DCIT, New Delhi V. M/s. NDC Telecommunications India Pvt. Ltd., New Delhi

ITA 3011/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9014 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2004-2005
• Appeal Filed On: 14-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P SINGH
• Assessee Lawyers: ANANYA KAPOOR S
• Keywords: Question of law; Validity of assessment; Procedural lapse; Reassessment proceedings
• Section: 143(3); 147; 148; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3011/DEL/2015 ASSESSMENT YEAR: 2004-05 DCIT, CIRCLE-18(1), NEW DELHI. VS. NDC TELECOMMUNICATIONS INDIA PVT. LTD., 4, CENTRAL LANE, BENGALI MARKET, NEW DELHI. PAN: AAACN2219C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SALIL KAPOOR & MS ANANYA KAPOOR, ADVOCATES REVENUE BY : SHRI B.P. SINGH, SR.DR DATE OF HEARING : 15.10.2018 DATE OF PRONOUNCEMENT: 16.10.2018 ORDER PER R.K. PANDA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 25 TH FEBRUARY, 2015 OF THE CIT(A)-6,DELHI RELATING TO ASSESSMENT Y EAR 2004-05. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENU E READS AS UNDER:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE & IN LAW, THE LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT REASSESSMEN T CANNOT BE MADE IN THE CASE OF A DISSOLVED COMPANY EVEN FOR THE YEAR I N WHICH THE COMPANY WAS EXISTING. ITA NO.3011/DEL/2015 2 3. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE IS A COMPANY AND FILED ITS RETURN OF INCOME ON 31 ST OCTOBER, 2004 DECLARING LOSS OF RS.11,08,72,956/-. THE ASSESSING OFFICER COMPLETED ASSESSMENT U/S 143(3) O N 29 TH SEPTEMBER, 2006 DETERMINING THE LOSS AT RS.8,78,79,819/-. THEREAFT ER, NOTICE U/S 148 DATED 28 TH MARCH, 2011 WAS ISSUED TO THE ASSESSEE. THE ASSESSEE, IN RESPONSE TO THE STATUTORY NOTICES, APPEARED BEFORE THE ASSESSING OFFICER AND FILED VAR IOUS DETAILS AS CALLED FOR. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT DETERMIN ING THE LOSS AT RS.7,27,32,900/-. 4. BEFORE THE CIT(A), APART FROM CHALLENGING THE AD DITIONS ON MERIT, THE ASSESSEE CHALLENGED THE VALIDITY OF THE NOTICE ISSUED U/S 14 8 OF THE IT ACT. IT WAS ARGUED THAT THE ASSESSEE COMPANY GOT DISSOLVED PURSUANT TO THE ORDER OF THE HON'BLE DELHI HIGH COURT PASSED ON 6 TH AUGUST, 2009 WHEREAS THE NOTICE U/S 148 OF THE IT ACT WAS ISSUED TO THE ASSESSEE ON 28 TH MARCH, 2011. THE COPY OF THE ORDER OF THE HON'BLE DELHI HIGH COURT WAS FILED BEFORE THE CIT(A). IT WAS FURTHER SUBMITTED THAT ALTHOUGH THIS FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER, VID E SUBMISSIONS DATED 26 TH APRIL, 2011, 27 TH MAY, 2011 AND 30 TH SEPTEMBER, 2011, THE ASSESSING OFFICER, IGNORING T HE FACT THAT THE COMPANY DID NOT EXIST ON THE DATE OF ISSUANCE OF THE NOTICE U/S 148, PASSED THE REASSESSMENT ORDER. THEREFORE, THE SAME IS VOID AB INITIO AND INVALID IN LAW. VARIOUS DECISIONS WERE ALSO BROUGHT TO THE NOTICE O F THE CIT(A) TO SUPPORT THE CASE OF THE ASSESSEE. ITA NO.3011/DEL/2015 3 5. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE, THE LD.CIT(A) HELD THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER AND THE CONSEQUENT ASSESSMENT ORDER PASSED IN THE NAME OF THE ASSESSEE IS CLEARLY VOID AB INITIO AND, THEREFORE, HE QUASHED THE SAME. THE RELEVANT OBSERV ATIONS OF THE CIT(A) FROM PARA 4.1 ONWARDS READS AS UNDER:- 4.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE A/R OF THE APPELLANT COMPANY, THE FACTS OF THE CASE AS WELL AS THE FINDINGS OF THE A.O. IN GROUND NO. 1 OF APPEAL THE APPELLANT HAS TAKEN THE PLEA THAT THE AO HAS ERRED BY ISSUING A NOTICE U/S 148 OF THE ACT, 1961 AND INITIATING THE REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT, 19 61 TO A NON-EXISTANT COMPANY AS N DC INDIA HAD BEEN LIQUIDATED VIDE HIGH COURT'S ORDE R DATED 6.8.2009. THE ASSESSEE COMPANY WAS ENGAGED IN THE B USINESS OF EXECUTION OF PROJECTS AND RELATED SERVICES IN TELECOMMUNICATI ON AND INFORMATION TECHNOLOGY SECTOR. THE APPELLANT FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 ON OCTOBER 31, 2004 DEC LARING A LOSS OF RS 110,872,956/- WHICH WAS PROCESSED U/S143(1) DATED 2 4.03.2005. THEREAFTER, THE ASSESSMENT ORDER WAS PASSED BY THE AO UNDER SECTION 143(3) OF THE ACT ON SEPTEMBER 29, 2006. IN THE ASS ESSMENT ORDER, THE AO REDUCED THE BUSINESS LOSS TO RS 87,879,819/- AS AGA INST THE RETURNED BUSINESS LOSS OF RS 110,872,956/-. IN THE MEANWHILE , THE APPELLANT COMPANY WAS DISSOLVED PURSUANT TO THE ORDER OF HON BLE DELHI HIGH COURT PASSED ON AUGUST 6, 2009 AFTER OBTAINING NO OBJECTION CERTIFICATE DATED DECEMBER 8, 2006. THEREAFTER, A NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED BY THE AO TO THE ASSESSEE ON MARCH 28, 2 011. IN REPLY TO THE AO THE ASSESSEE FILED LETTER DATED 26.04.2011 STATI NG THAT ASSESSEE COMPANY DID NOT EXIST AS IT HAS BEEN DISSO LVED PURSUANT TO ORDER OF HONBLE HIGH COURT OF DELHI AND THAT THE NOTICE UND ER SECTION 148 OF THE ACT CANNOT BE ISSUED TO THE NON-EXISTENT COMPANY. T HE ABOVE FACT WAS ALSO BROUGHT TO THE NOTICE OF THE AO BY SUBMISSION DATED 27.05.2011 AND 30.09.2011. THE ASSESSEE ALSO SUBMITTED BEFORE THE AO COPY OF THE ORDER OF HIGH COURT DISSOLVING THE ASSESSEE COMPANY. IT WAS ALSO SUBMITTED BY THE ASSESSEE THAT THE RETURN FILED UNDER SECTION 139(1) OF THE ACT MAY BE CONSIDERED AS THE RETURN FILED IN RESPONSE TO THE N OTICE UNDER SECTION 148. IN RESPONSE TO THE REQUEST OF THE ASSESSEE, REASONS RE CORDED FOR INITIATING RE- ASSESSMENT PROCEEDINGS WAS ALSO PROVIDED TO THE ASS ESSEE BY THE AO. THE OBJECTIONS RAISED BY THE APPELLANT AGAINST THE PROC EEDINGS U/S 147 WERE DULY DISPOSED OFF BY THE AO VIDE ITS ORDER DATED AU GUST 19, 2011. ITA NO.3011/DEL/2015 4 4.2 THE ASSESSEE COMPANY NDC TELECOMMUNICATION INDIA(P )LTD. GOT DISSOLVED PURSUANT TO THE ORDER OF HONBLE DELHI HI GH COURT PASSED ON AUGUST 6, 2009 WHEREAS THE NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO ASSESSEE ON MARCH 28, 2011. THIS FACT WAS BROUGH T TO THE NOTICE OF AO VIDE SUBMISSIONS DATED APRIL 26, 2011, MAY 27, 2011 AND SEPTEMBER 30, 2011. AS NDC INDIA DID NOT EXIST ON THE DATE OF ISS UANCE OF THE CAPTIONED NOTICE I.E. MARCH 28, 2011, THE RE-ASSESSMENT PROCE EDINGS INITIATED BY THE AO AND THE REASSESSMENT ORDER PASSED BY HIM ARE INV ALID IN LAW, VOID AB INITIO AND THUS CANNOT BE ACTED UPON. 4.3 IN CIT VS. EXPRESS NEWSPAPERS LIMITED (40 1TR 38, 57) THE HONBLE MADRAS HIGH COURT HAS HELD THAT THE EXISTE NCE OF AN ASSESSEE IS ESSENTIAL FOR AN ASSESSMENT. THERE CANNOT BE AN ASS ESSMENT OF A NON- EXISTENT PERSON. THE DEFINITION OF THE WORD ASSESS EE IN THE ACT WOULD OBVIOUSLY APPLY TO A LIVING PERSON. THE ASSESSMENT MADE LONG AFTER A COMPANY WAS STRUCK OFF FROM THE REGISTER OF THE COM PANIES IS NOT VALID. THE AFORESAID DECISION OF THE HONBLE MADRAS HIGH C OURT HAS BEEN AFFIRMED BY THE HONBLE SUPREME COURT IN CIT VS. EXPRESS NEW SPAPERS LIMITED [53 ITR 250 (SC)]. 4.4 IN HEWLETT PACKARD INDIA (P) LTD VS. ACIT (ITA NO. 4016/DEL/05) (ITAT DELHI) THE HONBLE DELHI TRIBUNAL HAS HELD TH AT NO ORDER CAN BE PASSED ON A NON EXISTING COMPANY. WHILE PASSING THE SAID ORDER, THE HONBLE TRIBUNAL REFERRED TO ITS EARLIER DECISION I N THE CASE OF IMPSAT (P) LTD VS. ITO (91 ITD 354) (DEL) WHEREIN IT WAS HELD THAT EXISTENCE OF THE PERSON SOUGHT TO BE TAXED AT THE POINT OF MAKING TH E ASSESSMENT IS A CONDITION FOR THE VALIDITY OF THE ASSESSMENT. 4.5 IN MODI CORP LTD VS. JCIT (ITA NO. 211/DEL/2001) (I TAT DELHI) THE HONBLE TRIBUNAL HAS OBSERVED AS UNDER: IN VIEW OF THE LEGAL POSITION AS LAID DOWN IN THE AFORESAID DECISIONS, IT IS CLEAR THAT THE ASSESSMENT MADE IN THE PRESENT CASE IN THE NAME OF M/S CALCUTTA INSTALMENTS COMPANY (P. ) LTD AFTER THE DATE OF ITS DISSOLUTION WAS NOT VALID. THE FACT THAT THIS COMPANY FILED A RETURN OF INCOME IS NOT OF ANY CONS EQUENCE. THE ASSESSMENT IS, THEREFORE, HELD TO BE INVALID AND IS CANCELLED. IN VIEW OF OUR FINDING THAT THE ASSESSMENT IS NULL AND VOID, ALL THE OTHER ISSUES RAISED IN THE ASSESSEES APPEAL AS WEL L AS ITS CROSS- OBJECTION AND THE GROUNDS RAISED BY REVENUE IN BOTH ITS APPEALS DO NOT CALL FOR ANY ADJUDICATION. THEY ARE, THEREFO RE, DISMISSED AS INFRUCTUOUS ITA NO.3011/DEL/2015 5 4.6 HON'BLE JURISDICTIONAL HIGH COURT HAS ALSO CONSIDE RED THE IDENTICAL ISSUE IN THE CASE OF SPICE ENTERTAINMENT LTD. (SUPR A) AND HELD AS UNDER:- '11. AFTER THE SANCTION OF THE SCHEME ON 11TH APRIL , 2004, THE SPICE CEASES TO EXIST W.E.F. 1ST JULY, 2003. EVEN I F SPICE HAD FILED THE RETURNS, IT BECAME INCUMBENT UPON THE INCOME TA X AUTHORITIES TO SUBSTITUTE THE SUCCESSOR IN PLACE OF THE SAID DE AD PERSON. WHEN NOTICE UNDER SECTION 143(2) WAS SENT, THE APPELLANT /AMALGAMATED COMPANY APPEARED AND BROUGHT THIS FACT TO THE KNOWL EDGE OF THE AO. HE, HOWEVER, DID NOT SUBSTITUTE THE NAME OF THE APPELLANT ON RECORD. INSTEAD, THE ASSESSING ITA 475/2011 & ITA- 476/2011 PAGE 9 OF 13 OFFICER MADE THE ASSESSMENT IN THE NAM E 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 B E TREATED AS PROCEDURAL DEFECT. MERE PARTICIPATION BY THE APPELL ANT WOULD BE OF NO EFFECT AS THERE IS NO ESTOPPEL AGAINST LAW.' 4.7 IN IMPSAT (P) LTD. VS. INCOME TAX OFFICER (2005) 9 2 TTJ (DEL) 552 : (2004) 91 ITD 354 (DEL) (ITAT DELHI) HONBLE DELH I TRIBUNAL HELD AS UNDER: IT IS THUS CLEAR THAT IN THE PRESENT CASE THE ASS ESSEE-COMPANY CEASED TO EXIST AFTER BEING DISSOLVED UNDER S. 560. ONCE IT CEASED TO EXIST, THERE WAS NO QUESTION OF ASSESSING IT FOR INCOME-TAX, AS IT APPEARS THAT THERE IS NO PROVISION IN THE PRESENT A CT TO ASSESS A COMPANY WHICH IS DISSOLVED. OUR ATTENTION WAS NOT D RAWN TO ANY PROVISION IN THE ACT ENABLING THE AO TO DO SO. SEC. 159 OF THE PRESENT ACT DOES NOT CURE THE LACUNA IF THE COMPANY IS NOT IN EXISTENCE AT THE TIME OF M AKING THE ASSESSMENT, NO ORDER OF ASSESSMENT CAN BE VALIDLY P ASSED UPON IT UNDER THE IT ACT AND IF ONE IS PASSED, IT MUST BE A NULLITY. 4.8 IN COMMISSIONER OF INCOME TAX VS VIVED MARKETING S ERVICING PVT. LTD. - ITA NO.273/2009 - HON'BLE DELHI HIGH CO URT HELD 'WHEN THE ASSESSING OFFICER PASSED THE ORDER OF ASS ESSMENT AGAINST THE RESPONDENT COMPANY, IT HAD ALREADY BEEN DISSOLVED AND STRUCK OFF THE REGISTER OF THE REGISTRAR OF COM PANIES U/S 560 OF THE COMPANIES ACT. IN THESE CIRCUMSTANCES, THE T RIBUNAL RIGHTLY HELD THAT THERE COULD NOT HAVE BEEN ANY ASS ESSMSENT ORDER PASSED AGAINST THE COMPANY WHICH WAS NOT IN EXISTEN CE AS ON THAT ITA NO.3011/DEL/2015 6 DATE IN THE EYES OF LA\Y IT HAD ALREADY BEEN DISSOL VED. THE TRIBUNAL RELIED UPON ITS EARLIER DECISION IN IMPSAT PVT. LTD. VS. ITO 276 ITR 136 (AT). WE ARE OF THE OPINION THAT THE VIEW TAKEN BY THE TR IBUNAL IS PERFECTLY VALID AND IN ACCORDANCE WITH LAW. NO SUBS TANTIAL QUESTION OF LAW ARISE.' 4.9 THE FACTS IN THE CASE OF THE ASSESSEE ARE IDENT ICAL AND, THEREFORE, THE RATIO OF THE ABOVE DECISION OF HON'BLE COURTS WOULD BE SQUARELY APPLICABLE. A COMPANY, INCORPORATED UNDER THE INDIAN COMPANIES ACT IS A JURIDICAL PERSON. IT TAKE ITS BIRTH AND GETS LIFE WITH INCORP ORATION. IT DIES WITH THE DISSOLUTIONS AS PER THE PROVISION OF THE COMPANIES ACT. HAVING REGARD TO THIS CONSEQUENCE PROVIDED IN LAW, ASSESSMENT UPON A DISSOLVED COMPANY IS IMPERMISSIBLE AS THERE IS NO PROVISION IN INCOME TA X TO MAKE AN ASSESSMENT THEREUPON. THEREFORE, ASSESSMENT ON A COMPANY WHICH HAS BEEN DISSOLVED UNDER THE COMPANIES ACT, 1956, IS INVALID. THERE IS NO PROVISION IN THE I. T. ACT, TO MAKE ASSESSMENT ON DISSOLVED COMPANY. WHEN NOTICE U/S 148 WAS ISSUED AND SERVED AND WHEN THE ASSESSMENT WAS MADE, THE ASSESSEE WAS A NON-EXISTING ENTITY. THEREFORE, THE PROCEEDINGS INI TIATED U/S 147 AND THE CONSEQUENT ASSESSMENT ORDER PASSED IN THE NAME OF T HE ASSESSEE IS CLEARLY VOID AB INITIO AND AS SUCH THE SAME IS QUASHED. ONC E THE ASSESSMENT ORDER ITSELF IS QUASHED, VARIOUS ADDITIONS MADE BY THE AS SESSING OFFICER DO NOT SURVIVE. THEREFORE, I DO NOT FIND THE NEED TO ADJUD ICATE THE OTHER GROUNDS OF APPEAL. 6. AGGRIEVED WITH THE SAID ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, FILED A SERIES OF DECISIONS AND SUBMITTED THAT THE RE-ASSESSMENT PROCEEDINGS INITIA TED AGAINST A DISSOLVED COMPANY/NON-EXISTENT COMPANY IS VOID AB INITIO . THEREFORE, THIS BEING A COVERED MATTER IN VIEW OF THE VARIOUS DECISIONS INCLUDING T HE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF SPICE ENTERTAINMENT LTD. VS. CIT 247 CTR 500 (DEL) AND CIT VS. DIMENSION APPARELS PVT. LTD., 370 ITR 288 ( DEL), THE GROUND RAISED BY THE ITA NO.3011/DEL/2015 7 REVENUE SHOULD BE DISMISSED. THE LD. DR, ON THE OTH ER HAND, HEAVILY RELIED ON THE ORDER OF THE ASSESSING OFFICER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THE L D.CIT(A) QUASHED THE REASSESSMENT PROCEEDINGS ON THE GROUND THAT THE SAME HAS BEEN IN ITIATED ON A NON-EXISTING ENTITY AND, THEREFORE, THE REASSESSMENT PROCEEDINGS ARE VOID AB INITIO . WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. WE FIND THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF VERTEX CUSTOMER MANAGEMENT INDIA PVT. LTD. VS. DCIT VIDE ITA NO.966/DEL/2016, ORDER DATED 6 TH JULY, 2018 , HAS DECIDED AN IDENTICAL ISSUE AND QUASHED THE ASSESSMENT ON THE GROUND THAT ASSESSMEN T HAS BEEN FRAMED ON A NON- EXISTENT COMPANY. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL FROM PARA 10 ONWARDS READ AS UNDER:- 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. IT IS AN ADMITTED FACT THAT THE HON'BLE HIGH COURTS ORDER IN RELATION TO AMALGAMATION WAS PASSED EFFECTIVE ON 01 .04.2011 WHEREIN VERTEX CUSTOMER SERVICES INDIA PVT. LTD. I.E. ORIGI NAL ENTITY WAS MERGED WITH VERTEX CUSTOMER MANAGEMENT INDIA PRIVATE LIMIT ED I.E. THE NEW ENTITY. FROM THE DETAILS FILED BY THE ASSESSEE IN T HE PAPER BOOK, WE FIND THE ASSESSEE VIDE LETTER DATED 18.07.2014 FILED THE FACT OF AMALGAMATION BEFORE THE TPO. FURTHER FROM PAGE 134 OF THE PAPER BOOK, WE FIND THE ASSESSEE VIDE LETTER DATED 08.12.2014 SUBMITTED BEF ORE THE TPO REGARDING THE FACT OF AMALGAMATION. HOWEVER, WE FIND FROM THE ORDER OF THE TPO THAT THE TPO VIDE ORDER DATED 21.01.2015 HAS PASSED THE ORDER IN THE NAME OF THE ASSESSEE M/S VERTEX CUSTOMER SERVICES PRIVAT E LIMITED. FURTHER FROM PAGE 2 TO 26 OF THE PAPER BOOK, WE FIND THE AS SESSEE VIDE LETTER DATED 23.02.2015 HAS SUBMITTED BEFORE THE ASSESSING OFFIC ER INFORMING THE FACT OF AMALGAMATION. WE FIND FROM PAGE 148 OF THE PAPER BOOK THAT THE DRAFT ASSESSMENT ORDER WAS PASSED ON 10.03.2015 IN THE NA ME OF THE ORIGINAL ENTITY NAMELY M/S VERTEX CUSTOMER SERVICES PRIVATE LIMITED. WE FIND ITA NO.3011/DEL/2015 8 FROM PAGE 38 OF THE APPEAL SET THAT THE ASSESSEE IN HIS OBJECTION BEFORE THE DRP HAS FILED THE SAME IN THE NAME OF THE MERGED/NE W ENTITY I.E. VERTEX CUSTOMER MANAGEMENT INDIA PRIVATE LIMITED. WE FIND THE DRP VIDE ORDER DATED 21.09.2015 HAD PASSED THE ORDER IN THE NAME O F M/S VERTEX CUSTOMER MANAGEMENT INDIA PRIVATE LIMITED I.E. NEW ENTITY. HOWEVER, WE FIND FROM THE FINAL ASSESSMENT ORDER DATED 23.10.20 15 THAT THE ORDER HAS BEEN PASSED IN THE NAME OF M/S VERTEX CUSTOMER SERV ICES INDIA PRIVATE LIMITED. THE ABOVE SEQUENCE OF EVENTS SHOWS THAT DE SPITE THE ASSESSING OFFICER BEING INTIMATED/INFORMED ABOVE FACT OF AMAL GAMATION STILL THE ASSESSING OFFICER CHOOSES TO PASS THE ASSESSMENT OR DER IN THE NAME OF THE NON-EXISTENT COMPANY. THEREFORE, WE FIND MERIT IN T HE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE THE ORDER HAS B EEN PASSED IN THE NAME OF A NON-EXISTENT COMPANY, THEREFORE, THE SAME HAS TO BE QUASHED AND THE PROVISIONS OF SECTION 292B WILL NOT COME TO THE RES CUE OF THE DEPARTMENT. 11. WE FIND THE HONBLE DELHI HIGH COURT IN THE CAS E OF SPICE ENTERTAINMENT LTD. (SUPRA) HAS OBSERVED AS UNDER :- 12. ONCE IT IS FOUND THAT ASSESSMENT IS FRAMED IN THE NAME OF NON-EXISTING ENTITY, IT DOES NOT REMAIN A PROCEDURA L IRREGULARITY OF THE NATURE WHICH COULD BE CURED BY INVOKING THE PRO VISIONS OF SECTION 292BOF THE ACT. SECTION 292B OF THE ACT REA DS AS UNDER:- '292B. NO RETURN OF INCOME ASSESSMENT, NOTICE, SUMM ONS OR OTHER PROCEEDINGS FURNISHED OR MADE OR ISSUE OR TAK EN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT SHAL L BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASONS OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOME, ASSESS MENT, NOTICE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOM E, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDINGS IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE I NTENT AND PURPOSE OF THIS ACT.' 13. THE PUNJAB & HARYANA HIGH COURT STATED THE EFFE CT OF THIS PROVISION IN CIT VS. NORTON MOTORS, 275 ITR 595 IN THE FOLLOWING MANNER:- 'A READING OF THE ABOVE REPRODUCED PROVISION MAKES IT CLEAR THAT A MISTAKE, DEFECT OR OMISSION IN THE RETURN OF INCO ME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS NOT SUFFICIE NT TO INVALIDATE AN ACTION TAKEN BY THE COMPETENT AUTHORI TY, PROVIDED THAT SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUM MONS OR OTHER ITA NO.3011/DEL/2015 9 PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE PROVISIONS OF THE ACT. TO PUT IT D IFFERENTLY, SECTION 292B CAN BE RELIED UPON FOR RESISTING A CHA LLENGE TO THE NOTICE, ETC., ONLY IF THERE IS A TECHNICAL DEFECT O R OMISSION IN IT. HOWEVER, THERE IS NOTHING IN THE PLAIN LANGUAGE OF THAT SECTION FROM WHICH IT CAN BE INFERRED THAT THE SAME CAN BE RELIED UPON FOR CURING A JURISDICTIONAL DEFECT IN THE ASSESSMENT NO TICE, SUMMONS OR OTHER PROCEEDING. IN OTHER WORDS, IF THE NOTICE, SUMMONS OR OTHER PROCEEDING TAKEN BY AN AUTHORITY SUFFERS FROM AN INHERENT LACUNA AFFECTING HIS/ITS JURISDICTION, THE SAME CAN NOT BE CURED BY HAVING RESORT TO SECTION 292B. 14. THE ISSUE AGAIN CROPPED UP BEFORE THE COURT IN CIT VS. HARJINDER KAUR (2009) 222 CTR 254 (P&H). THAT WAS A CASE WHERE RETURN IN QUESTION FILED BY THE ASSESSEE WAS NEITHER SIGNED BY THE ASSESSEE NOR VERIFIED IN TERMS OF THE MANDAT E OF SECTION 140 OF THE ACT. THE COURT WAS OF THE OPINION THAT S UCH A RETURN CANNOT BE TREATED AS RETURN EVEN A RETURN FILED BY THE ASSESSEE AND THIS INHERENT DEFECT COULD NOT BE CURED INSPITE OF THE DEEMING EFFECT OF SECTION 292B OF THE ACT. THEREFORE, THE R ETURN WAS ABSOLUTELY INVALID AND ASSESSMENT COULD NOT BE MADE ON A INVALID RETURN. IN THE PROCESS, THE COURT OBSERVED AS UNDER :- 'HAVING GIVEN OUR THOUGHTFUL CONSIDERATION TO THE S UBMISSION ADVANCED BY THE LEARNED COUNSEL FOR THE APPELLANT, WE ARE OF THE VIEW THAT THE PROVISIONS OF SECTION 292B OF THE 196 1 ACT DO NOT AUTHORIZE THE AO TO IGNORE A DEFECT OF A SUBSTANTIV E NATURE AND IT IS, THEREFORE, THAT THE AFORESAID PROVISION CATEGOR ICALLY RECORDS THAT A RETURN WOULD NOT BE TREATED AS INVALID, IF T HE SAME 'IN SUBSTANCE AND EFFECT IS IN CONFORMITY WITH OR ACCOR DING TO THE INTENT AND PURPOSE OF THIS ACT'. INSOFAR AS THE RET URN UNDER REFERENCE IS CONCERNED, IN TERMS OF SECTION 140 OF THE 1961 ACT, THE SAME CANNOT BE TREATED TO BE EVEN A RETURN FILE D BY THE RESPONDENT ASSESSEE, AS THE SAME DOES NOT EVEN BEAR HER SIGNATURES AND HAD NOT EVEN BEEN VERIFIED BY HER. I N THE AFORESAID VIEW OF THE MATTER, IT IS NOT POSSIBLE FOR US TO AC CEPT THAT THE RETURN ALLEGEDLY FILED BY THE ASSESSEE WAS IN SUBST ANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND P URPOSE OF THIS ACT. THUS VIEWED, IT IS NOT POSSIBLE FOR US TO ACCE PT THE CONTENTION ADVANCED BY THE LEARNED COUNSEL FOR THE APPELLANT ON THE BASIS OF SECTION 292B OF THE 1961 ACT. THE RETU RN UNDER REFERENCE, WHICH HAD BEEN TAKEN INTO CONSIDERATION BY THE REVENUE, WAS AN ABSOLUTELY INVALID RETURN AS IT HAD A GLARING ITA NO.3011/DEL/2015 10 INHERENT DEFECT WHICH COULD NOT BE CURED IN SPITE O F THE DEEMING EFFECT OF SECTION 292B OF THE 1961 ACT.' 15. LIKEWISE, IN THE CASE OF SRI NATH SURESH CHAND RAM NARESH VS. CIT (2006) 280 ITR 396, THE ALLAHABAD HIGH COUR T HELD THAT THE ISSUE OF NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT IS A CONDITION PRECEDENT TO THE VALIDITY OF ANY ASSESSME NT ORDER TO BE PASSED UNDER SECTION 147 OF THE ACT AND WHEN SUCH A NOTICE IS NOT ISSUED AND ASSESSMENT MADE, SUCH A DEFECT CANNOT BE TREATED AS CURED UNDER SECTION 292B OF THE ACT. THE COURT OBSE RVED THAT THIS PROVISIONS CONDONES THE INVALIDITY WHICH ARISE S MERELY BY MISTAKE, DEFECT OR OMISSION IN A NOTICE, IF IN SUBS TANCE AND EFFECT IT IS IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. SINCE NO VALID NOTICE WAS SERVED ON THE A SSESSEE TO REASSESS THE INCOME, ALL THE CONSEQUENT PROCEEDINGS WERE NULL AND VOID AND IT WAS NOT A CASE OF IRREGULARITY. THE REFORE, SECTION 292B OF THE ACT HAD NO APPLICATION. 16. WHEN WE APPLY THE RATIO OF AFORESAID CASES TO T HE FACTS OF THIS CASE, THE IRRESISTIBLE CONCLUSION WOULD BE PROVISIO NS OF SECTION 292B OF THE ACT ARE NOT APPLICABLE IN SUCH A CASE. THE FRAMING OF ASSESSMENT AGAINST A NON-EXISTING ENTITY/PERSON GOE S TO THE ROOT OF THE MATTER WHICH IS NOT A PROCEDURAL IRREGULARIT Y BUT A JURISDICTIONAL DEFECT AS THERE CANNOT BE ANY ASSESS MENT AGAINST A DEAD PERSON . 17. THE ORDER OF THE TRIBUNAL IS, THEREFORE, CLEARL Y UNSUSTAINABLE. WE, THUS, DECIDE THE QUESTIONS OF LAW IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE AND ALLOW THESE APPEALS. 18. WE MAY, HOWEVER, POINT OUT THAT THE RETURNS WER E FILED BY M/S SPICE ON THE DAY WHEN IT WAS IN EXISTENCE IT WO ULD BE PERMISSIBLE TO CARRY OUT THE ASSESSMENT ON THE BASI S OF THOSE RETURNS AFTER TAKING THE PROCEEDINGS AFRESH FROM TH E STAGE OF ISSUANCE OF NOTICE UNDER SECTION 143 (2) OF THE ACT . IN THESE CIRCUMSTANCES, IT WOULD BE INCUMBENT UPON THE AO TO FIRST SUBSTITUTE THE NAME OF THE APPELLANT IN PLACE OF M/ S SPICE AND THEN ISSUE NOTICE TO THE APPELLANT. HOWEVER, SUCH A COURSE OF ACTION CAN BE TAKEN BY THE AO ONLY IF IT IS STILL P ERMISSIBLE AS PER LAW AND HAS NOT BECOME TIME BARRED. ITA NO.3011/DEL/2015 11 12. WE FIND THE SLP FILED BY THE REVENUE IN THE CAS E OF SPICE ENTERTAINMENT LTD. (SUPRA) HAS BEEN DISMISSED BY TH E HON'BLE SUPREME COURT VIDE CIVIL APPEAL NO.285 OF 2014 ORDER DATED 02.11.2017. 13. WE FIND THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. DIMENSION APPARELS (P.) LTD. REPORTED IN 370 ITR 28 8 FOLLOWING ITS EARLIER DECISION IN THE CASE OF SPICE ENTERTAINMENT LTD. (S UPRA) HAS OBSERVED AS UNDER :- 19. THE QUESTION OF WHETHER AN ASSESSMENT UPON AN AMALGAMATED COMPANY IS A MISTAKE WITHIN THE MEANING OF SECTION 292B WAS RAISED AND ANSWERED BY THE DELHI HIGH COURT IN SPIC E ENTERTAINMENT LTD. (SUPRA). IN THAT CASE, THE TRIBU NAL HAD HELD THAT 'THE ASSESSMENT IN SUBSTANCE AND EFFECT HAS BEEN M ADE AGAINST AMALGAMATED COMPANY IN RESPECT OF ASSESSMENT OF INC OME OF AMALGAMATING COMPANY FOR THE PERIOD PRIOR TO AMALGA MATION AND MERE OMISSION TO MENTION THE NAME OF AMALGAMATED CO MPANY ALONGWITH THE NAME OF AMALGAMATING COMPANY IN THE B ODY OF ASSESSMENT AGAINST THE ITEM 'NAME OF THE ASSESSEE' IS NOT FATAL TO THE VALIDITY OF ASSESSMENT BUT IS A PROCEDURAL DEFE CT COVERED BY SECTION 292B OF THE ACT.' (EMPHASIS SUPPLIED) 20. THIS COURT REJECTED THIS ARGUMENT, HOLDING THAT 'IT [BECOMES] INCUMBENT UPON THE INCOME TAX AUTHORI TIES TO SUBSTITUTE THE SUCCESSOR IN PLACE OF THE SAID 'DEAD PERSON'. SUCH A DEFECT CANNOT BE TREATED AS PROCEDURAL DEFECT... ON CE IT IS FOUND THAT ASSESSMENT IS FRAMED IN THE NAME OF NON-EXISTING EN TITY IT DOES NOT REMAIN A PROCEDURAL IRREGULARITY OF THE NATURE WHIC H COULD BE CURED BY INVOKING THE PROVISIONS OF SECTION 292B OF THE ACT.' (EMPHASIS SUPPLIED) 21. IN SPICE ENTERTAINMENT LTD. (SUPRA) THE REASON FOR THE INAPPLICABILITY OF SECTION 292-B WAS ADDITIONALLY P REMISED ON THE DECISION OF THE PUNJAB & HARYANA HIGH COURT IN CIT V. NORTON MOTOR, [2005] 275 ITR 595/146 TAXMAN 701, THAT WHIL E SECTION 292B CAN CURE TECHNICAL DEFECTS, IT CANNOT CURE A ' JURISDICTIONAL DEFECT IN THE ASSESSMENT NOTICE.'IN SPICE ENTERTAIN MENT LTD. (SUPRA), THEREFORE, THIS COURT EXPRESSLY CLASSIFIED 'THE FRAMING OF ASSESSMENT AGAINST A NON-EXISTING ENTITY/PERSON' AS A JURISDICTIONAL DEFECT. THIS HAS BEEN A CONSISTENT POSITION. AS EAR LY AS 1960, IN ITA NO.3011/DEL/2015 12 CIT V. EXPRESS NEWSPAPERS LTD. [1960] 40 ITR 38 (MA D), THE MADRAS HIGH COURT HELD THAT 'THERE CANNOT BE AN ASSESSMENT OF NON-EXISTENT PERS ON. THE ASSESSMENT IN THE INSTANT CASE WAS MADE LONG AFTER THE FREE PRESS COMPANY WAS STUCK OFF FROM THE REGISTER OF THE COMP ANIES, AND IT COULD NOT BE VALID.' (EMPHASIS SUPPLIED) 22. ON THE LAST CONTENTION, I.E WITH RESPECT TO PAR TICIPATION BY THE PREVIOUS ASSESSEE, I.E THE AMALGAMATING COMPANY (WH ICH CEASES TO EXIST), AGAIN SPICE ENTERTAINMENT LTD. (SUPRA) IS C ATEGORICAL; IT WAS RULED ON THAT OCCASION THAT SUCH PARTICIPATION BY T HE AMALGAMATED COMPANY IN PROCEEDINGS DID NOT CURE THE DEFECT, BEC AUSE 'THERE CAN BE NO ESTOPPEL IN LAW.' VIVED MARKETING SERVICI NG (P.) LTD. (SUPRA) HAD ALSO REACHED THE SAME CONCLUSION. 23. IT IS THUS CLEAR THAT ALL CONTENTIONS SOUGHT TO BE URGED BY THE REVENUE ARE IN RESPECT OF FAMILIAR GROUNDS, WHICH H AVE BEEN RULED UPON, AGAINST IT, CONSISTENTLY IN TWO DECISIONS OF THIS COURT. THEREFORE, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL. 24. ACCORDINGLY, THERE IS NO MERIT IN THE APPEALS; THEY ARE ACCORDINGLY DISMISSED ALONG WITH THE PENDING APPLIC ATIONS WITHOUT ANY ORDER AS TO COSTS. 14. SINCE IN THE INSTANT CASE ALSO THE ASSESSMENT H AS BEEN FRAMED ON A NONEXISTENT COMPANY, THEREFORE, FOLLOWING THE DECIS IONS OF THE JURISDICTIONAL HIGH COURT CITED (SUPRA), WE HOLD TH AT SUCH ASSESSMENT IS A NULLITY IN THE EYES OF LAW. THEREFORE, THE SAME IS QUASHED. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 15. SINCE THE ASSESSEE SUCCEEDS ON THIS LEGAL GROUN D, THE OTHER GROUNDS BEING ACADEMIC IN NATURE ARE NOT BEING ADJUDICATED. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 9. SIMILAR VIEW WAS TAKEN BY THE TRIBUNAL IN THE CA SE OF M/S SONY MOBILE COMMUNICATIONS INDIA (P) LTD. VS. DCIT VIDE ITA NO. 554/DEL/2015, ORDER DATED 6 TH JULY, 2018. SINCE, IN THE INSTANT CASE, THE ASSESSING OFFICER HAS ISSUED NOTICE U/S 148 ON A NON-EXISTENT COMPANY AS THE ASSESSEE COMPANY H AS BEEN LIQUIDATED VIDE THE ORDER ITA NO.3011/DEL/2015 13 OF THE HON'BLE HIGH COURT DATED 06.08.2009, THEREFO RE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) QUASHING THE RE-ASSESSMENT PROCEEDINGS. WE, THEREFORE, UPHOLD THE SAME. THE GROUND RAISED BY THE REVENUE IS, ACCORDINGLY, DISMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE RE VENUE IS DISMISSED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 6.10.2018. SD/- SD/- (KULDIP SINGH) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMF BER DATED: 16 TH OCTOBER, 2018 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI