Nirvana Lifestyle P.Ltd(Now merged with M/s TTJ Impes P.Ltd), New Delhi V. ACIT, Central Circle-29, New Delhi

ITA 4793/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3342 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 27-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K JIWANI
• Keywords: Reopening of assessment; Procedural lapse; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO. 4793 /DEL/201 7 [A.Y. 20 0 9 - 10 ] NIRVANA LIFESTYLE PVT. LTD. VS. THE A.C. I . T [NOW MERGED WITH M/S TTJ IMPEX CENTRAL CIRCLE - 29 PVT. LTD, PLOT NO. M - 7, M - 52/53 NEW DELHI GROUND FLOOR GALI NO. 10, ANAND PARBAT INDUSTRIAL AREA N EW DELHI PAN : A ACCN 6439 R [ ASSESSEE ] [RESPONDENT] DATE OF HEARIN G : 2 1 . 0 2 .201 8 DATE OF PRONOUNCEMENT : 09 .0 3 .201 8 ASSESSEE BY : SHRI VED JAIN, ADV SHRI ASHISH CHADHA , CA REVENUE BY : SHRI V.K. JIWANI , SR. DR ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 5 TH JUNE, 2016, PASSED BY THE CIT(A). 2. THE BRIEF FACTS LEADING TO THE PRESENT APPEAL ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE A.Y. UNDER CONSIDERATION ON 30 TH SEPTEMBER, 2009. THE SAID RETURN WAS ACCEPTED UNDER SECTION 143(1). THEREAFTER, THE ASSESSMENT WAS REOPENED BY ISSUE OF NOTICE 2 ITA NO. 4793 /DEL/201 7 UNDER SECTION 148 ON 10 TH MARCH, 2016, ON THE ALLEGATION THAT INCOME HAS EXCAPED ASSESSMENT IN RESPECT OF A SUM OF RS. 10,00,000/ - RECEIVED BY THE ASSESSEE DURING THE YEAR FROM SHALINI HOLDINGS LTD. THE AO BEING NOT SATISFIED WITH THE REPLY OF THE ASSESSEE MADE ADDITION OF RS. 10,00,000/ - IN THE HANDS OF THE ASSESSEE VIDE REASSESSMENT ORDER DATED 28 TH DECEMBER, 2016. 3. AGGRIEVED BY THE ORDER OF T HE AO, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE ASSESSEE RAISED ISSUE ON REOPENING OF ASSESSMENT BEING BAD IN LAW AND ALSO ON MERIT. THE CIT(A) NOT BEING SATISFIED WITH THE SUBMISSION OF THE ASSESSEE DISMISSED THE APPEAL BOTH ON THE ISSUE OF REOPEN ING AS WELL AS ON MERIT. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL AND HAS RAISED 10 GROUNDS OF APPEAL. GROUND NO. 2 IS REGARDING REASSESSMENT BEING FRAMED ON A NON - EXISTENT ENTITY AND READS AS UNDER: (I) ON THE FACTS AND CIRCUM STANCES O THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ORDER PASSED BY THE AO U/S 143(3), DESPITE THE FACT THAT THE SAME HAS BEEN PASSED IN THE NAME OF A NON - EXISTENT ENTITY. 3 ITA NO. 4793 /DEL/201 7 (II) THAT ON THE CIRCUMSTANCES AND FACTS O F THE CASE, THE REASSESSMENT FRAMED IN THE NAME OF M/S NIRVANA LIFESTYLE PRIVATE LIMITED WHICH HAD SINCE AMALGAMATED WITH M/S TTJ IMPEX PRIVATE LIMITED AND HAD CEASED TO EXIST IN THE EYE OF LAW, WAS NO EST. 5. IT WAS SUBMITTED BY THE LD. AR THAT THE REOP ENING OF THE ASSESSMENT AND THE CONSEQUENT ASSESSMENT ORDER PASSE D IN THE NAME OF THE NIRVANA LI FESTYLE PVT. LTD. COMPANY IS BAD IN LAW AS THIS COMPANY WAS NOT IN EXISTENCE ON THE DATE OF THE REOPENING OF THE ASSESSMENT AS WELL AS ON THE DATE ON WHICH THE ASSESSMENT ORDER WAS PASSED. IN THIS REGARD, THE LD. AR INVITED ATTENTION TO THE ORDER PASSED BY THE HONBLE DELHI HIGH COURT DATED 26 TH MAY, 2014 AT PB. PG. 131 - 178 WHEREBY THE COMPANY NAMELY NIRVANA LIFE STYLE PVT LTD GOT AMALGAMATED WITH TTJ IMPEX PVT. LTD. 6. IT WAS SUBMITTED THAT THE ASSESSMENT IN QUES TION IS FOR THE ASSESSMENT YEAR 2009 - 10. THIS ASSESSMENT WAS REOPENED BY ISSUE OF NOTICE UNDER SECTION 148 DATED 10/03/2016. THE NOTICE HAS BEEN ISSUED IN THE NAME OF NIRVANA LIFE STYLE PVT. LTD. AS IS EVIDENT FROM PB. PG. 130. THE COMPANY HAVING GOT AMALGAMATED WITH TTJ IMPEX PVT. LTD AS ON 01/04/2013. THE ENTITY NIRVANA LIFE STYLE PVT. WAS NOT 4 ITA NO. 4793 /DEL/201 7 IN EXISTENCE AS ON 10/03/2016. ON THE BASIS OF ABOVE, IT WAS SUBMITTED THAT THE ENTIRE PROCEEDINGS OF ISSU E OF NOTICE AND REASSESSMENT ORDER ARE BAD IN LAW AND BE QUASHED. THE LD. AR FURTHER SUBMITTED THAT NOTICE UNDER SECTION 148 HAS BEEN ISSUED IN THE NAME OF AN NON EXISTING COMPANY WHICH ITSELF IS BAD IN LAW AS HELD BY THE HONBLE APEX COURT IN THE CASE OF CIT NEW DELHI VS M/S SPICE ENFOTAINMENT LTD [ CIVIL APPEAL NO. 285 OF 2014, 286 OF 2014 DATED 2 - 11 - 2017] WHERE IN THE HONBLE COURT WHILE DISMISSING THE APPEAL OF THE REVENUE HAS UPHELD THE ORDER OF THE DELHI HIGH COURT. 7. THE LD. DR SUBMITTED THAT THE AS SESSEE COMPANY HAVING RECEIVED THE AMOUNT IN THE YEAR UNDER CONSIDERATION, THE SAME NEED TO BE ASSESSED IN THE HANDS OF THE ASSESSEE COMPANY ONLY AND IT DOES NOT MAKE ANY DIFFERENCE IF SUCH COMPANY HAS GOT MERGED LATER ON AND WAS NOT IN EXISTENCE AS ON THE DATE OF REOPENING OF THE ASSESSMENT. 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ISSUE HERE IS VALIDITY OF REOPENING OF THE ASSESSMENT AND THE ASSESSMENT ORDER PASSED CONSEQUENT THEREOF. FROM THE FACTS, IT IS CLEAR THAT NOTICE UNDER SECTION 148 WAS ISSUED ON 10 TH MARCH, 2016 IN THE NAME OF NIRVAN LIFESTYLE PVT. LTD. THIS COMPANY WAS NOT IN EXISTENCE AS ON THAT DATE 5 ITA NO. 4793 /DEL/201 7 I.E. 10 TH MARCH, 2016. THIS COMPANY STOOD MERGED WITH TTJ IMPEX PVT. LTD. IN TERMS OF ORDER PASSED BY THE HONBLE DELHI HIGH COURT ON 26 T H MAY, 2014. POST THIS MERGER, ALL NECESSARY FORMALITIES HAVE BEEN COMPLIED WITH INCLUDING FILING OF FORM NO. INC 28 WITH THE REGISTRAR OF COMPANIES. EVEN INTIMATION TO THIS EFFECT WAS GIVEN TO THE AO VIDE LETTER DATED 14 TH SEPTEMBER, 2014 AND DULY RECEIVE D ON 19 TH OCTOBER, 2014 PLACED AT PB. PG. 183. THUS, THE ISSUE OF NOTICE FOR REOPENING AND CONSEQUENT ASSESSMENT THEREAFTER WAS ON A PERSON WHICH WAS NOT IN EXISTENCE ON THAT DAY AND HENCE THE PROCEEDINGS ARE BAD IN LAW AND LIABLE TO BE QUASHED. THIS ISSU E IS NOW NO MORE RES INTEGRA IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT NEW DELHI VS M/S SPICE ENFOTAINMENT LTD [CIVIL APPEAL NO. 285 OF 2014, 286 OF 2014 DATED 2 - 11 - 2017] WHEREBY THE HONBLE SUPREME COURT UPHOLDING THE ORDER OF THE HONBLE DELHI HIGH COURT ON THIS ISSUE HAS HELD AS UNDER: 12. 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 OF THE ACT. SECTION 292B OF THE ACT READS AS UNDER: - 292B. NO RETURN OF INCOME ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDINGS FURNISHED OR MADE OR ISSUE OR TAKEN OR 6 ITA NO. 4793 /DEL/201 7 PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT SHALL BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY 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, NOT ICE, SUMMONS OR OTHER PROCEEDINGS IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. 9. IN THE PRESENT CASE, IT IS EVIDENT THAT THE ASSESSMENT ORDER, NOTICE OF DEMAND, CONFIRMATION AND PENALTY NOTICES ARE AL SO IN THE NAME OF THE ENTITY WHICH DOES NOT EXIST AS ON THAT DATE. ACCORDINGLY, IN VIEW OF THE ABOVE SETTLED POSITION OF LAW, I HOLD THAT THE REASSESSMENT PROCEEDINGS AND THE ASSESSMENT ORDER PASSED IN CONSEQUENCE THERETO IS BAD IN LAW AND THE SAME IS QUAS HED. SINCE THE ASSESSMENT ORDER ITSELF HAS BEEN QUASHED THE OTHER GROUNDS RAISED BY THE ASSESSEE BECOME ACADEMIC IN NATURE AND HENCE ARE NOT BEEN ADJUDICATED UPON. 7 ITA NO. 4793 /DEL/201 7 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IN ITA NO. 4793/DEL/2017 IS ALLOWED. TH E ORDER IS PRO NOUNCED IN THE OPEN COURT ON 09 . 0 3 .201 8 . SD/ - [B.P. JAIN] ACCOUNTANT MEMBER DATED: 09 TH MARCH, 2018 VL/ COPY FORWARDED TO: 1 . ASSESSEE 2 . RESPO NDENT 3 . CIT ASSISTANT REGISTRAR 4 . CIT(A) ITAT, NEW DELHI 5 . DR