALGAMATED) ENTITY, NAMELY, HEARTLAND BANGALORE TRANSACTION & SERVICES PRIVATE LTD IS BAD IN LAW AND VOID AB INITIO AND LIABLE TO QUASHED. 5. THEREFORE, THE LD AR SUBMITTED THAT ABOVE GROUND OF APPEAL MAY BE ADMITTED. 6. THE LD DEPARTMENTAL REPRESENTATIVE VEHEMENTLY OPPOSED THE APPLICATION OF THE ASSESSEE SUBMITTING SAME HAVE NEITHER RAISED BEFORE THE LOWER AUTHORITIES AND THEREFORE, NOW IT CANNOT BE ADMITTED. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PE RUSED THE APPLICATION MADE BY THE ASSESSEE FOR ADMISSION OF ADDITIONAL GROUND. THERE CANNOT BE ANY DOUBT THAT GROUND RAISED BY THE ASSESSEE IS TECHNICAL IN NATURE AND GOES TO THE ROOT OF THE MATTER. FURTHER, NO FRESH FACTS NEEDS TO BE INVESTIGATED. THEREFO RE, WE ADMIT THE ADDITIONAL GROUND FILED BY THE ASSESSEE. 8. ON THE ADDITIONAL GROUND THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A COMPANY WHICH HAS AMALGAMATED WITH HEARTLAND INFORMATION AND CONSULTANCY SERVICES PVT. LTD BY THE DECISION OF HON'BLE KARNATAK A HIGH COURT DATED 03.07.2008 FROM 01.04.2008. THE ABOVE COPY OF THE DECISION WAS FILED WITH THE REGISTRAR OF COMPANIES ON 08.08.2008 AND INTIMATION OF THE MERGER WAS GIVEN TO THE LD ASSESSING OFFICER VIDE L E T T E R D A T E D 08.10.2008. HE REFERRED TO THE COPY OF THE LETTER SUBMITTED BEFORE THE LD ASSESSING OFFICER. HE FURTHER SUBMITTED THAT THE SAME LETTER OF THE SAME DATE WAS ALSO ADDRESSED TO THE ADDLL. DIT, TRANSFER PRICING - I, BANGALORE, ON 14.10.2008. HE FURTHER REFERRED TO THE IDENTICAL LETTER SUBMITTED TO THE ITO, WARD - 11(2), BANGALORE. HE FURTHER REFERRED TO THE SUBMISSION MADE BEFORE THE LD CIT(A) VIDE LETTER DATED 03.12.2008 IN THE APPELLATE PROCEEDINGS ALSO. HE FURTHER STATED THAT IDENTICAL ISSUE AROSE IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2007 - 08 WHEREIN, ON THE IDENTICAL FACTS AND CIRCUMSTANCES THE COORDINATE BENCH HAS QUASHED THE ASSESSMENT MADE BY THE LD ASSESSING OFFICER IN ITA NO. 2697/DEL/2014 DATED PAGE | 4 30.11.2017. HE FURTHER RELIED UPON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN CASE OF CIT VS. DIMENSI ON APPARELS PVT. LTD 370 ITR 288, CIT VS. SPICE INFOTAINMENT LTD TS - 504 - S.C.2 - 2017. IN VIEW OF THIS HE SUBMITTED THAT THE ASSESSMENT ORDER PASSED BY THE LD ASSESSING OFFICER ON M/S. HEARTLAND BANGALORE TRANSCRIPTION AND SERVICES PVT. LTD U/S 143(3) OF THE ACT ON 29.12.2008 IS INVALID, BAD IN LAW AND VOID AB INITIO AND THEREFORE, LIABLE TO BE QUASHED. 9. THE LD DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT SUCH ORDER CANNOT BE QUASHED AS ASSESSING OFFICER HAS PASSED THE ORDER NAMING THE COMPANY AS M/S. HEART LAND BANGALORE TRANSCRIPTION AND SERVICES PVT LTD (AMALGAMATED WITH HEARTLAND INFORMATION AND CONSULTANCY SERVICES PVT. LTD). THEREFORE, THE LD ASSESSING OFFICER HAS CORRECTLY TAKEN INTO THE ACCOUNT THE FACT OF THE AMALGAMATION. THEREFORE, HE SUBMITTED TH AT SUCH ORDERS CANNOT BE HELD TO BE INVALID. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDERS OF THE LOWER AUTHORITIES. ADMITTEDLY THE ASSESSEE COMPANY M/S. HEARTLAND BANGALORE TRANSCRIPTION SERVICES PVT. LTD FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2005 - 06 ON 26.10.2005 AT RS. 807120/ - . PURSUANT TO THE SCHEME OF MERGER OF THE ABOVE COMPANY WITH H E ARTLAND INFORMATION AND CONSULTANCY PVT. LTD THE HON'BLE KARNATAKA HIGH COURT PASSED AN ORD ER ON 03.07.2008 IN COMPANY PETITION NO. 126/2007 APPROVING THE MERGER. SUCH INTIMATION WAS ALSO GIVEN TO THE INCOME TAX AUTHORITY INCLUDING THE ASSESSING OFFICER VIDE LETTER DATED 08.08.2008. DESPITE THE ABOVE INTIMATION THE LD ASSESSING OFFICER PASSED AS SESSMENT ORDER U/S 143(3) OF THE ACT ON 29.12.2008 ON M/S. HEARTLAND BANGALORE TRANSCRIPTION AND SERVICES PVT LTD. THE ISSUE BEFORE US IS WHETHER SUCH AN ORDER CAN BE SAID TO BE A VALID ORDER . THE HON'BLE DELHI HIGH COURT IN CASE OF SPICE INFOTAINMENT PVT. LTD IN IT A NO. 475 AND 476 DATED 03.08.2011 HAS HELD THAT WHEN THE ASSESSMENT IS FRAMED IN THE NAME OF NON EXISTING ENTITY THEN IT IS INVALID. IT IS FURTHER HELD THAT IT IS NOT SAID TO BE A PROCEDURAL IRREGULARITY WHICH CAN BE CURED BY INVOKING OF SECTION 292B OF THE ACT. IDENTICAL ISSUE HAS FURTHER BEEN DECIDED BY THE HON'BLE DELHI HIGH COURT IN CIT VS. DIMENSION APPARELS PVT. LTD IN 370 ITR 288 PAGE | 5 (DEL) WHEREIN, IT HAS BEEN HELD THAT ASSESSMENT ON AMALGAMATED COMPANY IS INVALID. IN THE CASE OF THE ASSESSEE THE IDENTICAL ISSUE IS DECIDED FOR AY 2007 - 08 IN ITA NO. 2697/DEL/2014 AS UNDER: - 6. NOW THE DEPARTMENT IS IN APPEAL AGAINST THE RELIEF ALLOWED AND THE ASSESSEE HAS FILED THE CROSS OBJECTION CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER PASSED BY THE A O ON THE NON - EXISTENT (AMALGAMATED ENTITY) NAMELY M/S HEARTLAND INFORMATION AND CONSULTANCY SERVICES PVT. LTD. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE COMPANY WAS AMALGAMATED WITH M/S HEARTLAND INFORMATION AND CONSULTANCY SERVICES PVT. LTD., BANGALORE (HICS) AND IN THIS REGARD LETTER DATED 19TH OCTOBER, 2008 WAS FILED WITH THE AO INFORMING HIM THAT PURSUANT TO THE ORDER DATED 25.07.2008 OF THE HON'BLE HIGH COURT AT NEW DELHI, M/S HEARTLAND DELHI TRANSCRIPTION AND SERVICES PVT. LTD. (HDTS) HAS AMALGAMATED WITH M/S HEARTLAND INFORMATION AND CONSULTANCY PVT. LTD. (HICS), A CERTIFIED COPY OF THE ORDER OF THE HON'BLE DELHI HIGH COURT WAS FILED WITH THE REGISTRAR OF COMPANIES ON 17TH SEPTEMBER, 2008. IT WAS STATED THAT M/S HDTS HAS CEASED TO EXISTS I.E. DISSOLVED WITHOUT BINDING UP AND HICS HAS TAKEN OVER THE ASSESSEE'S LIABILITIES, RESPONSIBILITIES AND OBLIGATIONS. IT WAS FURTHER STATED THAT AFORESAID INFORMATION WAS ALSO GIVEN TO THE TPO AND THE LD. CIT(A) - 4, DELHI VIDE LETTERS OF THE EVE N DATES. OUR ATTENTION WAS DRAWN TOWARDS PAGE NOS. 900 TO 907 OF THE ASSESEE'S PAPER BOOK WHICH ARE THE COPIES OF THE SAID LETTERS WRITTEN TO THE RESPECTIVE AUTHORITIES. IT WAS FURTHER SUBMITTED THAT THE ASSESSMENT HAS BEEN FRAMED BY THE AO ON THE ERSTWHIL E AMALGAMATED COMPANY I.E. M/S HEARTLAND DELHI TRANSCRIPTION AND SERVICES PVT. LTD. (HDTS) VIDE ORDER DATED 22.2.2011, ON THE SAID DATE THE SAID COMPANY WAS NOT IN EXISTENCE, THEREFORE, ASSESSMENT FRAMED WAS VOID AB INITIO. THE RELIANCE WAS PLACED ON THE F OLLOWING CASE LAWS: - S. NO. PARTICULARS 1. CIT VS. SPICE ENFOTAINMENT LTD. [TS - 504 - SC - 2017] (SC) 2. SPICE ENTERTAINMENT LIMITED VS. COMMISSIONER OF SERVICE TAX (ITA 476 OF 2011) (DELHI), [2012 (280) EL T43 (DEL.)] 3. PCIT VS. MARUTI SUZUKI INDIA LIMITED [2 017] 85 TAXMANN.COM 330 (DELHI) 4. MARUTI SUZUKI INDIA LIMITED VS. DCIT [2016] 72 TAXMANN.COM 164 (DEL - TRIB.) ITA NO. 2697/DEL/2014 5. CIT VS. MICRA INDIA (P) LIMITED [2015] 231 TAXMANN 809 (DELHI) 6. CIT VS. DIMENSION APPARELS (P) LIMITED [2015] 370 ITR 288 (DELHI) PAGE | 6 7. SAMSUNG INDIA ELECTRONICS PVT. LTD VS. DCIT (ITA NO. 6452/DEL/2013) (DEL - TRIB.) 8. DCIT VS. SATWAT EXPORTS PVT. LTD (ITA NO. 5963/D/2013) (DEL - TRIB.) 7. IN HIS RIVAL SUBMISSIONS, THE LEARNED DR STRONGLY SUPPORTED THE ORDER OF THE LEARNED CIT(A) AND FURTHER SUBMITTED THAT THE ASSESSEE DID NOT RAISE THE OBJECTIONS EITHER BEFORE THE AO OR BEFORE THE LEARNED CIT(A) AND PARTICIPATED IN THE ASSESSMENT PROCEEDINGS, THEREFORE, IN VIEW OF THE PROVISIONS CONTAINED IN SECTION 292 B OF THE ACT, THE A SSESSEE HAS NO RIGHT TO CHALLENGE THE VALIDITY OF THE ASSESSMENT AT THIS STAGE. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE M/S H EARTLAND DELHI TRANSCRIPTION AND SERVICES PVT. LTD. (HDTS) AMALGAMATED WITH M/S HEARTLAND INFORMATION AND CONSULTANCY PVT. LTD. (HICS) IN PURSUANT TO THE ORDER OF THE HON'BLE DELHI HIGH COURT DATED 25TH JULY, 2008 AND THIS FACT WAS BROUGHT TO THE NOTICE OF THE AO (INCOME TAX OFFICER, WARD - 12 (3), DIRECTOR OF INCOME TAX, TP - 1, NEW DELHI, ADDITIONAL COMMISSIONER OF INCOME TAX - 12 NEW DELHI AND COMMISSIONER OF INCOME TAX - 4, NEW DELHI VIDE SEPARATE LETTERS EACH DATED 19TH OCTOBER, 2008 COPIES OF WHICH ARE PLAC ED AT PAGE 900 TO 907 OF THE ASSESSEE'S PAPER BOOK AND ORDER OF THE HON'BLE DELHI HIGH COURT DATED 25TH JULY, 2008 FOR THE AFORESAID AMALGAMATION IS PLACED AT PAGE NO. 908 TO 918 OF THE ASSESSEE'S PAPER BOOK. IT IS ALSO NOTICED THAT THE AO REFERRED THE MAT TER U/S 92 CA OF THE ACT OF THE AMALGAMATED COMPANY M/S (HDTS) TO THE TPO WHO PASSED THE ORDER DATED 25.10.2010 ON THE AFORESAID ENTITY. THE AO ALSO PASSED THE ASSESSMENT ORDER DATED 22.2.2011 U/S 144C / 143(3) OF THE ACT ON THE AFORESAID ENTITY I.E. HDTS WHICH AMALGAMATED IN HICS, THEREFORE, IT IS CRYSTAL CLEAR THAT THE ENTITY M/S ITA NO. 2697/DEL/2014 (HDTS) WAS NOT IN EXISTENCE WHEN THE TPO AS WELL AS THE AO PASSED THEIR RESPECTIVE ORDER. 9. ON A SIMILAR ISSUE, THE ITAT DELHI BENCH I - 1, NEW DELHI HAVING THE SAME COMBINATION PASSED A DETAILED ORDER AUTHORED BY THE AM IN THE CASE OF MARUTI SUZUKI INDIA LTD. VS. DY. CIT REPORTED IN (2016) 72 TAXMANN.COM. 164. AND THE RELEVANT FINDINGS HAVE BEEN GIVEN AS UNDER: - 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOT H THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL LE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE AMALGAMATING COMPANY M/S POWERTRAIN INDIA LTD. AMALGAMATED WITH M/S MARUTI SUZUKI INDIA LTD. W.E.F. 01.04.2012, AS A OF SCHEME OF A MALGAMATION DULY APPROVED BY THE HON'BLE DELHI HIGH COURT VIDE ORDER DATED 2013 AND THE ASSESSMENT IN THIS HAS BEEN FRAMED BY THE AO VIDE ORDER DATED 03.03.2015. THEREFORE, DEAR THAT WHEN THE ASSESSMENT ORDER WAS PASSED ON 03.03.2015, M/S SUZUKI POWERTRAIN INDIA LTD. LOT INEXISTENCE. IT IS ALSO NOTICED THAT THE AFORESAID FACT WAS IN THE PAGE | 7 KNOWLEDGE OF THE DEPARTMENT AS THE INFORMED VIDE VARIOUS LETTERS MENTIONED IN PARA 5 OF THE FORMER PART OF THIS ORDER WHICH WERE TO THE VARIOUS TAX AUTHORITIES. HOWEVER, THE AO IN SPITE OF KNOWING THIS FACT THAT M/S SUZUKI IN INDIA LTD. AMALGAMATED WITH M/S MARUTI SUZUKI INDIA LTD., MADE THE REFERENCE TO THE TPO AND - SUED THE NOTICE DATED 07.11.2014 TO THE NON - EXISTENT ENTITY I.E. M/S SUZUKI POWERTRAIN INDIA LTD. 11. A SIMILA R ISSUE THE HON'BLE JURISDICTIONAL HIGH COURT IN THE OF MICRA INDIA (P.) LTD. {SUPRA) UNDER: 'IN THE INSTANT CASE, NO DOUBT THERE WAS PARTICIPATION DURING THE COURSE OF ASSESSMENT; HOWEVER, THE ASSESSING OFFICER, DESPITE BEING TOLD THAT THE ORIGINAL COMPA NY WAS NO LONGER IN EXISTENCE, DID NOT LE REMEDIAL MEASURES AND DID NOT TRANSPOSE THE TRANSFEREE AS THE COMPANY WHICH HAD TO BE ASSESSED, INSTEAD, HE RESORTED TO A PECULIAR PROCEDURE OF DESCRIBING THE ORIGINAL ASSESSEE AS THE ONE IN EXISTENCE; ORDER ALSO M ENTIONED THE TRANSFEREE'S NAME BELOW THAT OF ASSESSEE'S COMPANY. NOW, THAT DID NOT TO THE ASSESSMENT BEING COMPLETED IN THE NAME OF THE TRANSFEREE - COMPANY. ACCORDING TO THE SING OFFICER, THE ASSESSEE - COMPANY WAS STILL IN EXISTENCE. CLEARLY, THIS WAS A CAS E WHERE THE ASSESSSMENT WAS CONTRARY TO LAW, AS HAVING BEING COMPLETED AGAINST A NON - EXISTENT COMPANY. THE TRIBUNAL'S DECISION IS, IN THE CIRCUMSTANCES, JUSTIFIED AND WARRANTED.' 12. SIMILARLY, THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SPICE INF OTAINMENT LTD. V. CIT [IT NOS. 475 & 476 OF 2011, DATED 3 - 8 - 2011] HELD AS UNDER: NO DOUBT, M/S SPICE WAS AN ASSESSEE AND AS AN INCORPORATED COMPANY AND WAS IN EXISTENCE WHEN IT THE RETURNS IN RESPECT OF TWO ASSESSMENT ITA NO. 2697/DEL/2014 YEARS IN QUESTIO N. HOWEVER, BEFORE THE CASE COULD BE TED FOR SCRUTINY AND ASSESSMENT PROCEEDINGS COULD BE INITIATED, M/S SPICE GOT AMALGAMATED WITH M CORP PVT. LTD. IT WAS THE RESULT OF THE SCHEME OF THE AMALGAMATION FILED BEFORE THE COMPANY JUDGE OF THIS COURT WHICH WAS DULLY SANCTIONED VIDE ORDERS DATED 11TH FEBRUARY, 2004. WITH THIS AMALGAMATION MADE EFFECTIVE FROM 1ST JULY, 2003, M/S SPICE CEASED TO EXIST. THAT IS THE PLAIN AND LE EFFECT IN LAW. THE SCHEME OF AMALGAMATION ITSELF PROVIDED FOR THIS CONSEQUENCE, INASMUCH AS SIMULTANEOUS WITH THE SANCTIONING OF THE SCHEME, M/S SPICE WAS ALSO STOOD DISSOLVED BY SPECIFIC OF THIS COURT. WITH THE DISSOLUTION OF THIS COMPANY, ITS NAME WAS STRUCK OFF FROM THE ROLLS COMPANIES MAINTAINED BY THE REGISTRAR OF COMPANIES. A COMPANY INC ORPORATED UNDER THE INDIAN COMPANIES ACT IS A JURISTIC PERSON. IT TAKES ITS BIRTH AND GETS LIFE WITH THE INCORPORATION. IT DIES WITH THE DISSOLUTION AS PAGE | 8 PER THE PROVISIONS OF THE COMPANIES ACT. IT IS TRITE LAW THAT ON AMALGAMATION, THE AMALGAMATING COMPANY CEASES TO EXIST IN THE EYES OF LAW. IN VIEW OF THE AFORESAID CLINCHING POSITION IN LAW, IT IS DIFFICULT TO DIGEST THE CIRCUITIOUS ROUTE ADOPTED BY THE TRIBUNAL HOLDING THAT THE ASSESSMENT WAS IN FACT IN THE NAME OF AMALGAMATED COMPANY AND THERE WAS ONLY A PROCEDURAL DEFECT. AFTER THE SANCTION OF THE SCHEME ON 11TH APRIL, 2004, THE SPICE CEASED TO EXIT W.E.F 1ST JULY, 2003. EVEN IF SPICE HAD FILED THE RETURNS, IT BECAME INCUMBENT UPON THE INCOME TAX AUTHORITIES TO SUBSTITUTE THE SUCCESSOR IN PLACE OF THE SAI D 'DEAD PERSON'. WHEN NOTICE UNDER SECTION 143 (2) WAS SENT, THE APPELLANT/AMALGAMATED COMPANY APPEARED AND BROUGHT THIS FACT TO THE KNOWLEDGE OF THE AO. HE, HOWEVER, DID NOT SUBSTITUTE THE NAME OF THE APPELLANT ON RECORD INSTEAD, THE AO MADE THE ASSESSMEN T IN THE NAME OF M/S SPICE WHICH WAS NON - EXISTING ENTITY ON THAT DAY. IN SUCH PROCEEDINGS AND ASSESSMENT ORDER PASSED IN THE NAME OF M/S SPICE WOULD CLEARLY BE VOID SUCH A DEFECT CANNOT BE TREATED AS PROCEDURAL DEFECT. MERE PARTICIPATION BY THE APPELLANT W OULD BE OF NO EFFECT AS THERE IS NO ESTOPPEL AGAINST LAW. ' IT HAS BEEN FURTHER HELD AS UNDER: 'ONCE IT IS FOUND THAT ASSESSMENT IS FRAMED IN THE NAME OF NON - EXISTING ENTITY, IT DOES NOT REMAIN A PROCEDURAL IRREGULARITY OF THE NATURE WHICH COULD BE CURED BY INVOKING THE PROVISIONS OF SECTION 292B. THE FRAMING OF ASSESSMENT AGAINST A NON - EXISTING ENTITY/PERSON GOES TO THE ROOT OF THE MATTER WHICH IS NOT A PROCEDURAL IRREGULARITY BUT A JURISDICTIONAL DEFECT AS THERE CANNOT BE ANY ASSESSMENT AGAINST A 'DEAD P ER SON'.' 11. FURTHER THE ARGUMENT OF THE LD DEPARTMENTAL REPRESENTATIVE THAT THE LD ASSESSING OFFICER HAS CORRECTLY INCORPORATED THE NAME OF THE ASSESSEE COMPANY AND THEREFORE, THE ORDER CANNOT BE SAID TO BE INVALID , HON'BLE DELHI HIGH COURT IN CASE OF PCIT VS. MARUTI SUZUKI PVT. LTD 85 TAXMANN.COM 330 HAS ALSO DEALT WITH THE IDENTICAL ISSUE AND HELD THAT SUCH AN ORDER IS ALSO INVALID. THE ABOVE ISSUE HAS ALSO BEEN CONSIDERED BY THE COORDINATE BENCH IN THE ORDER FOR AY 2007 - 08 IN PARA NO. 10 THEREFORE, THE ARGUMENT OF T HE LD DEPARTMENTAL REPRESENTATIVE IS REJECTED. CONSEQUENTLY, WE ALLOW THE ADDITIONAL GROUND FOR CROSS OBJECTION FILED BY THE ASSESSEE AND HOLD THAT THE ORDER PASSED BY THE LD AO U/S PAGE | 9 143(3) OF THE ACT ON 29.12.2008 ON M/.S HEARTLAND BANGALORE TRANSCRIPTION AND SERVICES PVT LTD IS INVALID AND BAD IN LAW AND THEREFORE, IS QUASHED. 12. CONSEQUENTLY, THE CO OF THE ASSESSEE IS ALLOWED AND APPEAL OF THE REVENUE IN ITA NO. 3008/DEL/2011 IS DISMISSED IN VIEW OF OUR ABOVE FINDING. ORDER PRONOUNCED IN THE OPEN COURT ON 0 9 / 0 3 / 201 8 - S D / - - S D / - ( H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 9 / 0 3 / 2018 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI