ITO, Ooty V. The Kilkotagiri Tea & Coffee Estates Company Ltd., Nilgiris

ITA 380/CHNY/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3977 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-10-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 19-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: K RAGHU
• Section: 143(3)

Judgement Text

, / / / , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . . ! '# , $ %& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.380/MDS/2016 ' (' /ASSESSMENT YEAR : 2012-13 THE INCOME TAX OFFICER, WARD -2, INCOME TAX OFFICE, OOTY. V. THE KILKOTAGIRI TEA & COFFEE ESTATES COMPANY LTD., KILKOTAGIRI ESTATE, KILKOTAGIRI POST, NILGIRIS 643 216. PAN: AAACT 7563 J ( )* /APPELLANT) ( +,)* /RESPONDENT) )* - . /APPELLANT BY : SHRI SUPRIYO PAL, JCIT +,)*-. /RESPONDENT BY : SHRI K.RAGHU, C.A. ! -/$ /DATE OF HEARING : 17.10.2016 01( -/$ /DATE OF PRONOUNCEMENT : 23.11.2016 /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-3, COIMBATORE DATED 16.11.2015 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2 I.T.A. NO.380/MDS/2016 2. SHI SUPRIYO PAL, THE LEARNED DEPARTMENT REPRESEN TATIVE SUBMITTED THAT THE ASSESSEE THE KILKOTAGIRI TEA & COFFEE EST ATES COMPANY LTD. FILED RETURN OF INCOME ON 27.09.2012. THE ASSESSING OFFICER FRAMED THE ASSESSMENT UNDER SECTION 143(3) AFTER HEARING THE A SSESSEE. THE ASSESSEE HOWEVER FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) FOUND THAT THE ASSESSEE THE KILKOTAGIRI TEA & COFFEE EST ATES COMPANY LTD. WAS AMALGAMATED WITH THE THIRUMBADI RUBBER COMPANY LIMITED WITH EFFECT FROM 01.04.2012. THEREFORE, THE ASSESSMENT O RDER PASSED AGAINST THE NONEXISTENT COMPANY NAMELY THE KILKOTA GIRI TEA & COFFEE ESTATES COMPANY LTD. CANNOT STAND IN THE EYE OF LA W. ACCORDING TO THE LEARNED REPRESENTATIVE, THE ASSESSEE FILED THE RETU RN OF INCOME. THEREFORE, THE ASSESSMENT MADE AGAINST THE KILKOTA GIRI TEA & COFFEE ESTATES COMPANY LTD. IS JUSTIFIED. SINCE THE CIT(A ) HAS NOT DISCLOSED ANYTHING ON MERIT, THE LEARNED REPRESENTATIVE SUBMI TTED THAT THE MATTER REMITTED BACK TO THE FILE OF THE CIT(A) FOR RECONSI DERATION. 3. ON THE CONTRARY, SHRI K.RAGHU, THE LEARNED REPRE SENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE KILKOTAGIRI TEA & COFF EE ESTATES COMPANY LTD. WAS AMALGAMATED WITH THE THIRUMBADI RUBBER C OMPANY LIMITED WITH EFFECT FROM 01.04.2012. THIS FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER BY A LETTER DATED 11.12.2013. THE LEARNED REPRESENTATIVE FURTHER CLARIFIED THAT WHEN THE RETU RN OF INCOME WAS FILED 3 I.T.A. NO.380/MDS/2016 THE AMALGAMATION PROCEEDINGS ARE PENDING BEFORE THE HIGH COURT. THE HIGH COURT APPROVED THE AMALGAMATION WITH EFFECT FR OM 01.04.2012. IMMEDIATELY, THE SAME WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER. INSPITE OF THAT THE ASSESSING OFFICER FRAM ED THE ASSESSMENT AGAINST THE COMPANY WHICH IS NOT IN EXISTENCE ON TH E DATE OF THE ORDER. THEREFORE, THE CIT(A) BY PLACING ITS RELIANCE ON TH E JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT-II VS. M/S.MICR ON STEELS PVT.LTD. (372 ITR 386) FOUND THAT MERELY BECAUSE THE ASSESSE E PARTICIPATED IN THE PROCEEDINGS, THAT WOULD BE OF NO EFFECT AS THER E WAS NO ESTOPPEL AGAINST LAW. 4. REFERRING TO THE JUDGMENT OF THE DELHI HIGH COUR T IN CIT VS. DIMENSION APPARELS LTD. REPORTED IN (2015) 370 ITR 288, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE DELHI HIGH COURT FOUND THAT IN THE CASE OF AMALGAMATION, THE ASSESSM ENT MUST BE MADE ON THE SUCCESSOR COMPANY. THE DELHI HIGH COURT FURT HER FOUND THAT THE LANGUAGE OF SECTION 159 OF THE INCOME TAX ACT APPLI ES ONLY TO NATURAL PERSONS, AND CANNOT BE EXTENDED, TO THE DISSOLUTION OF COMPANIES. THEREFORE, THE CIT(A) HAS RIGHTLY FOUND THAT THE AS SESSMENT MADE ON NONEXISTENT COMPANY IS VOID. 4 I.T.A. NO.380/MDS/2016 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE KILKOTAGIRI TEA & COFFEE ESTATES COMPANY LTD. WAS AMALGAMATED WITH THE THIRUMBADI RUBBER COMPANY LIM ITED WITH EFFECT FROM 01.04.2012. ONCE THE COMPANY WAS AMALGA MATED WITH ANOTHER COMPANY, IT BECOMES NONEXISTENT AND THEREFO RE NO ACTION CAN BE BROUGHT IN ITS NAME. THE FACT OF AMALGAMATION WI TH EFFECT FROM 01.04.2012 WAS BROUGHT TO THE NOTICE OF THE ASSESSI NG OFFICER BY THE ASSESSEE BY A LETTER DATED 11.12.2013. INSPITE OF T HAT THE ASSESSING OFFICER FRAMED THE ASSESSMENT AGAINST THE COMPANY W HICH IS NOT IN EXISTENT ON THE DATE OF THE ORDER. THEREFORE, THE C IT(A) HAS RIGHTLY FOUND THAT THE ASSESSMENT FRAMED AGAINST NONEXISTEN T COMPANY CANNOT STAND IN THE EYE OF LAW. THEREFORE, THIS TRIBUNAL I S OF THE CONSIDERED OPINION THAT THE DEFECT CANNOT BE RECTIFIED BY THE REVENUE AT THIS STAGE. 6. WE HAVE ALSO CAREFULLY GONE THROUGH THE DELHI HI GH COURT JUDGMENT IN THE CASE OF DIMENSION APPARELS LTD. (SU PRA). THE DELHI HIGH COURT AFTER REFERRING TO THE JUDGMENT OF THE A PEX COURT IN THE SARASWATI INDUSTRIAL SYNDICATE LTD. VS. CIT REPORTE D IN (1990) 186 ITR 278 (SC) FOUND THAT ONCE THE COMPANY WAS DISSOLVED, IT BECOMES NONEXISTENT AND THEREFORE, NO ACTION CAN BE BROUGHT IN ITS NAME. THE APEX COURT FOUND THAT EVEN THOUGH THE RETURN WAS FI LED, IT IS INCUMBENT 5 I.T.A. NO.380/MDS/2016 UPON THE INCOME TAX AUTHORITIES TO SUBSTITUTE THE S UCCESSOR. IN VIEW OF THE ABOVE LEGAL POSITION, THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY FOUND THAT THE ASSESSMENT MA DE ON THE NONEXISTENT COMPANY IS VOID. THEREFORE, THIS TRIBUN AL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AN D ACCORDINGLY, THE SAME IS CONFIRMED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON 23 RD NOVEMBER, 2016 AT CHENNAI. SD/- SD/- ( . . ! '# ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) $ /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 23 RD NOVEMBER, 2016. SP. - +/'3 43(/ /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. ! 5/ ( )/CIT(A) 4. ! 5/ /CIT, 5. 36 +/ /DR 6. ' 7 /GF.