GENESYS WORLDEYE LTD ( NOW AMALGAMAED WITH GENESYS INTERNATIONAL CORPORATION LTD), MUMBAI V. ASST CIT CIR 10(2), MUMBAI

ITA 4173/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3381 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 16-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 14-06-2012
• Court: TRIBUNAL
• Assessee Lawyers: V CHANDRASEKHAR; HARSHAD J SHAH
• Keywords: Validity of assessment; Procedural lapse; Competent authority; Scheme of amalgamation; Capital receipt
• Section: 143(3); 147; 148

Judgement Text

, , B, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.4173/MUM/2012 ASSESSMENT YEAR: 2009-10 GE NESYS WORLDEYE LTD.( NOW AMALGAMATED WITH GENESYS INTERNATIONAL CORPORATION LTD.), C-112/116, KAILASH INDL. COMPLEX, BLDG. NO.1 PARK SITE, VIKHROLI (W) MUMBAI-400079 / VS. A CIT - 10 (2), AAYAKAR BHAVAN, M.K. RD, MUMBAI-400020 (ASSESSEE ) (REVENUE) P.A. NO. AABCI2178P / ASSESSEE BY SHRI V. CHANDRASEKHAR & SHRI HARSHAD J. SHAH (AR) / REVENUE BY SHRI MAURYA PRATAP ( DR) / DATE OF HEARING : 16/05/2016 / DATE OF ORDER: 03/06/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI- 21 {(IN SHORT CIT(A)}, DATED 02.04.2012 PASSED AG AINST GENESYS WORLDEYE LTD. 2 ASSESSMENT ORDER U/S 143(3) DATED 31.10.2011 FOR TH E ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS: 1. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N DISMISSING GROUND OF APPEAL THAT THE LD. ASSESSING OFFICER'S ASSESSMENT ORDER FOR ADDITION TO INCOME B Y DISALLOWING EXPENSES OF RS.4,77,381 IS AB-INITIO VO ID WITHOUT APPRECIATING THE FACTS OF THE CASE. WITHOUT PREJUDICE 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ASSESS THE INTEREST INCOME OF RS.49,77,989/-, WHICH WAS OFFERED IN RETURN AS INCOME FROM OTHER SOURCES, AS CAPITAL RECEIPT AND HENCE BE ADJUSTED AGAINST THE EXPENDITURE CAPITALIZED DURING THE SETTING UP OF THE NEW UNIT A S SAME WAS EARNED IN A PERIOD BEFORE THE COMMENCEMENT OF BUSINESS. 3. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN UPHOLDING THE LD AO ORDER FOR DISALLOWING I ADDING RS.2,58,827/- OUT OF LEGAL & PROFESSIONAL FEES ON T HE GROUND OR GROUNDS AS ALLEGED IN THE ASSESSMENT ORDE R. 4. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN UPHOLDING THE LD AO ORDER FOR DISALLOWING ADDING RS.1,30,300 OUT OF SALARIES ON THE GROUND OR GROUND S AS ALLEGED IN THE ASSESSMENT ORDER. 5. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN UPHOLDING THE LD AO ORDER FOR DISALLOWING/ ADDING RS.88,254 OUT OF MISCELLANEOUS EXPENSES ON THE GROU ND OR GROUNDS AS ALLEGED IN THE ASSESSMENT ORDER. 6. THE APPELLANT CRAVES LEAVE, TO ADD, AMEND, ALTER , MODIFY AND/OR WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL AS THE SITUATION MAY WARRANT, ON OR BEFORE T HE DATE OF HEARING OF APPEAL. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI V. CHANDRASEKHAR & SHRI HARSHAD J. SHAH, AUTHO RISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND B Y SHRI MAURYA PRATAP, DEPARTMENTAL REPRESENTATIVE (CIT-DR) ON BEHALF OF THE REVENUE. GENESYS WORLDEYE LTD. 3 3. THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUNDS WHI CH ARE REPRODUCED AS UNDER: 1. THAT THE LEARNED CIT[A] HAS ERRED ON LAW AND ON FACTS IN UPHOLDING THE ORDER OF ASSESSMENT PASSED BY THE LEARNED ASSESSING OFFICER, MAKING ASSESSMENT IN THE HANDS OF M/S. GENESYS WORLDEYE LIMITED, WHICH COMPANY STANDS DISSOLVED W.E.F. 1 APRIL 2010 PURSUA NT TO THE ORDER OF THE HON'BLE MUMBAI HIGH COURT DATED 16 DEC 2010 ON ITS AMALGAMATION WITH M/S. GENESYS INTERNATIONAL CORPORATION LIMITED, AND IS A NON- EXISTING ENTITY FROM THE ABOVE DATE. THE LEARNED CIT[A] FAILED TO APPRECIATE THAT THE ASSESSMENT MAD E ON A NON-EXISTING ENTITY IS NULL AND VOID, UNDER TH E FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED AO FAILED TO APPRECIATE THAT THE ASSESSMENT ORDER WAS PASSED FOR AY 2009-10, ON A ENTITY WHICH WAS NOT IN THE EXISTENCE AT THE TIME O F PASSING ORDER AND ISSUING DEMAND NOTICE DATE 31-10- 2011 IN THE NON-EXISTENCE COMPANY NAMELY OF M/S GENESYS WORLDEYE LIMITED IS NULL AND VOID, THOUGH THE RETUR N OF INCOME WAS FILED ON 29 SEP 2009 IN THE NAME OF M/S GENESYS WORLDEYE LIMITED. 4. DURING THE COURSE OF HEARING, IT WAS SUBMITTED BY THE LD. COUNSEL OF THE ASSESSEE THAT ADDITIONAL GROUNDS ARE PURELY LEGAL AND DO NOT REQUIRE INVESTIGATION OF ANY FRESH FACTS AND CAN BE DECIDED ON THE BASIS OF FACTS ON RECORD AND THEREFORE, THESE SHOULD BE ADMITTED IN VIEW OF JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF M/S. NATIONAL THERMAL POWER CO. LTD. V. CIT, 229 ITR 383. 4.1. IT WAS NOTED BY US THAT THE ADDITIONAL GROUNDS GO TO THE ROOT OF THE MATTER AND THEREFORE, BEFORE GOING INTO MERITS OF THE CASE, WE HAD HEARD BOTH THE PARTIES ON THE ADDITION AL GROUNDS. GENESYS WORLDEYE LTD. 4 IT IS NOTED THAT IN THE ADDITIONAL GROUNDS THE ASSE SSEE HAS RAISED SOLITARY ISSUE THAT ASSESSMENT ORDER WAS PAS SED IN THE HANDS OF AN ERSTWHILE COMPANY WHICH STOOD DISSOLVED BEFORE PASSING THE ASSESSMENT ORDER PURSUANT TO ITS AMALGA MATION WITH ANOTHER COMPANY AND WAS NON-EXISTING ENTITY ON THE DATE OF PASSING OF ORDER, AND THUS THE ORDER PASSED UPON A NON- EXISTING COMPANY WAS BAD IN LAW AND NULLITY. IT IS NOTED BY US THAT THE ADDITIONAL GROUNDS RAISING THIS ISSUE ARE PURELY LEGAL AND CAN BE DECIDED BY US ON THE BASIS OF FACTS WHIC H ALREADY EXIST ON RECORD AND BROUGHT BEFORE US. IT WAS CLAIM ED BY LD COUNSEL OF THE ASSESSEE THAT THESE FACTS WERE EXIST ING ON THE RECORD OF THE LOWER AUTHORITIES AND NO OBJECTION WA S RAISED BY LD CIT-DR IN THIS REGARD. THUS, WE PROCEED ON THE P REMISE THAT FACTS NARRATED AND EVIDENCES BROUGHT BEFORE US WERE AVAILABLE BEFORE THE LOWER AUTHORITIES AS WELL. UND ER THESE CIRCUMSTANCES, WE FIND IT APPROPRIATE TO ADMIT THE ADDITIONAL GROUNDS IN THE INTEREST OF JUSTICE. NO SERIOUS OBJE CTION WAS RAISED BY OTHER SIDE WITH REGARD TO ADMISSION OF TH E ADDITIONAL GROUNDS. THUS, THE ADDITIONAL GROUNDS ARE ADMITTED FOR ADJUDICATION. 4.2. IT HAS BEEN ARGUED BY THE LD. COUNSEL DRAWING OUR ATTENTION UPON VARIOUS PAGES OF THE PAPER BOOK THAT M/S. GENESYS WORLDEYE LTD. (ERSTWHILE COMPANY) GOT AMALG AMATED WITH ANOTHER COMPANY NAMELY M/S. GENESYS INTERNATIO NAL CORPORATION LTD. IN PURSUANCE TO THE ORDER OF AMALG AMATION PASSED BY HONBLE BOMBAY HIGH COURT DATED 3 RD JANUARY 2011 W.E.F. 1 ST APRIL 2010. IT WAS FURTHER SUBMITTED THAT INFORMAT ION GENESYS WORLDEYE LTD. 5 ABOUT THE AMALGAMATION WAS SUBMITTED BY THE ASSESSE E TO THE AO AT MORE THAN TWO OCCASIONS. IT WAS FURTHER SUBMI TTED THAT INSPITE OF THE KNOWLEDGE OF THE AMALGAMATION, THE A O FRAMED THE ASSESSMENT ORDER IN THE HANDS OF ERSTWHILE COMP ANY NAMELY M/S. GENESYS WORLDEYE LTD. (HEREINAFTER REFE RRED TO AS GWL). IT WAS SUBMITTED THAT THE ASSESSMENT ORDER WA S NULLITY IN THE EYES OF LAW, AS IT WAS AKIN TO FRAMING THE A SSESSMENT UPON THE DEAD PERSON WHICH WAS NOT PERMITTED IN THE LAW. HE PLACED RELIANCE UPON THE JUDGMENTS OF HONBLE DELHI HIGH COURT IN THE CASE SPICE ENTERTAINMENT LTD. (ITA NO. 475 -476 OF 2011 DATED 03.08.2011) AND CIT VS. DIMENSION APP ARELS PVT. LTD., (ITA NO. 327 TO 332 OF 2014 ORDER DATED 08.07.2014). 4.3. PER CONTRA, LD. DR SUPPORTED THE ORDER OF THE AO A S WELL AS LD. CIT(A). IT WAS POINTED OUT BY HIM THAT THIS LEGAL GROUND WAS TAKEN BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE TRIBUNAL. IT WAS FURTHER SUBMITTED BY HIM THE ASSES SEE HAD MADE PARTICIPATION IN THE PROCEEDINGS BEFORE THE AO AND THEREFORE, THE ASSESSEE SHOULD NOT BE BENEFITTED FR OM RAISING THIS JURISDICTIONAL ISSUE NOW BEFORE THE TRIBUNAL F OR THE FIRST TIME. IT WAS LASTLY SUBMITTED BY HIM THAT IN ANY CA SE, THE IMPUGNED DEFECT IN FRAMING THE ORDER WAS A CURABLE DEFECT AND MERELY AN IRREGULARITY WHICH WAS NOT FATAL AND THER EFORE, ASSESSEES ARGUMENTS SHOULD BE REJECTED. BUT IN RES PONSE TO A QUERY FROM THE BENCH, HE DID NOT BRING ANY CONTRARY JUDGMENT IN RESPONSE TO THE JUDGMENTS RELIED UPON BY THE LD. COUNSEL. GENESYS WORLDEYE LTD. 6 4.5. WE HAVE GONE THROUGH THE FACTS OF THE CASE AND HAV E CONSIDERED SUBMISSIONS MADE BY BOTH THE SIDES. THE UNDISPUTED FACTS BROUGHT BEFORE US ARE THAT ASSESSM ENT ORDER WAS FRAMED IN THE HANDS OF GWL ON 16.12.2010 WHEREA S GWL HAD GOT AMALGAMATED WITH GICL (GENESYS INTERNATIONA L CORPORATION LTD.) IN PURSUANCE TO THE ORDER OF HON BLE BOMBAY HIGH COURT ORDER DATED 16.12.2010. IT IS THUS, APPA RENT THAT ON THE DATE OF PASSING OF THE ASSESSMENT ORDER, GWL HAD AMALGAMATED WITH GICL AND THEREFORE DID NOT HAVE AN Y LEGAL EXISTENCE IN THE EYES OF LAW. OUR ATTENTION WAS ALS O BROUGHT UPON TWO LETTERS SUBMITTED BY THE ASSESSEE TO THE A O DATED 27.06.2011 (SUBMITTED ON 2 ND AUGUST 2011) AND LETTER DATED 25 TH AUGUST 2011, SHOWING THAT REQUISITE INFORMATION AB OUT THE AMALGAMATION WAS BROUGHT TO THE NOTICE OF THE A O. THE LD. DR DID NOT NEGATE THESE FACTS. UNDER THESE CIRCUMST ANCES, IT CAN BE SAID THAT IT IS CLEAR CASE WHERE ASSESSMENT ORDER HAS BEEN PASSED UPON A NON-EXISTING PERSON. WE ANALYS ED THE LEGAL EFFECT OF PASSING THE ASSESSMENT ORDER IN THE HANDS OF A COMPANY WHICH IT DISSOLVED ON ACCOUNT OF ITS AMALGA MATION WITH ANOTHER COMPANY BEFORE THE PASSING OF THE ASSE SSMENT ORDER. THE LAW IN THIS REGARD IS WELL SETTLED THAT ASSESSMENT ORDER FRAMED UPON A NON-EXISTING OR DEAD PERSON IS NULLITY IN THE EYES OF LAW. THUS, THE IMPUGNED ASSESSMENT ORDE R IS CLEARLY NOT SUSTAINABLE IN THE EYES OF LAW DUE TO T HIS REASON. BUT LD. DR HAS MADE TWO MORE ARGUMENTS TO SAVE THE ASSESSMENT ORDER. IT WAS ARGUED BY HIM THAT THE DEF ECT IN THE ASSESSMENT ORDER BY PASSING THE SAME IN WRONG NAME WAS MERELY A PROCEDURAL DEFECT AND FURTHER IN ANY CASE SINCE GENESYS WORLDEYE LTD. 7 ASSESSEE HAD MADE PARTICIPATION IN THE PROCEEDINGS BEFORE THE AO, THEREFORE, HE SHOULD BE PRECLUDED FROM RAISING THIS LEGAL ISSUE NOW BEFORE THE TRIBUNAL. 4.6. WE HAVE CAREFULLY GONE THROUGH THESE ARGUMENTS OF THE LD. DR AS WELL BUT FIND NONE OF THEM AS SUSTAINABLE IN THE EYES OF LAW. FRAMING OF AN ASSESSMENT ORDER UPON A PROPER PERSON IS NOT A MATTER OF MERE PROCEDURE. IT CREATE S A LIABILITY IN THE HANDS OF A PERSON, WHICH SHOULD BE ENFORCEAB LE IN THE EYES OF LAW. IT IS NOTED FROM THE FACTS BEFORE US T HAT THE DEMAND NOTICE WAS ALSO ISSUED IN THE NAME OF NON-EX ISTING ENTITY NAMELY GWL DESPITE THEIR BEING THIS FACT ON RECORD THAT GWL WAS NO MORE EXISTENCE. IT WAS NOT LEGALLY OR PR ACTICALLY POSSIBLE TO RECOVER THIS DEMAND FROM GWL. THE NAME OF GWL CANNOT BE SUBSTITUTED WITH ANY OTHER NAME FOR RECOV ERY OF DEMAND EXCEPT WITH THE PROCESS OF LAW. THUS, IT CAN NOT BE SAID THAT FRAMING OF THE ASSESSMENT ORDER IN THE NAME OF GWL WAS MERELY AN ACT OF PROCEDURE AND MENTIONING A WRONG N AME WAS MERELY A PROCEDURAL LAPSE. IN OUR CONSIDERED VIEW, AS PER LAW, IT WAS A SUBSTANTIVE AND JURISDICTIONAL ERROR WHICH CANNOT BE CURED BY SIMPLY TAKING HELP OF SECTION 292B. THE LA W IN THIS REGARD IS WELL SETTLED WHICH WE SHALL DISCUSS SUBSE QUENTLY AFTER DEALING WITH ANOTHER ARGUMENTS OF THE LD. DR. 4.7. IT HAS BEEN FURTHER CONTENDED BY THE LD. DR THAT T HE ASSESSEE HAD PARTICIPATED IN THE PROCEEDINGS BEFORE THE AO AND THEREFORE, HE SHOULD BE PRECLUDED FROM RAISING THIS ISSUE BEFORE THE TRIBUNAL. GENESYS WORLDEYE LTD. 8 4.8. IN OUR VIEW, THIS ARGUMENT OF THE LD. DR IS ALSO N OT IN ACCORDANCE WITH LAW. THE ASSESSMENT IS TO BE MADE B Y THE AO IN ACCORDANCE WITH LAW. THE JURISDICTION TO FRAME T HE ASSESSMENT ORDER UPON A PARTICULAR PERSON CAN BE MA DE BY THE AO IN ACCORDANCE WITH THE LAW ONLY. THE JURISDI CTION TO FRAME AN ASSESSMENT CAN NEITHER BE CONFERRED NOR CA N IT BE TAKEN AWAY BY AN ASSESSEE OR ANY OTHER PERSON FROM THE AO ON THE BASIS OF THEIR CONSENT OR OTHERWISE. IF THE ASSESSMENT ORDERS ARE FRAMED ON THE BASIS OF CONSENT OR OBJECT ION OF THE ASSESSEES ALONE THEN IT WOULD GIVEN RISE A CHAOTIC SITUATION. THUS, IT IS FOR THE AO TO CAREFULLY DETERMINE HIS J URISDICTION TO MAKE AN ASSESSMENT IN A LAWFUL MANNER UPON THE APPR OPRIATE PERSON AND THE OBLIGATION TO DO SO REST SOLELY UPON THE SHOULDERS OF THE AO WHICH HE IS OBLIGED TO FULFILL BY FOLLOWING DUE PROCESS OF LAW. THERE IS NO ESTOPPEL AGAINST LAW. IF AN ASSESSMENT ORDER IS FRAMED WITHOUT THE AUTHORITY OF LAW, THEN, THE SAME WOULD BE NULLITY IN THE EYES OF LAW, AS NO TAX CAN BE COLLECTED WITHOUT THE AUTHORITY OF LAW, AS HAS BEEN CLEARLY LAID DOWN IN ARTICLE 265 OF OUR CONSTITUTION. 4.9. IT IS NOTED BY US THAT ALL THESE ISSUES AND ARGUME NTS HAVE ALREADY BEEN DEALT WITH AND THIS ENTIRE CONTROVERSY HAS ALREADY BEEN PUT TO REST BY VARIOUS COURTS IN THEIR JUDGMEN TS. HONBLE DELHI HIGH COURT IN THE CASE OF SPICE ENTERTAINMENT LTD (SUPRA) HAS ANALYSED THIS ENTIRE CONTROVERSY IN DETAIL AND HELD THAT ASSESSMENT ORDER PASSED UNDER SUCH CIRCUMSTANC ES WOULD BE NULLITY IN THE EYES OF LAW. THE RELEVANT O BSERVATIONS OF THE HONBLE HIGH COURT IN THE SAID CASE ARE VERY USEFUL TO GENESYS WORLDEYE LTD. 9 DEAL WITH THIS CONTROVERSY AND THE SAME ARE REPRODU CED HEREUNDER FOR THE SAKE OF READY REFERENCE: 6. ON THE AFORESAID REASONING AND ANALYSIS, THE T RIBUNAL SUMMED UP THE POSITION IN PARA 14 OF ITS ORDER WHIC H READS AS UNDER:- 'IN THE LIGHT OF THE DISCUSSIONS MADE ABOVE, WE, TH EREFORE, HOLD THAT THE ASSESSMENT MADE BY THE AO, IN SUBSTAN CE AND EFFECT, IS NOT AGAINST THE NON-EXISTENT AMALGAM ATING COMPANY. HOWEVER, WE DO AGREE WITH THE PROPOSITION OR RATION DECIDED IN THE VARIOUS CASES RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSMEN T MADE AGAINST NON-EXISTENT PERSON WOULD BE INVALID A ND LIABLE TO BE STRUCK DOWN. BUT, IN THE PRESENT CASE, WE FIND THAT THE ASSESSMENT, IN SUBSTANCE AND EFFECT, HAS B EEN MADE AGAINST AMALGAMATED COMPANY IN RESPECT OF ASSESSMENT OF INCOME OF AMALGAMATING COMPANY FOR TH E PERIOD PRIOR TO AMALGAMATION AND MERE OMISSION TO MENTION THE NAME OF AMALGAMATED COMPANY ALONGWITH T HE NAME OF AMALGAMATING COMPANY IN THE BODY OF ASSESSMENT AGAINST THE ITEM 'NAME OF THE ASSESSEE' IS NOT FATAL TO THE VALIDITY OF ASSESSMENT BUT IS A PROCED URAL DEFECT COVERED BY SECTION 292B OF THE ACT. WE HOLD ACCORDINGLY.' 7. THE AFORESAID LINE OF REASONING ADOPTED BY THE T RIBUNAL IS CLEARLY BLEMISHED WITH LEGAL LOOPHOLES AND IS CO NTRARY TO LAW. NO DOUBT, M/S SPICE WAS AN ASSESSEE AND AS AN INCORPORATED COMPANY AND WAS IN EXISTENCE WHEN IT F ILED THE RETURNS IN RESPECT OF TWO ASSESSMENT YEARS IN QUESTIONS. HOWEVER, BEFORE THE CASE COULD BE SELECT ED FOR SCRUTINY AND ASSESSMENT PROCEEDINGS COULD BE INITIA TED, M/S SPICE GOT AMALGAMATED WITH MCORP PVT. LTD. IT W AS 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. W ITH THIS AMALGAMATION MADE EFFECTIVE FROM 1ST JULY, 200 3, M/S SPICE CEASED TO EXIST. THAT IS THE PLAIN AND SI MPLE EFFECT IN LAW. THE SCHEME OF AMALGAMATION ITSELF PR OVIDED FOR THIS CONSEQUENCE, INASMUCH AS SIMULTANEOUS WITH THE SANCTIONING OF THE SCHEME, M/S SPICE WAS ALSO STOOD DISSOLVED BY SPECIFIC ORDER OF THIS COURT. WITH THE DISSOLUTION OF THIS COMPANY, ITS NAME WAS STRUCK OF F FROM GENESYS WORLDEYE LTD. 10 THE ROLLS OF COMPANIES MAINTAINED BY THE REGISTRAR OF COMPANIES. 8. A COMPANY INCORPORATED UNDER THE INDIAN COMPANIE S ACT IS A JURISTIC PERSON. IT TAKES ITS BIRTH AND GE TS LIFE WITH THE INCORPORATION. IT DIES WITH THE DISSOLUTION AS PER THE PROVISIONS OF THE COMPANIES ACT. IT IS TRITE LAW TH AT ON AMALGAMATION, THE AMALGAMATING COMPANY CEASES TO EX IST IN THE EYES OF LAW. THIS POSITION IS EVEN ACCEPTED BY THE TRIBUNAL IN PARA-14 OF ITS ORDER EXTRACTED ABOVE. H AVING REGARD THIS CONSEQUENCE PROVIDED IN LAW, IN NUMBER OF CASES, THE SUPREME COURT HELD THAT ASSESSMENT UPON A DISSOLVED COMPANY IS IMPERMISSIBLE AS THERE IS NO PROVISION IN INCOME-TAX TO MAKE AN ASSESSMENT THEREUPON. IN THE CASE OF SARASWATI INDUSTRIAL SYND ICATE LTD. VS. CIT, 186 ITR 278 THE LEGAL POSITION IS EXP LAINED IN THE FOLLOWING TERMS: 'THE QUESTION IS WHETHER ON THE AMALGAMATION OF THE INDIAN SUGAR COMPANY WITH THE APPELLANT COMPANY, TH E INDIAN SUGAR COMPANY CONTINUED TO HAVE ITS ENTITY AND WAS ALIVE FOR THE PURPOSES OF SECTION 41(1) OF THE ACT. THE AMALGAMATION OF THE TWO COMPANIES WAS EFFECTED UNDER THE ORDER OF THE HIGH COURT IN PROCEEDINGS UN DER SECTION 391 READ WITH SECTION 394 OF THE COMPANIES ACT. THE SARASWATI INDUSTRIAL SYNDICATE, THE TRANS FREE COMPANY WAS A SUBSIDIARY OF THE INDIAN SUGAR COMPAN Y, NAMELY, THE TRANSFEROR COMPANY. UNDER THE SCHEME OF AMALGAMATION THE INDIAN SUGAR COMPANY STOOD DISSOLV ED ON 29TH OCTOBER, 1962 AND IT CEASED TO BE IN EXISTE NCE THEREAFTER. THOUGH THE SCHEME PROVIDED THAT THE TRA NSFEREE COMPANY THE SARASWATI INDUSTRIAL SYNDICATE LTD. UNDERTOOK TO MEET ANY LIABILITY OF THE INDIAN SUGAR COMPANY WHICH THAT COMPANY INCURRED OR IT COULD INC UR, ANY LIABILITY, BEFORE THE DISSOLUTION OR NOT THEREA FTER. GENERALLY, WHERE ONLY ONE COMPANY IS INVOLVED IN CH ANGE AND THE RIGHTS OF THE SHARE HOLDERS AND CREDITORS A RE VARIED, IT AMOUNTS TO RECONSTRUCTION OR REORGANISAT ION OR SCHEME OF ARRANGEMENT. IN AMALGAMATION TWO OR MORE COMPANIES ARE FUSED INTO ONE BY MERGER OR BY TAKING OVER BY ANOTHER. RECONSTRUCTION OR AMALGAMATION HAS NO PRECISE LEGAL MEANING. THE AMALGAMATION IS A BLENDI NG OF TWO OR MORE EXISTING UNDERTAKINGS INTO ONE UNDERTAK ING, THE SHARE HOLDERS OF EACH BLENDING COMPANY BECOME GENESYS WORLDEYE LTD. 11 SUBSTANTIALLY THE SHARE HOLDERS IN THE COMPANY WHIC H IS TO CARRY ON THE BLENDED UNDERTAKINGS. THERE MAY BE AMALGAMATION EITHER BY THE TRANSFER OF TWO OR MORE UNDERTAKINGS TO A NEW COMPANY, OR BY THE TRANSFER O F ONE OR MORE UNDERTAKINGS TO AN EXISTING COMPANY. STRICT LY AMALGAMATION DOES NOT COVER THE MERE ACQUISITION BY A COMPANY OF THE SHARE CAPITAL OF OTHER COMPANY WHICH REMAINS IN EXISTENCE AND CONTINUES ITS UNDERTAKING BUT THE CONTEXT IN WHICH THE TERM IS USED MAY SHOW THAT IT IS INTENDED TO INCLUDE SUCH AN ACQUISITION. SEE HALSBU RYS LAWS OF ENGLAND 4TH EDITION VOL. 7 PARA 1539. TWO COMPANIES MAY JOIN TO FORM A NEW COMPANY, BUT THERE MAY BE ABSORPTION OR BLENDING OF ONE BY THE OTHER, BOTH AMOUNT TO AMALGAMATION. WHEN TWO COMPANIES ARE MERGED AND ARE SO JOINED, AS TO FORM A THIRD COMPAN Y OR ONE IS ABSORBED INTO ONE OR BLENDED WITH ANOTHER, T HE AMALGAMATING COMPANY LOSES ITS ENTITY.' 9. THE COURT REFERRED TO ITS EARLIER JUDGMENT IN GE NERAL RADIO AND APPLIANCES CO. LTD. VS. M.A. KHADER (1986 ) 60 COMP CASE 1013. IN VIEW OF THE AFORESAID CLINCHING POSITION IN LAW, IT IS DIFFICULT TO DIGEST THE CIRC UITOUS ROUTE ADOPTED BY THE TRIBUNAL HOLDING THAT THE ASSESSMENT WAS IN FACT IN THE NAME OF AMALGAMATED COMPANY AND THER E WAS ONLY A PROCEDURAL DEFECT. 10. SECTION 481 OF THE COMPANIES ACT PROVIDES FOR DISSOLUTION OF THE COMPANY. THE COMPANY JUDGE IN TH E HIGH COURT CAN ORDER DISSOLUTION OF A COMPANY ON TH E GROUNDS STATED THEREIN. THE EFFECT OF THE DISSOLUTI ON IS THAT THE COMPANY NO MORE SURVIVES. THE DISSOLUTION PUTS AN END TO THE EXISTENCE OF THE COMPANY. IT IS HELD IN M.H. SMITH (PLANT HIRE) LTD. VS. D.L. MAINWARING (T/A IN SHORE), 1986 BCLC 342 (CA) THAT 'ONCE A COMPANY IS DISSOLVE D IT BECOMES A NON-EXISTENT PARTY AND THEREFORE NO ACTIO N CAN BE BROUGHT IN ITS NAME. THUS AN INSURANCE COMPANY W HICH WAS SUBROGATED TO THE RIGHTS OF ANOTHER INSURED COM PANY WAS HELD NOT TO BE ENTITLED TO MAINTAIN AN ACTION I N THE NAME OF THE COMPANY AFTER THE LATTER HAD BEEN DISSO LVED'. 11. AFTER THE SANCTION OF THE SCHEME ON 11TH APRIL, 2004, THE SPICE CEASES TO EXIT W.E.F. 1ST JULY, 2003. EVE N IF SPICE HAD FILED THE RETURNS, IT BECAME INCUMBENT UPON THE INCOME TAX AUTHORITIES TO SUBSTITUTE THE SUCCESSOR IN PLACE OF THE SAID DEAD PERSON . WHEN NOTICE UNDER SECTION GENESYS WORLDEYE LTD. 12 143 (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 ASSESSING OFFICER MADE THE ASSESSMENT IN THE NAME OF M/S SPICE WHICH WAS N ON EXISTING ENTITY ON THAT DAY. IN SUCH PROCEEDINGS AN D ASSESSMENT ORDER PASSED IN THE NAME OF M/S SPICE WO ULD CLEARLY BE VOID. SUCH A DEFECT CANNOT BE TREATED AS PROCEDURAL DEFECT. MERE PARTICIPATION BY THE APPELL ANT WOULD BE OF NO EFFECT AS THERE IS NO ESTOPPEL AGAIN ST LAW. 12. ONCE IT IS FOUND THAT ASSESSMENT IS FRAMED IN T HE NAME OF NON-EXISTING ENTITY, IT DOES NOT REMAIN A PROCEDURAL IRREGULARITY OF THE NATURE WHICH COULD B E CURED BY INVOKING THE PROVISIONS OF SECTION 292B OF THE ACT. SECTION 292B OF THE ACT READS AS UNDER:- '292B. NO RETURN OF INCOME ASSESSMENT, NOTICE, SUMM ONS OR OTHER PROCEEDINGS FURNISHED OR MADE OR ISSUE OR TAKEN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSU ED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT SHALL BE INVALID OR SHALL BE DEEMED TO BE INVALID M ERELY BY REASONS OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOME, ASSESSMENT, NO TICE, SUMMONS OR OTHER PROCEEDINGS IS IN SUBSTANCE AND EF FECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND P URPOSE OF THIS ACT.' 13. THE PUNJAB & HARYANA HIGH COURT STATED THE EFFE CT OF THIS PROVISION IN CIT VS. NORTON MOTORS, 275 ITR 59 5 IN THE FOLLOWING MANNER:- 'A READING OF THE ABOVE REPRODUCED PROVISION MAKES IT CLEAR THAT A MISTAKE, DEFECT OR OMISSION IN THE RET URN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEE DING IS NOT SUFFICIENT TO INVALIDATE AN ACTION TAKEN BY THE COMPETENT AUTHORITY, PROVIDED THAT SUCH RETURN OF I NCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDIN G TO THE PROVISIONS OF THE ACT. TO PUT IT DIFFERENTLY, SECTI ON 292B CAN BE RELIED UPON FOR RESISTING A CHALLENGE T O THENOTICE, ETC., ONLY IF THERE IS A TECHNICAL DEFEC T OR OMISSION IN IT. HOWEVER, THERE IS NOTHING IN THE PL AIN LANGUAGE OF THAT SECTION FROM WHICH IT CAN BE INFER RED THAT THE SAME CAN BE RELIED UPON FOR CURING A JURISDICTI ONAL GENESYS WORLDEYE LTD. 13 DEFECT IN THE ASSESSMENT NOTICE, SUMMONS OR OTHER PROCEEDING. IN OTHER WORDS, IF THE NOTICE, SUMMONS OR OTHER PROCEEDING TAKEN BY AN AUTHORITY SUFFERS FROM AN IN HERENT 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 TERM S OF THE MANDATE OF SECTION 140 OF THE ACT. THE COURT WAS OF THE OPINION THAT SUCH A RETURN CANNOT BE TREATED AS RET URN EVEN A RETURN FILED BY THE ASSESSEE AND THIS INHERENT DE FECT COULD NOT BE CURED INSPITE OF THE DEEMING EFFECT OF SECTION 292B OF THE ACT. THEREFORE, THE RETURN WAS ABSOLUTE LY INVALID AND ASSESSMENT COULD NOT BE MADE ON A INVAL ID RETURN. IN THE PROCESS, THE COURT OBSERVED AS UNDER :- 'HAVING GIVEN OUR THOUGHTFUL CONSIDERATION TO THE SUBMISSION ADVANCED BY THE LEARNED COUNSEL FOR THE APPELLANT, WE ARE OF THE VIEW THAT THE PROVISIONS O F SECTION 292B OF THE 1961 ACT DO NOT AUTHORIZE THE AO TO IGN ORE A DEFECT OF A SUBSTANTIVE NATURE AND IT IS, THEREFORE , THAT THE AFORESAID PROVISION CATEGORICALLY RECORDS THAT A RE TURN WOULD NOT BE TREATED AS INVALID, IF THE SAME 'IN SU BSTANCE AND EFFECT IS IN CONFORMITY WITH OR ACCORDING TO TH E INTENT AND PURPOSE OF THIS ACT'. INSOFAR AS THE RETURN UND ER REFERENCE IS CONCERNED, IN TERMS OF SECTION 140 OF THE 1961 ACT, THE SAME CANNOT BE TREATED TO BE EVEN A RETURN FILED BY THE RESPONDENT ASSESSEE, AS THE SAME DOES NOT EV EN BEAR HER SIGNATURES AND HAD NOT EVEN BEEN VERIFIED BY HER. IN THE AFORESAID VIEW OF THE MATTER, IT IS NOT POSS IBLE FOR US TO ACCEPT THAT THE RETURN ALLEGEDLY FILED BY THE AS SESSEE WAS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. TH US VIEWED, IT IS NOT POSSIBLE FOR US TO ACCEPT THE CON TENTION ADVANCED BY THE LEARNED COUNSEL FOR THE APPELLANT O N THE BASIS OF SECTION 292B OF THE 1961 ACT. THE RETURN U NDER REFERENCE, WHICH HAD BEEN TAKEN INTO CONSIDERATION BY THE REVENUE, WAS AN ABSOLUTELY INVALID RETURN AS IT HAD A GLARING INHERENT DEFECT WHICH COULD NOT BE CURED IN SPITE OF 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 HI GH GENESYS WORLDEYE LTD. 14 COURT HELD THAT THE ISSUE OF NOTICE UNDER SECTION 1 48 OF THE INCOME TAX ACT IS A CONDITION PRECEDENT TO THE VALI DITY OF ANY ASSESSMENT 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 ARISES MERELY BY MISTAKE, DEFECT OR OMISSION IN A NOTICE, IF IN SUBSTANCE AND EFFECT IT IS IN CONFORMITY WITH OR AC CORDING TO THE INTENT AND PURPOSE OF THIS ACT. SINCE NO VALID NOTICE WAS SERVED ON THE ASSESSEE TO REASSESS THE INCOME, ALL THE CONSEQUENT PROCEEDINGS WERE NULL AND VOID AND IT WA S NOT A CASE OF IRREGULARITY. THEREFORE, 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 PROVISIONS OF SECTION 292B OF THE ACT ARE NOT APPLICABLE IN SU CH A CASE. THE FRAMING OF ASSESSMENT AGAINST A NON-EXIST ING 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 PERSON . 17. THE ORDER OF THE TRIBUNAL IS, THEREFORE, CLEARL Y UNSUSTAINABLE. WE, THUS, DECIDE THE QUESTIONS OF LA W IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE AND ALLOW THESE APPEALS. 4.10. THIS JUDGMENT WAS SUBSEQUENTLY FOLLOWED IN ANOTHER DETAILED JUDGMENT BY HONBLE DELHI HIGH COURT IN TH E CASE OF CIT V. DIMENSION APPARELS PVT. LTD. (SUPRA) WHEREIN ALL THE ARGUMENTS WHICH HAVE BEEN MADE BEFORE US BY THE LD. DR HAVE BEEN DEALT WITH BY THE HONBLE HIGH COURT AND IT WAS HELD THAT FRAMING OF THE ASSESSMENT ORDER UPON A NO N-EXISTING PERSON WAS A JURISDICTIONAL DEFECT AND NOT MERELY A CURABLE PROCEDURAL DEFECT, AND THUS NULLITY IN THE EYES OF LAW. 4.11. IN VIEW OF ALL THESE FACTS AS HAVE BROUGHT BEFORE US AND THE JUDGMENTS BROUGHT BEFORE US AND IN THE ABSENCE OF ANY GENESYS WORLDEYE LTD. 15 CONTRARY JUDGMENT HAVING BEEN BROUGHT BEFORE US, WE FIND THAT IMPUGNED ASSESSMENT ORDER IS NULLITY IN THE EYES OF LAW AND THE SAME IS HERBY QUASHED, AND THUS ADDITIONAL GROU NDS RAISED BY THE ASSESSEE ARE ALLOWED. SINCE WE HAVE A LLOWED THE APPEAL OF THE ASSESSEE ON THE ADDITIONAL GROUNDS, W E DO NOT FIND IT NECESSARY TO GO INTO GROUNDS RAISED ON MERI TS AND THEREFORE, THESE ARE TREATED AS INFRUCTUOUS. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JUNE, 2016. SD/- (MAHAVIR SINGH) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER MUMBAI; DATED: 03/0 6/2016 CTX? P.S/. .. # $%&'&($ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !'# / THE RESPONDENT. 3. $# $# % ( ) / THE CIT, MUMBAI. 4. $# $# % / CIT(A)- , MUMBAI 5. () * # !+ , $# # +- , / DR, ITAT, MUMBAI 6. *. / / GUARD FILE. / BY ORDER, '#( ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI