ACIT, Central Circle-13, New Delhi V. Pride Residency (P)Ltd.(in the case of M/s Satkar Fincap Ltd.), New Delhi

ITA 4179/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4997 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 23-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Search and seizure; Opportunity of being heard; Scheme of amalgamation; Assessment record
• Section: 69C; 143(3); 142(1); 153A; 195; 264; 13; 153; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F, NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO.4179/DEL/2017 ASSESSMENT YEAR: 2008-09 ACIT, CENTRAL CIRCLE-13, NEW DELHI VS. M/S. PRIDE RESIDENCY (P) LTD. (IN THE CASE OF M/S. SATKAR FINCAP LTD.), F-5/9, VASANT VIHAR, NEW DELHI PAN :AAGCP0358K (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST ORDER DATED 27/02/2017, PASSED BY THE LEARNED CIT(APPEALS )-25, NEW DELHI [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YE AR 2008-09 RAISING FOLLOWING GROUNDS: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS ERRED IN QUASHING THE ORDER WHICH WAS CORRECTLY MADE IN THE NAME OF M/S. PRIDE RESIDENCY PRIVATE LIMITED BEING THE AMALGAMATED COM PANY. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS ERRED IN HOLDING THAT A.O. SHOULD ASSESS THE INCOME OF AMALG AMATING COMPANY WHEREAS THE INCOME OF THE SEARCHED COMPANY (AMALGAM ATING COMPANY) APPELLANT BY SMT. SUSHMA SINGH, CIT(DR) RESPONDENT BY SHRI B.K. DHINGRA, AR DATE OF HEARING 13.02.2020 DATE OF PRONOUNCEMENT 19.02.2020 2 ITA NO. 4179/DEL./2017 WAS CORRECTLY ASSESSED IN THE HANDS OF AMALGAMATED COMPANY M/S. PRIDE RESIDENCY PRIVATE LIMITED. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ALL TH E GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEA L. 2. THE FACTS IN BRIEF OF THE CASE ARE THAT A SEARCH A ND SEIZURE ACTION UNDER SECTION 132 OF THE INCOME-TAX ACT, 196 1 (IN SHORT THE ACT) WAS CARRIED OUT AT THE PREMISES OF M/S. SATKAR FINCAP PRIVATE LIMITED ON 07/08/2010 AND ASSESSMENT WAS CO MPLETED UNDER SECTION 153A READ WITH SECTION 143(3) OF THE ACT ON 26/03/2013 AT AN INCOME OF 1,25,03,230/- BY THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-13, NEW DELHI. THE ASSESSEE FILED APPEAL AGAINST THE SAID ORDER BEFORE THE FIRST APPELLATE AUTHORITY, WHICH WAS SUBSEQUENTLY WITHDRA WN VIDE LETTER DATED 20/11/2013 AND ACCORDINGLY DISMISSED B Y THE LEARNED FIRST APPELLATE AUTHORITY AS WITHDRAWN. THE ASSESSEE PREFERRED REVISION APPLICATION ON 21/03/2014, UNDER SECTION 264 OF THE ACT, BEFORE THE PRINCIPAL CIT, CENTRAL-2, N EW DELHI (DCIT), STATING THAT THE COMPANY, M/S SATKAR FINCAP P. LTD. GOT AMALGAMATED WITH M/S. PRIDE RESIDENCY PRIVATE LIMIT ED (I.E. THE ASSESSEE), VIDE ORDER DATED 17/08/2012 OF HONBLE H IGH COURT OF DELHI WITH EFFECT FROM APPOINTED DATE I.E. 01/04/20 11, PASSED UNDER SECTION 391(2) AND 394 OF THE COMPANIES ACT, 1956. THE LD. PCIT ACCORDINGLY, THROUGH HIS ORDER DATED 30/03 /2015, UNDER SECTION 264 OF THE ACT, QUASHED THE ASSESSMEN T MADE BY THE ASSESSING OFFICER, UNDER SECTION 153A OF THE AC T. THE LD. PCIT STATED THAT THE ACIT, CC-13, NEW DELHI, I.E., THE A SSESSING OFFICER WHO PASSED THE ORDER, HAD COMMITTED THE ERROR OF PA SSING ORDER IN THE NAME OF NON-EXISTING ENTITY AND DIRECTED THE ASSESSING OFFICER TO RE-ASSESS THE INCOME IN THE HANDS OF THE EXISTING 3 ITA NO. 4179/DEL./2017 CORRECT LEGAL ENTITY AFTER GIVING PROPER OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. 3. PURSUANT TO THE DIRECTION OF THE LD. PCIT, THE ACI T, CC-13, NEW DELHI, COMMENCED ASSESSMENT PROCEEDING, BUT AGA IN HE ISSUED NOTICE UNDER SECTION 153A OF THE ACT IN THE NAME OF M/S SATKAR FINCAP PRIVATE LIMITED, WHICH WAS OBJECTED B Y THE ASSESSEE, BEING THE NOTICE ISSUED ON NON-EXISTENT E NTITY. THE ASSESSMENT, HOWEVER, WAS COMPLETED IN THE NAME OF M /S. PRIDE RESIDENCY PRIVATE LIMITED (I.E. THE ASSESSEE). THE ASSESSING OFFICER AGAIN COMMITTED A MISTAKE OF MENTIONING THE PAN IN THE TITLE INFORMATION ON THE ASSESSMENT ORDER AS AAJCS6 828A, WHICH WAS THE PAN OF M/S SATKAR FINCAP P. LTD. 4. ON FURTHER APPEAL, THE LD. CIT(A) QUASHED THE ASSES SMENT ON THE GROUND THAT NOTICE WAS ISSUED ON THE NON-EXI STING (AMALGAMATING ) ENTITY, OBSERVING AS UNDER: 8.1 A SEARCH & SEIZURE OPERATION WAS CARRIED OUT IN SANSKAR GROUP OF CASES ON 07.08.2010. AS PER SEARCH WARRANT AND PANCHNAMA, THE ASSESSEE COMPANY WAS ALSO COVERED U/ S 132/133A OF THE I.T. ACT, 1961. THIS GROUP OF COMPA NIES IS LED BY ITS FLAGSHIP CONCERN M/S SANSKAR HOME PVT. LTD. WITH SH . RAVI ARORA AS ITS MAIN DIRECTOR. THIS GROUP IS MAINLY ENGAGED IN THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF BUILDINGS, HOMES, F LATS ETC., TRADING IN PROPERTIES AND UNDERTAKING CONSTRUCTION/COLLABOR ATION PROJECTS. THE CASE OF THE ASSESSEEE WAS CENTRALIZED IN THE CE NTRAL CIRCLE-13, NEW DELHI, VIDE ORDER F. NO. CIT(C)-III/DEL/CENTRAL IZATION/2010- 11/3607 DATED 28.03.2011 OF COMMISSIONER OF INCOME TAX, DELHI-ILL, NEW DELHI U/S 127 OF THE INCOME TAX ACT, 1961. 8.2 AN EARLIER ASSESSMENT U/S 153C/143(3) WAS MADE IN THE CASE OF THE ASSESSEE COMPANY FOR THE ASSESSMENT YEAR UND ER CONSIDERATION ON 31.12.10 AT AN INCOME OF RS. 1,25, 03,230/-, AFTER MAKING ADDITIONS OF RS. 90,89,386/- ON ACCOUNT OF U NEXPLAINED PURCHASES U/S 69C AND DISALLOWANCE OF EXPENSES AMOU NTING TO RS.33,76,450/-. THE LEARNED CIT(APPEALS)-II, DELHI CONFIRMED THE REJECTION OF BOOKS BY THE ASSESSING OFFICER AND UPH ELD THE ADDITIONS MADE BY THE ASSESSING OFFICER. THE HONBLE ITAT ALL OWED THE APPEALS OF THE ASSESSEE. HOWEVER, AS INFORMED BY TH E LEARNED 4 ITA NO. 4179/DEL./2017 COUNSEL OF THE APPELLANT THE HONBLE HIGH COURT HAS RESTORED THE MATTER TO THE HONBLE ITAT VIDE ITS ORDER PASSED IN DECEMBER, 2016. 8.3 PURSUANT TO THE SEARCH IN THE SANSKAR GROUP, AS SESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED U/S 153A R.W.S 1 43(3) OF THE I.T. ACT ON 26.03.2013 AT AN INCOME OF RS. 1,25,03, 230/-. THE ASSESSEE FILED APPEAL AGAINST THE SAID ORDER WHICH WAS SUBSEQUENTLY WITHDRAWN VIDE ITS LETTER DATED 20.11. 2013. THE CIT(A)-2, NEW DELHI VIDE ORDER DATED 08.01.2014 DIS POSED THE APPEAL BY DISMISSING IT. THE ASSESSEE PREFERRED REV ISION APPLICATION U/S 264 OF THE I.T. ACT FOR THE ABOVE A.Y. BEFORE T HE CIT CENTRAL-2, NEW DELHI ON 21.03.2014. THE PR. CIT CENTRAL-2, NEW DELHI VIDE HIS ORDER DATED 30.03.2015 PASSED ORDER U/S 264 OF THE I.T. ACT QUASHED THE ASSESSMENT MADE BY THE ASSESSING OFFICE R U/S 153A ON TECHNICAL GROUNDS. THE LEARNED PR. CIT STATED TH AT THE ONLY ERROR WHICH THE A.O. HAD COMMITTED WAS THAT THE ORDER HAS BEEN PASSED IN THE NAME OF A NON-EXITING COMPANY AND DIRECTED T HE A.O. TO REASSESS THE INCOME IN THE HANDS OF THE EXISTING CO RRECT LEGAL ENTITY AFTER GIVING PROPER OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE AND AFTER THE EXAMINATION & SCRUTINY OF ALL THE RELEVAN T MATERIAL AND VERIFICATION INCLUDING THE SUBMISSIONS MADE BY THE ASSESSEE. 8.4 THEREAFTER, THE ASSESSING OFFICER PASSED THE PR ESENT ORDER AND ASSESSED THE INCOME OF THE ASSESSEE COMPANY AT RS. 1,25,03,230/- .THE ASSESSEE IS IN APPEAL AGAINST THE ASSESSMENT. 8.5 IT IS SEEN THAT THE ASSESSING OFFICER HAS FRAM ED THE ASSESSMENT U/S 264/143(3) R.W.S. 153 A OF THE I.T. ACT, 1961 I N THE NAME OF M/S PRIDE RESIDENCY (P) LTD. (IN THE CASE OF M/S S ATKAR FINCAP LTD.). THE ASSESSMENT ORDER HAS BEEN FRAMED IN PUR SUANCE OF THE ORDER U/S 264 OF THE PRINCIPAL CIT (CENTRAL)-2, NEW DELHI, DATED 30.03.15, WHEREIN THE ASSESSING OFFICER WAS DIRECTE D TO REASSESS THE INCOME IN THE HANDS OF THE EXISTING CORRECT LEG AL ENTITY. 8.6 IT WAS VEHEMENTLY ARGUED BY SH. B. K. DHINGRA, CA, THE LEARNED COUNSEL OF THE APPELLANT COMPANY THAT THE ASSESSING OFFICER HAD FAILED TO COMPLY WITH DIRECTIONS OF THE PRINCIPAL C OMMISSIONER, PARTICULARLY THAT THE ASSESSMENT BE MADE IN THE HA NDS OF THE EXISTING CORRECT LEGAL ENTITY, AND THAT THE ASSESS ING OFFICER NEITHER GAVE NOTICE TO THE CORRECT LEGAL ENTITY, NOR THE AS SESSMENT WAS MADE IN THE HANDS OF AN EXISTING CORRECT LEGAL ENTITY. THE LEARNED COUNSEL STATED THAT THE INITIATION OF PROCEEDINGS U /S 264/143(3) R.W.S. 153 A INCLUDING ISSUE OF NOTICE AND ALSO COM PLETION OF ASSESSMENT ON THE COMPANY WHICH HAD ALREADY BECOME NONEXISTENT ON ACCOUNT OF ITS MERGER WITH ANOTHER COMPANY WAS I LLEGAL AND BAD IN LAW AND AS SUCH THE ASSESSMENT BEING BAD IN LAW DESERVED TO BE QUASHED. 5 ITA NO. 4179/DEL./2017 8.7 THE LEARNED COUNSEL FILED EXTENSIVE SUBMISSIONS ON THE VARIOUS FACTUAL AND LEGAL COUNSEL STATED THAT A SIM ILAR ISSUE HAD ARISEN IN THE CASE OF M/S SATKAR FINCAP LTD. (THROU GH PRIDE RESIDENCY PVT. LTD.) FOR A.Y. 09-10, WHERE VIDE ORD ER U/S 250(6) OF THE INCOME TAX ACT, 1961 DATED 14.07.16 IN APPEAL N O. 60/2013- 14, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-39, NEW DELHI HAD QUASHED THE ASSESSMENT ORDER. A COPY OF T HE ORDER DATED 14.07.16 IN APPEAL NO. 60/2013-14 WAS FILED BY THE APPELLANT. 8.8 PERUSAL OF THE ABOVEMENTIONED ORDER U/S 250(6) OF THE INCOME TAX ACT, 1961 DATED 14.07.16 IN APPEAL NO. 60/2013- 14, BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-39, NE W DELHI SHOWS THAT THE LEARNED CIT (APPEALS) HAD HELD THAT THE IMPUGNED ORDER HAD BEEN RENDERED VOID AND HAD QUASHED THE AS SESSMENT ORDER. THE OPERATIVE PART OF THE ORDER DATED 14.07. 16 BY THE LEARNED CIT (APPEALS)-39, IN THE CASE OF M/S SATKAR FINCAP LTD. (THROUGH PRIDE RESIDENCY PVT. LTD.) FOR A.Y. 09-10 IS AS UNDER: 'FROM RECORDS IT CAN BE SAFELY GATHERED THAT THE FOLLOWING ISSUES ARISE FROM THE IMPUGNED ORDER- > VALIDITY OF THE ORDER AS ASSESSMENT IS ON AMALGAMATING COMPANY > DISALLOWANCE OF PURCHASES U/S 69C (ADDITION IN SALES U/S 68 SUBSUMED) > DISALLOWANCE OF EXPENDITURE 5.1 FROM RECORDS, IT IS OBSERVED THAT PURSUANT TO T HE SEARCH U/S 132 ON 07.08.2010, THE ASSESSMENT ORDER WAS PAS SED VIDE THE IMPUGNED ORDER U/S 143(3)/153A. THE ASSESS MENT FOR AY 2009-10 HAS BEEN MADE IN THE NAME OF THE APP ELLANT - OF ITS INCOME FOR THE PREVIOUS YEAR (FY2008-09) REL EVANT TO AY 2009-10. ALSO, THE PROCEEDINGS U/S 153A OF THE ACT HAS BEEN INITIATED ON THE APPELLANT VIDE NOTICE DATED 17/09/ 2012. IN SPITE OF THE APPELLANT INFORMING THE FACT OF ITS AM ALGAMATING WITH M/S. PRIDE RESIDENCY BY ITS REPLY DATED 02/11/ 2012 (AND RECEIVED ON 09/11/2012), ALL THAT WAS DONE, AS APPARENT FROM THE RELEVANT ASSESSMENT RECORD, WAS THAT THE INFORMATION WAS PROCESSED WITHOUT REALIZING COMPLET ELY THE IMPACT OF THE INFORMATION - THE NOTICE U/S 142(1) I SSUED ON 22/11/2012 ADDRESSED THE APPELLANT AS 'M/S SATKAR F INCAP LIMITED NOW KNOWN AS M/S. PRIDE RESIDENCY (P) LTD'. EVEN THE SAME ADDRESS IS MENTIONED IN THE IMPUGNED ORDER U/S 143(3)/153A. 5.2 IT IS ALSO OBSERVED FROM RECORDS THAT THE ORDER OF AMALGAMATION OF THE APPELLANT WITH M/S PRIDE RESIDE NCY (P) LTD ( W E F 1/04/2011) HAS BEEN APPROVED BY THE HON 'BLE DELHI HIGH COURT WHICH APPROVED THE 'SCHEME OF 6 ITA NO. 4179/DEL./2017 AMALGAMATION' VIDE ITS ORDER DATED 17/08/2012 ON TH E BASIS OF THE 'AFFIDAVIT' AND REPORT DATED 13/08/2012 OF T HE 'OFFICIAL LIQUIDATOR' FILED BEFORE THE COURT. FURTHER, IT IS SEEN THAT THE AMALGAMATION HAS BEEN GIVEN EFFECT TO BY THE REGIST RAR OF COMPANIES (ROC). 5.3 THE ARGUMENTS ADDUCED BY THE AR OF THE APPELLAN T AT THE APPELLATE STAGE AND THE COURT JUDGEMENTS RELIED IN THIS REGARD, ESPECIALLY AT PARAS 4.2 AND 4.2A ABOVE ARE BORNE OU T FROM RECORDS. FURTHER, AMALGAMATION HAS ALSO BEEN TREATE D AT PAR WITH SUCCESSION PURSUANT TO DEATH. IT IS THE AMALGA MATED COMPANY IN THE FORMER AND THE LEGAL SUCCESSOR IN TH E LATTER THAT BEARS THE TAX BURDEN OF THE AMALGAMATING COMPA NIES AND THE DECEASED, RESPECTIVELY. IT HAS BEEN HELD BY THE APEX COURT, IN SARASWATI INDUSTRIAL SYNDICATE LTD. VS CI T (1990) 186 ITR 278, 53 TAXMAN 92 (SC) INTER ALIA '.... THERE CAN BE NO DOUBT THAT WHEN TWO COMPANIES AMALGAMATE AND MERGE INTO ONE, THE TRANSFEROR COMPANY LOSES ITS ENTITY AS IT CEASES TO HAVE ITS BUSINESS. THEIR RESPECTIVE RIGHTS OR LIABILITIES AR E DETERMINED UNDER THE SCHEME OF AMALGAMATION BUT THE CORPORATE ENTITY OF THE TRANSFEROR COMPANY CEASES T O EXIST WITH EFFECT FROM THE DATE THE AMALGAMATION IS MADE EFFECTIVE...' ALSO, THE FOLLOWING COURT DECISIONS ON THE ISSUE HA VE HIGHLIGHTED THAT ASSESSMENT CAN BE MADE ONLY IN THE CASE OF THE SUCCESSOR OR AMALGAMATED COMPANY GENERAL RADIO AND APPLIANCES CO. LTD. VS. M.A. K HADES (1986) 60 COMPANY CASE 1013 (SC) BIRLA SPINNING AND WEAVING MILLS LTD. VS. CIT, [ 1980] 4 TAXMAN 225 (DELHI) CIT-II VS SATWANT EXPORTS PRIVATE LIMITED, ITA N OS. 725 TO 728/2014, DATED 26.11.2014 (DEL) SPICE ENTERTAINMENT LTD. VS. CIT VS. ITA NO. 475 OF 2011 (03.08.2011)(DEL) HEWLETT PACKARD INDIA (P.) LTD. VS ACIT (ITA NO. 4016 / 2005 A Y 2002-03) (ITAT. DEL) 5.4 WITH DUE DEFERENCE TO THE AFOREMENTIONED DECISI ONS OF THE COURTS INCLUDING THE APEX COURT, THE JURISDICTI ONAL HIGH COURT AND THE JURISDICTIONAL TRIBUNAL IN THIS REGAR D AS WELL AS THE FACT THAT THE ISSUE IS IDENTICAL TO THE ONE IN THE PRESENT CASE, AND ACCORDINGLY THE IMPUGNED ORDER IS QUASHED FOR DEVIATION FROM THE LAID DOWN PRINCIPLES WITH REGARD TO AMALGAMATION - THE INCOME EVEN THOUGH HAS BEEN EARN ED BY 7 ITA NO. 4179/DEL./2017 THE AMALGAMATING COMPANY, BUT IF THE INFORMATION RE GARDING THE AMALGAMATION IS AVAILABLE AT THE TIME OF ASSESS MENT, THE ASSESSMENT HAS TO BE DONE IN THE HANDS OF THE AMALG AMATED COMPANY. IN THE PRESENT CASE, IT IS GATHERED FROM R ECORDS THAT EVEN THOUGH THE RETURN OF INCOME HAS BEEN FILED BY THE APPELLANT FOR AY 2009-10 BEFORE ITS AMALGAMATION, A S MENTIONED ABOVE, THE ASSESSMENT VIDE THE IMPUGNED O RDER IS DATED 26.03.2013 IS MUCH AFTER THE AMALGAMATION BUT MADE IN THE NAME OF THE APPELLANT WHICH WAS AN AMALGAMAT ING COMPANY NOT EXISTING IN THE LEGAL SENSE ON THAT DAT E. ACCORDINGLY, THE APPEAL ON THIS POINT IS HEREBY ALL OWED; OF COURSE NOT GOING INTO THE MERITS OF THE CASES (THE DISALLOWANCES MADE IN THE IMPUGNED ORDER) AS THE IM PUGNED ORDER HAS BEEN RENDERED VOID.' 8.9 IT IS SEEN FROM THE ABOVE THAT THE LEARNED CIT (APPEALS) HELD THE ASSESSMENT ORDER TO BE RENDERED VOID AND QUASHE D THE ORDER, AS THE COMPANY IN QUESTION HAD AMALGAMATED, AND THE ASSESSMENT HAD TO BE DONE IN THE HANDS OF THE AMALG AMATED COMPANY. IN SUCH A SITUATION, THE ASSESSMENT MADE I N THE HANDS OF THE AMALGAMATING COMPANY, WHICH WAS NOT EXISTING IN THE LEGAL SENSE ON THAT DATE, WAS VOID. 8.10 IN THE INSTANT CASE, IT IS SEEN THAT THE COMPA NY IN QUESTION, I.E. M/S SATKAR FINCAP LTD. HAD ALREADY AMALGAMATED WITH M/S PRIDE RESIDENCY PVT. LTD., VIDE ORDER DATED 17.08.12 OF H ONBLE HIGH COURT OF DELHI, WITH EFFECT FROM THE APPOINTED DATE , I.E. 01.04.11, PASSED U/S 391(2) AND 394 OF THE COMPANIES ACT, 195 6. 8.11 THE FACT THAT THE COMPANY HAD AMALGAMATED AND HAD CEASED TO EXIST AFTER ITS AMALGAMATION, WAS NOT ONLY RECOG NIZED BY THE INCOME TAX DEPARTMENT, BUT WAS ALSO FULLY IN THE KN OWLEDGE OF THE ASSESSING OFFICER. THIS IS BORNE OUT BY THE DIRECTI ONS ISSUED BY THE LEARNED PRINCIPAL CIT (CENTRAL)-2, NEW DELHI, WHO V IDE HIS ORDER U/S 264 DATED 30.03.15 DIRECTED AS UNDER : THE ASSESSMENT MADE BY THE A.O. U/S 153A HAS BEEN QUASHED ON TECHNICAL GROUNDS BECAUSE THE AO ISSUED AND COMPLETED THE ASSESSMENT IN THE NAME OF A NON-EXIST ING COMPANY AS THE COMPANY HAD CEASED TO EXIST AFTER IT S AMALGAMATION. THERE IS ALSO NO DENYING OF THE FACT THAT CONSEQUENT TO THE SEARCH AND SEIZURE ACTION UPON TH E COMPANY, THERE WERE SIGNIFICANT MATERIAL BEFORE THE A.O. AND THE A.O. HAS COMPLETED THE ASSESSMENT OF THE COMPAN Y AFTER CONSIDERING THE MATERIAL BEFORE HIM AND AFTER MAKIN G VERIFICATION AND SCRUTINY AND AFFORDING THE OPPORTU NITY TO THE ASSESSEE. THE ONLY ERROR WHICH A.O. HAS COMMITTED I S THAT THE ORDER HAS BEEN PASSED IN THE NAME OF A NON-EXISTING 8 ITA NO. 4179/DEL./2017 COMPANY. THIS BEING A TECHNICAL ERROR, THE A.O. IS NOW DIRECTED TO REASSESS THE INCOME IN THE HANDS OF THE EXISTING CORRECT LEGAL ENTITY AFTER GIVING PROPER OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE AND AFTER THE EXAMINATION, SC RUTINY OF ALL THE RELEVANT MATERIAL AND VERIFICATION INCLUDIN G THE SUBMISSIONS MADE BY THE ASSESSEE. TO THIS EXTENT TH ESE DIRECTIONS MAY BE TREATED AS DIRECTIONS U/S 150 OF THE I. T. ACT, 1961. 8.12 THE ABOVE DIRECTIONS ISSUED BY THE LEARNED PRI NCIPAL CIT (CENTRAL)-2, NEW DELHI CLEARLY SPECIFY THAT THE ASS ESSMENT MADE BY THE ASSESSING OFFICER U/S 153A WAS QUASHED ON TECHN ICAL GROUNDS BECAUSE THE A.O. ISSUED NOTICE AND COMPLETED THE AS SESSMENT IN THE NAME OF A NON-EXISTING COMPANY. SUCH CONCLUSION WAS DRAWN BY THE LEARNED PRINCIPAL CIT (CENTRAL)-2 AS THE COMPANY HA D AMALGAMATED, AND ON THIS BASIS HE CONCLUDED THAT TH E COMPANY HAD CEASED TO EXIST. SINCE THE A.O. HAD ISSUED THE NOTICE AND PASSED THE ASSESSMENT ORDER IN THE NAME OF SUCH NON -EXISTING COMPANY, THE ASSESSMENT ORDER WAS QUASHED. 8.13 THE LEARNED PRINCIPAL CIT (CENTRAL)-2, NEW DEL HI VIDE THE ABOVEMENTIONED ORDER U/S 264, DIRECTED THE ASSESSIN G OFFICER TO REASSESS THE INCOME IN THE HANDS OF THE 'EXISTING C ORRECT LEGAL ENTITY AFTER GIVING PROPER OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE AND AFTER THE EXAMINATION, SCRUTINY OF ALL THE RELEVANT MATERIAL AND VERIFICATION. 8.14 IT IS NOTEWORTHY THAT NOT ONLY THE ASSESSING O FFICER WAS AWARE OF SUCH SPECIFIC DIRECTIONS BUT HAS ALSO REPRODUCED SUCH DIRECTIONS ON PAGE 1 & 2 OF ASSESSMENT ORDER. HOWEVER, IN SPIT E OF SUCH CLEAR AND SPECIFIC DIRECTIONS, THE ASSESSING OFFICER AGAI N REPEATED THE EARLIER ACTION OF SERVICE OF NOTICE AND COMPLETION OF ASSESSMENT UPON AMALGAMATING COMPANY, WHICH HAD CEASED TO EXIST. 8.15 THE ASSESSING OFFICER HAS PASSED THE ASSESSMEN T ORDER STATING THE NAME OF THE ASSESSEE AS M/S PRIDE RESI DENCY (P) LTD. (IN THE CASE OF M/S SATKAR FINCAP LTD.). HOWEVER, THE BASIC ACTION INCLUDING SERVICE OF NOTICE BY THE ASSESSING OFFICE R WAS TAKEN IN THE CASE OF M/S SATKAR FINCAP LTD., WHICH HAD AMALGAMAT ED AND HAD CEASED TO EXIST. EVEN THOUGH THE NAME OF M/S PRIDE RESIDENCY (P) LTD. WAS MENTIONED AS THE NAME OF THE ASSESSEE IN T HE ASSESSMENT ORDER BY THE ASSESSING OFFICER, THE ASSESSMENT ORDE R HAS BEEN FRAMED FOR M/S SATKAR FINCAP LTD., WHICH IS ALSO EV IDENT TOM THE FACT THAT THE NOTICES WERE ISSUED, THE ASSESSMENT O RDER WAS PASSED AND NOTICE OF DEMAND U/S 156 OF THE INCOME TAX ACT, 1961 (IN FORM IT.S.-7) WAS ISSUED FOR THE COMPANY HAVING THE PAN : AAJCS6828A, WHICH WAS THE PAN FOR M/S SATKAR FINCAP LTD. FURTHE R, THE ASSESSING OFFICER INVOLVED, I.E. ASSISTANT COMMISSI ONER OF INCOME 9 ITA NO. 4179/DEL./2017 TAX, CENTRAL CIRCLE-13, NEW DELHI, HAD NO JURISDICT ION OVER THE EXISTING CORRECT LEGAL ENTITY, I.E. M/S PRIDE RESID ENCY (P) LTD., OVER WHICH THE JURISDICTION WAS WITH CIRCLE 20(1), NEW D ELHI. THUS, NEITHER THE ACTION WAS TAKEN AGAINST THE EXISTING C ORRECT LEGAL ENTITY, I.E. M7S PRIDE RESIDENCY (P) LTD., NOR THE ASSESSIN G OFFICER INVOLVED I.E. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-13, NEW DELHI COULD HAVE TAKEN ANY LEGAL ACTION AGAINST THE EXISTING CORRECT LEGAL ENTITY, AS THE JURISDICTION OVER IT WAS WITH SOME OTHER ASSESSING OFFICER. IT WAS ALSO SUBMITTED BY THE LEA RNED COUNSEL OF THE APPELLANT THAT THE ASSESSMENT ORDER FOR THE A.Y . 2014-15 IN THE CASE OF M/S PRIDE RESIDENCY (P) LTD. WAS PASSED U/S 143(3) BY THE ASSESSING OFFICER, BEING ACIT, CIRCLE- 20(1), NEW D ELHI ON 26.07.2016, AND A COPY OF THE ORDER WAS ENCLOSED IN THE PAPER BOOK FOR AY 2005-06. 8.16 IT IS CLEAR FROM A PERUSAL OF THE JUDICIAL DEC ISIONS THAT AMALGAMATION HAS BEEN TREATED AT PAR WITH SUCCESSIO N PURSUANT TO DEATH AND THAT IT IS THE AMALGAMATED COMPANY IN THE FORMER AND THE LEGAL SUCCESSOR IN THE LATTER THAT BEARS THE TA X BURDEN OF THE AMALGAMATING COMPANIES AND THE DECEASED, RESPECTIVE LY. THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F SARASWATI INDUSTRIAL SYNDICATE LTD. VS CIT, 186 ITR 278 IS PA RTICULARLY SIGNIFICANT, AS IT HAS BEEN HELD IN THAT CASE THAT WHEN TWO COMPANIES AMALGAMATE AND MERGE INTO ONE, THE TRANSF EROR COMPANY LOSES ITS ENTITY AS IT CEASES TO HAVE ITS B USINESS, AND THEIR RESPECTIVE RIGHTS OR LIABILITIES ARE DETERMINED UND ER THE SCHEME OF AMALGAMATION BUT THE CORPORATE ENTITY OF THE TRANSF EROR COMPANY CEASES TO EXIST WITH EFFECT FROM THE DATE THE AMALG AMATION IS MADE EFFECTIVE. 8.17 IN THE INSTANT CASE, THOUGH THE ASSESSING OFFI CER HAD BEEN DIRECTED U/S 264 TO REASSESS THE INCOME IN THE HAND S OF THE EXISTING CORRECT LEGAL ENTITY, AND THE ASSESSING OFFICER WAR AWARE OF SUCH DIRECTIONS AND HAS EVEN REPRODUCED SUCH DIRECTIONS IN THE ASSESSMENT ORDER, BUT STILL THE ASSESSING OFFICER H AS REPEATED THE SAME ERROR, AS EARLIER, I.E. OF ISSUING NOTICE AND COMPLETING THE ASSESSMENT IN THE HANDS OF A NON-EXISTING COMPANY, WHICH HAD CEASED TO EXIST AFTER ITS AMALGAMATION. THAT SUCH A MALGAMATION WAS PRIOR TO ISSUE OF NOTICE AND COMPLETION OF ASSE SSMENT IS CLEAR FROM THE ASSESSMENT ORDER ITSELF AS THE PROCESS OF ASSESSMENT HAD STARTED PURSUANT TO ORDER U/S 264, WHICH ITSELF MAD E IT CLEAR THAT THE COMPANY HAD ALREADY AMALGAMATED AND HAD CEASED TO EXIST. 8.18 IN VIEW OF THE ABOVE SITUATION, THE APPEAL ON THIS POINT IS HEREBY ALLOWED, WITHOUT GOING INTO THE MERITS OF TH E CASE (I.E. THE ADDITIONS MADE IN THE IMPUGNED ORDER) AND THE ASSES SMENT ORDER IS HELD TO BE VOID. ACCORDINGLY, THE IMPUGNED ORDER IS QUASHED. 10 ITA NO. 4179/DEL./2017 5. WE HAVE HEARD RIVAL SUBMISSION OF PARTIES ON THE I SSUE IN DISPUTE AND PERUSED THE RELEVANT MATERIAL ON RECORD . THERE IS NO DISPUTE ON FOLLOWING FACTS IN RESPECT OF THE PROCEE DINGS UNDERTAKEN IN THE CASE OF THE ASSESSEE: 1. THE SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) WAS CARRI ED OUT AT THE PREMISES OF MRS. SATKAR FINCAP PRIVATE LIMIT ED ON 07/08/2010 . 2. THE ASSESSMENT WAS COMPLETED UNDER SECTION 153A REA D WITH SECTION 143(3) OF THE ACT ON 26/03/2013 AT AN INCOME OF 1,25,03,230/- BY THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-13, NEW DELHI. 3. THE ASSESSEE FILED APPEAL AGAINST THE SAID ORDER BE FORE THE FIRST APPELLATE AUTHORITY WHICH WAS SUBSEQUENTLY WITHDRAWN VIDE LETTER DATED 20/11/2013 AND ACCORDIN GLY DISMISSED AS WITHDRAWN. 4. THE ASSESSEE PREFERRED REVISION APPLICATION ON 21/03/2014 UNDER SECTION 264 OF THE ACT BEFORE THE LD. PCIT, CENTRAL-2, NEW DELHI, STATING THAT THE COMPAN Y M/S SATKAR FINCAP PVT. LTD. GOT AMALGAMATED WITH M/S. P RICE RESIDENCY PRIVATE LIMITED, VIDE ORDER DATED 17/08/2 012 OF HONBLE HIGH COURT OF DELHI WITH EFFECT FROM APP OINTED DATE, I.E., 01/04/2011, PASSED UNDER SECTION 391(2) AND 394 OF THE COMPANIES ACT, 1956 5. THE LD. PCIT ACCORDINGLY, THROUGH HIS ORDER DATED 30/03/2015 UNDER SECTION 264 OF THE ACT, QUASHED TH E ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECT ION 153A OF THE ACT. THE LEARNED PCIT STATED THAT THE A CIT 11 ITA NO. 4179/DEL./2017 CC-13, NEW DELHI, I.E., THE ASSESSING OFFICER WHO P ASSED THE ORDER, HAD COMMITTED THE ERROR OF PASSING ORDER IN THE NAME OF NON-EXISTING ENTITY AND DIRECTED THE ASSESS ING OFFICER TO REASSESS THE INCOME IN THE HANDS OF THE EXISTING CORRECT LEGAL ENTITY AFTER GIVING PROPER OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. 6. THE REVENUE HAS RAISED DISPUTE THAT THE REVISED AS SESSMENT ORDER DATED 23/03/2016, WHICH IS THE IMPUGNED ASSES SMENT ORDER, HAS BEEN PASSED CORRECTLY ON THE AMALGAMATED ENTITY I.E. M/S PRIDE RESIDENCY PRIVATE LIMITED. BUT THE CONTEN TION OF THE ASSESSEE, THAT NOTICE FOR REVISED ASSESSMENT PROCEE DINGS WAS ISSUED ON M/S. SATKAR FINCAP, WHICH IS NOT IN EXIST ENCE ON THE DATE OF ISSUE OF THE NOTICE, BEING ALREADY AMALGAMA TED WITH M/S. PRIDE RESIDENCY PRIVATE LIMITED WITH EFFECT FROM 01 /04/2011 AND THIS FACT WAS ALREADY WITHIN THE KNOWLEDGE OF THE A CIT, CC-13, NEW DELHI. THE ASSESSEE HAS ALSO DISPUTED THAT PAN MENTIONED ON THE ASSESSMENT ORDER DATED 23/03/2016 IS BELONGI NG TO M/S SATKAR FINCAP PRIVATE LIMITED, WHICH IS NON-EXISTEN T ENTITY AND THUS ASSESSMENT HAS BEEN MADE ON NON-EXISTENT ENTIT Y. THE ASSESSEE IN SUPPORT OF CONTENTION HAS RELIED ON THE DECISION OF THE TRIBUNAL IN ASSESSMENT YEAR 2007-08 IN ITA NO. 4176 /DEL./2017, WHEREAS THE REVENUE HAS CONTESTED THAT ERROR OF ISS UE NOTICE IN THE NAME OF NON-EXISTENT ENTITY AND MENTIONING OF I NCORRECT PAN ARE MISTAKE COULD BE CORRECTED U/S 292B OF THE ACT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F SKY LIGHT HOSPITALITY LLP VS. ACIT, IN SPECIAL LEAVE TO APPEAL (C) NO. 7409/2018. 12 ITA NO. 4179/DEL./2017 7. BUT, IN THE INSTANT CASE, WE FIND ANOTHER ILLEGALI TY, WHICH HAS BEEN REFERRED BY THE LEARNED CIT(A). IN THIS CA SE, JURISDICTION OVER THE ASSESSEE, I.E., M/S PRIDE RESIDENCY PVT. L TD. LIED WITH THE ASSISTANT COMMISSIONER OF INCOME, CIRCLE-20(1), NE W DELHI. THE LD. CIT(A) HAS REFERRED TO THE ASSESSMENT ORDER PAS SED BY THE ACIT, CIRCLE-20(1), NEW DELHI FOR ASSESSMENT YEAR 2 014-15 ON 26/07/2016. BUT THE IMPUGNED ASSESSMENT ORDER HAS B EEN PASSED BY THE ACIT, CC-13, NEW DELHI, WHO HAD JURIS DICTION OVER THE AMALGAMATING ENTITY, I.E., M/S STAKAR FINCAP PV T. LTD. THUS, IT IS EVIDENT THAT THE IMPUGNED ASSESSMENT ORDER IN THE NAME OF M/S PRIDE RESIDENCY PRIVATE LIMITED HAS BEEN PASSED BY THE ACIT, CC-13, NEW DELHI, WITHOUT JURISDICTION OVER T HE CASE. 8. IN VIEW OF LACK OF THE JURISDICTION, THE IMPUGNED ASSESSMENT ORDER PASSED BY THE ACIT, CC-13, NEW DELHI, IN THE CASE OF THE ASSESSEE IS VOID-AB INITIO AND ACCORDINGLY QUASHED. AS WE HAVE ALREADY QUASHED THE IMPUGNED ASSESSMENT ORDER DUE T O LACK OF JURISDICTION, THE ISSUE OF ASSESSMENT ON NON-EXISTE NT ENTITY IS RENDERED MERELY ACADEMIC AND WE ARE NOT ADJUDICATIN G UPON THE SAME. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDI NGLY DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH FEBRUARY, 2020. SD/- SD/- (AMIT SHUKLA) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 19 TH FEBRUARY, 2020. RK/- (D.T.D.S.) COPY FORWARDED TO: 1. APPELLANT 13 ITA NO. 4179/DEL./2017 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI