ACIT, Central Circle-19, New Delhi V. M/s Sindhu Trade Links Ltd, New Delhi

ITA 5065/DEL/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5972 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 07-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Keywords: Question of law; Procedural lapse; Competent authority; Scheme of amalgamation; Assessment record
• Section: 143(3); 142(1); 153A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES A : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.NO.5065/DEL./2017 ASSESSMENT YEAR 2009-2010 THE ACIT, CENTRAL CIRCLE-19, ROOM NO.104, ARA CENTRE, E-2, JHANDEWALAN, NEW DELHI. VS M/S. SINDHU TRADE LINKS LTD., 17, VASANT ENCLAVE TULA RAM MARG, NEW DELHI PIN 110057. PAN AACCB4137E (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.14/DEL./2018 ARISING OUT OF ITA.NO.5065/DEL./2017 - ASSESSMENT YEAR 2009-2010 M/S. SINDHU TRADE LINKS LTD., 17, VASANT ENCLAVE TULA RAM MARG, NEW DELHI PIN 110057. PAN AACCB4137E VS THE ACIT, CENTRAL CIRCLE-19, ROOM NO.104, ARA CENTRE, E-2, JHANDEWALAN, NEW DELHI. ( CROSS - OBJECTOR ) (RESPONDENT) FOR REVENUE : SHRI RAVI KANT GUPTA, SR. D.R. FOR CROSS OBJECTOR : SHRI S.K. TULSIYAN, ADVOCATE MS. NISHA RACHH, C.A. & SHRI KARAN KUMRA, C.A. DATE OF HEARING : 17.05.2018 DATE OF PRONOUNCEMENT : 25 .05.2018 2 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. ORDER PER BHAVNESH SAINI, J.M. THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJECTIO N BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. C IT(A)-27, NEW DELHI, DATED 31 ST MAY, 2017, FOR THE A.Y. 2009-2010. THE REVENUE IN THE DEPARTMENTAL APPEAL CHALLENGED THE O RDER OF THE LD. CIT(A) IN HOLDING RE-ASSESSMENT ORDER TO BE VOID ABINITIO AND DELETING THE ADDITION ON MERIT. THE CROSS OBJEC TION FILED IN SUPPORT OF THE ORDER OF THE LD. CIT(A). 2. THE FACTS OF THE CASE ARE THAT ASSESSEE M/S. SI NDHU HOLDING LTD., (IN SHORT M/S.SHL) WAS A COMPANY, INCORPORATED UNDER THE COMPANIES ACT ON 05.02.1992. PURSUANT TO THE JUDGMENT OF THE HONBLE JURISDICTIO NAL DELHI HIGH COURT DATED 19.01.2011 M/S. SINDHU HOLDING LTD ., MERGED WITH M/S. BHANDARI CONSULTANTS & FINANCE LTD ., (IN SHORT M/S. BCFL) AND M/S. BHANDARI CONSULTANTS & FINANCE LTD., (AFTER AMALGAMATION) WAS SUBSEQUENTLY RENAMED AS M/S. SINDHU TRADE LINKS LTD., (IN SHORT M/S. STLL). AS SESSMENT IN 3 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. THE CASE OF ERSTWHILE M/S.SHL WAS ORIGINALLY COMPLE TED UNDER SECTION 153A/143(3) VIDE ORDER DATED 30.03.2015 ON A TOTAL INCOME OF RS.1,01,48,800/-, AFTER GIVING EFFECT TO THE ORDER DATED 09.11.2015, THE TOTAL TAXABLE INCOME WAS REDETERMIN ED TO BE AT RS.99,36,691/-. THE CASE WAS REOPENED UNDER SECTION 147 OF THE I.T. ACT AND NOTICE UNDER SECTION 148 OF THE I. T. ACT DATED 29.03.2016 WAS ISSUED TO M/S.SHL (ASSESSEE) AFTER R ECORDING REASONS UNDER SECTION 148 OF THE I.T. ACT, 1961. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE SUBMITTED VARIOUS LETTERS BEFORE A.O. AND PROCEEDINGS WERE CONCLUDED VIDE ORDER UNDER SECTION 143(3)/147 OF THE I.T. ACT, DATED 28.12.2016 WHEREIN ADDITION OF RS.78,26, 435/- WAS MADE. 3.1. THE ASSESSEE CHALLENGED THE LEGALITY OF THE ASSESSMENT PROCEEDINGS AS WELL AS ADDITION ON MERIT BEFORE LD. CIT(A). THE ASSESSEE BRIEFLY CONTENDED BEFORE LD. C IT(A) THAT THE ASSESSMENT ORDER IS ILLEGAL, INVALID AND VOID ABINITIO AND MERITS QUASHING. NOTICE UNDER SECTION 148 DATED 29.03.2016 INITIATING 4 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. RE-ASSESSMENT PROCEEDINGS IS VOID ABINITIO AND ILLEGAL BECAUSE IT HAS BEEN ISSUED ON AN ENTITY WHICH IS NO LONGER IN EXISTENCE. THE ASSESSEE HAS INTIMATED ABOUT THE MERGER OF THE ASSESSEE WITH OTHER COMPANY VIDE SEVERAL LETTERS TO THE JURI SDICTIONAL OFFICERS. THE A.O. DID NOT TAKE COGNIZANCE OF THE S AME, THEREFORE, RE-ASSESSMENT IS VOID AND ILLEGAL. THERE IS NO BASIS TO MAKE ANY ADDITION AGAINST THE ASSESSEE. 4. THE LD. CIT(A) NOTED THAT ASSESSEE HAS MERGED W ITH M/S. BCFL VIDE ORDER OF THE HONBLE JURISDICTIONAL DELHI HIGH COURT DATED 19.01.2011 WHICH WAS SUBSEQUENTLY RENAM ED AS M/S. STLL. PURSUANT TO SUCH AMALGAMATION, M/S.SHL C EASED TO EXIST. THE MERGER OF THE ASSESSEE WAS INTIMATED TO THE DCIT, CIRCLE-8(1) VIDE LETTER DATED 04.01.2012 AND SUBSEQ UENTLY TO THE A.O. AFTER CENTRALIZATION OF THE CASE I.E., ACIT, C IRCLE-17 VIDE LETTERS DATED 23.12.2014 AND 16.02.2015 WHICH ARE A LSO FILED ON RECORD. THE A.O. RECORDED REASONS FOR REOPENING OF THE ASSESSMENT AND ISSUED NOTICE UNDER SECTION 148 TO M /S.SHL, AN ENTITY WHICH IS NO LONGER IN EXISTENCE, THEREFOR E, NOTICE WAS 5 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. ILLEGAL, INVALID AND VOID ABINITIO . THE ASSESSEE ALSO EXPLAINED THAT ASSESSEE FURNISHED DETAILS OF CLIENT CODE MODI FICATION AND OTHER DETAILS TO SHOW THAT ADDITION IS NOT JUSTIFIE D. HOWEVER, THE A.O. IGNORED THE EXPLANATION OF ASSESSEE AND PASSED RE- ASSESSMENT ORDER WHEREIN ADDITION OF RS.78,26,435/- WAS MADE AGAINST THE ASSESSEE. THE WRITTEN SUBMISSIONS OF TH E ASSESSEE ARE REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSESSEE REITERATED THE SAME FACTS AS WERE EXPLAINED ABOVE. IT WAS EXPLAINED THAT SINCE THE ASSESSEE MERGED WITH M/S. BCFL AS PER JUDGMENT OF THE HONBLE JURISDICTIONAL DELHI HI GH COURT, THEREFORE, IT DID NOT EXIST ON THE DATE OF ISSUE OF NOTICE UNDER SECTION 148 OF THE I.T. ACT. THEREFORE, REASONS REC ORDED UNDER SECTION 148 AND ISSUE OF NOTICE UNDER SECTION 148 T O THE NON- EXISTING ENTITY WAS ILLEGAL, VOID AND INVALID. THE ASSESSEE RELIED UPON SEVERAL DECISIONS OF ITAT, DELHI AND HONBLE J URISDICTIONAL DELHI HIGH COURT IN SUPPORT OF THE CONTENTION THAT RE- ASSESSMENT IS INVALID AND ADDITION ON MERIT IS WHOL LY UNJUSTIFIED. 6 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 5. THE LD. CIT(A) CONSIDERING THE EXPLANATION OF ASSESSEE AND FOLLOWING THE DECISION OF HONBLE JURI SDICTIONAL DELHI HIGH COURT IN THE CASE OF SPICE INFOTAINMENT LTD., VS. CIT I.T. APPEAL NO.4756 OF 2011 DATED 03.08.2011 HELD T HAT RE- ASSESSMENT CANNOT BE HELD TO BE VALID ORDER AND ACC ORDINGLY ANNULLED. THE FINDINGS OF THE LD. CIT(A) IN PARA 6. 1 OF THE ORDER IS REPRODUCED AS UNDER : FINDINGS : 6.1. VIDE GROUND NOS. 1 TO 6, THE APPELLANT HAS S TATED THE ERSTWHILE M/S. SINDHU HOLDINGS LIMITED WAS AMALGAMATED WITH M/S. BHANDARI CONSULTANCY AND FINANCE LIMITED VIDE ORDER OF HONBLE DELHI HIGH CO URT DATED 19.01.2011. PURSUANT TO SUCH AMALGAMATION, M/ S SINDHU HOLDINGS LIMITED CEASED TO EXIST. SUBSEQUENT LY, M/S BHANDARI CONSULTANCY AND FINANCE LIMITED WAS RENAMED AS M/S SINDHU TRADE LINKS LIMITED. IT IS AL SO THE CONTENTION OF THE APPELLANT THAT INTIMATION OF SUCH MERGER 7 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. WAS SUBMITTED WITH JURISDICTIONAL AOS VIDE MULTIPLE LETTERS FROM TIME TO TIME. THE ASSESSMENT RECORDS WERE CALLED FOR AND VERIFIED . BASED ON A PERUSAL OF SUCH ASSESSMENT RECORDS AND COPIES PROVIDED BY THE APPELLANT, IT IS NOTED THAT INTIMAT ION OF AMALGAMATION OF M/S SINDHU HOLDINGS LIMITED WAS IND EED GIVEN TO THE FOLLOWING AUTHORITIES: VIDE LETTER DATED 04.01.2012 BEFORE THE DY./ ASST. COMM. OF INCOME TAX, CIRCLE 8(1), NEW DELHI I.E. TH E JURISDICTIONAL AO; VIDE LETTER DATED 23.12.2014 BEFORE THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 17, NE W DELHI I.E. THE JURISDICTIONAL AO PURSUANT TO SEARCH AND SURVEY PROCEEDINGS AND CENTRALISATION OF CASES; AND VIDE LETTER DATED 16.02.2015 BEFORE THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 17, NE W DELHI I.E. THE JURISDICTIONAL AO PURSUANT TO SEARCH AND SURVEY PROCEEDINGS AND CENTRALISATION OF CASES. 8 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. A PERUSAL OF EACH OF THE ABOVE 3 LETTER REVEALS THA T ERSTWHILE M/S SINDHU HOLDINGS LIMITED HAD PRIOR TO ISSUANCE O F NOTICE U/S 148, SUFFICIENTLY DISCHARGED ITS ONUS OF INTIMATING THE AO REGARDING ITS AMALGAMATION ALONG WITH DOCUMENTARY EVIDENCE. THE CENTRAL ISSUE FOR CONSIDERATION THEREFORE, IS W HETHER THE ASSESSMENT COULD HE FRAMED IN THE CASE OF M/S SINDH U HOLDINGS LIMITED, WHICH CEASED TO EXIST AFTER ITS AMALGAMATION WITH M/S BHANDARI CONSULTANCY AND FINANCE LIMITED VIDE ORDER OF HONBLE DELHI HIGH CO URT DATED 19.01.2011. THE AR HAS RELIED ON DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT AND HONBLE TRIBU NAL ON THE PROPOSITION THAT NOTICES/ASSESSMENT ORDERS IN T HE NAME OF ERSTWHILE ENTITIES OR ENTITIES WHICH CEASED TO EXIST ON THE DATE OF THE NOTICES/ASSESSMENT ORDERS ARE IL LEGAL AND VOID ABINITIO. THE HONBLE HIGH COURT IN THE CASE OF SPICE ENTERTA INMENT VS. CIT (ITA 476 OF 2011 DATED 03.08.2011) DECIDED AS UNDER : 9 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 6. ON THE AFORESAID REASONING AND ANALYSIS, THE TRIBUNAL SUMMED UP THE POSITION IN PARA 14 OF ITS ORDER WHICH READS AS UNDER :- IN THE LIGHT OF THE DISCUSSIONS MADE ABOVE, WE, THEREFORE, HOLD THAT TH E ASSESSMENT MADE BY THE AO, IN SUBSTANCE AND EFFECT, IS NOT AGAINST THE NON-EXISTENT AMALGAMATING 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 ASSESSMENT MADE AGAINST NON-EXISTENT PERSON WOULD BE INVALID AND LIABLE TO BE STRUCK DOWN. BUT, IN THE PRESENT CASE, WE FIND THAT THE ASSESSMENT, IN SUBSTANCE AND EFFECT, HAS BEEN MADE AGAINST AMALGAMATED COMPANY IN RESPECT OF ASSESSMENT OF INCOME OF AMALGAMATING COMPANY FOR THE PERIOD PRIOR TO AMALGAMATION AND MERE OMISSION TO MENTION THE NAME OF AMALGAMATED COMPANY ALONG WITH THE NAME OF AMALGAMATING COMPANY IN THE BODY OF ASSESSMENT AGAINST THE ITEM NAME OF TH E ASSESSEE IS NOT FATAL TO THE VALIDITY OF ASSESSMEN T BUT IS A PROCEDURAL DEFECT COVERED BY SECTION 292B OF T HE ACT. WE HOLD ACCORDINGLY. 10 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 7. THE AFORESAID LINE OF REASONING ADOPTED BY THE TRIBUNAL IS CLEARLY BLEMISHED WITH LEGAL LOOPHOLES AND IS CONTRARY TO LAW. NO DOUBT, M/S SPICE WAS AN ASSESSEE AND AS AN INCORPORATED COMPANY AND WAS IN EXISTENCE WHEN IT FILED THE RETURNS IN RESPECT O F TWO ASSESSMENT YEARS IN QUESTIONS. HOWEVER, BEFORE THE CASE COULD BE SELECTED FOR SCRUTINY AND ASSESSMENT PROCEEDINGS COULD BE INITIATED, M/S SPICE GOT AMALGAMATED WITH MCORP PVT. LTD. IT WAS THE RESULT OF THE SCHEME OF THE AMALGAMATION FILED BEFORE THE COMPANY JUDGE OF THIS COUP WHICH WAS DULLY SANCTIONED VIDE ORDERS DATED 11TH FEBRUARY, 2004. WITH THIS AMALGAMATION MADE EFFECTIVE FROM 1ST JULY, 2003, M/S SPICE CEASED TO EXIST. THAT IS THE P LAIN AND SIMPLE EFFECT IN LAW. THE SCHEME OF AMALGAMATION ITSELF PROVIDED 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 OFF FROM THE ROLL S OF COMPANIES MAINTAINED BY THE REGISTRAR OF COMPANIES. 11 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 8. A COMPANY INCORPORATED UNDER THE INDIAN COMPANIES ACT IS A JURISTIC PERSON. IT TAKES ITS BI RTH AND GETS LIFE WITH THE INCORPORATION. IT DIES WITH THE DISSOLUTION AS PER THE PROVISIONS OF THE COMPANIES ACT. IT IS TRITE LAW THAT ON AMALGAMATION, THE AMALGAMATING COMPANY CEASES TO EXIST IN THE EYES OF LAW. THIS POSITION IS EVEN ACCEPTED BY THE TRIBUNAL IN PARA-14 OF ITS ORDER EXTRACTED ABOVE. HAVING 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 SYNDICATE LTD. VS. CIT, 186 ITR 278 THE LEGAL POSITION IS EXPLAINED IN THE FOLLOWING TERMS: THE QUESTION IS WHETHER ON THE AMALGAMATION OF THE INDIAN SUGAR COMPANY WITH THE APPELLANT COMPANY, THE 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 12 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. HIGH COURT IN PROCEEDINGS UNDER 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 COMPANY, NAMELY, THE TRANSFEROR COMPANY. UNDER THE SCHEME OF AMALGAMATION THE INDIAN SUGAR COMPANY STOOD DISSOLVED ON 29TH OCTOBER, 1962 AND IT CEASED TO BE IN EXISTENCE THEREAFTER. THOUGH THE SCHEME PROVIDED THAT THE TRANSFEREE COMPANY THE SARASWATI INDUSTRIAL SYNDICATE LTD. UNDERTOOK TO MEET ANY LIABILITY OF THE INDIAN SUGAR COMPANY WHICH THAT COMPANY INCURRED OR IT COULD INCUR, ANY LIABILITY, BEFORE THE DISSOLUTION OR NOT THEREAFTER . GENERALLY, WHERE ONLY ONE COMPANY IS INVOLVED IN CHANGE AND THE RIGHTS OF THE SHARE HOLDERS AND CREDITORS ARE VARIED, IT AMOUNTS TO RECONSTRUCTION OR REORGANISATION 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 BLENDING OF TWO OR MORE EXISTING UNDERTAKINGS INTO ONE UNDERTAKING, 13 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. THE SHARE HOLDERS OF EACH BLENDING COMPANY BECOME SUBSTANTIALLY THE SHARE HOLDERS IN THE COMPANY WHICH IS TO CARRY ON THE BLENDED UNDERTAKINGS. THER E MAY BE AMALGAMATION EITHER BY THE TRANSFER OF TWO OR MORE UNDERTAKINGS TO A NEW COMPANY, OR BY THE TRANSFER OF ONE OR MORE UNDERTAKINGS TO AN EXISTING COMPANY. STRICTLY 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 HALSBURYS 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 COMPANY OR ONE IS ABSORBED INTO ONE OR BLENDED WITH ANOTHER, THE AMALGAMATING COMPANY LOSES ITS ENTITY. 14 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 9. THE COURT REFERRED TO ITS EARLIER JUDGMENT IN GENERAL 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 DIFFICUL T TO DIGEST THE CIRCUITOUS ROUTE ADOPTED BY THE TRIBUNAL HOLDING THAT THE ASSESSMENT WAS IN FACT IN THE NAME OF AMALGAMATED COMPANY AND THERE WAS ONLY A PROCEDURAL DEFECT. 10. SECTION 481 OF THE COMPANIES ACT PROVIDES FOR DISSOLUTION OF THE COMPANY. THE COMPANY JUDGE IN THE HIGH COURT CAN ORDER DISSOLUTION OF A COMPANY ON THE GROUNDS STATED THEREIN. THE EFFECT OF THE DISSOLUTION 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 INSHORE), 1986 BCLC 342 (CA) THAT ONCE A COMPANY IS DISSOLVED IT BECOMES A NON-EXISTENT PARTY AND THEREFORE NO ACTION CAN BE BROUGHT IN ITS NAME. THUS AN INSURANCE COMPANY WHICH WAS SUBROGATED TO THE RIGHTS OF ANOTHER INSURED COMPANY WAS HELD NOT TO BE ENTITLED TO 15 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. MAINTAIN AN ACTION IN THE NAME OF THE COMPANY AFTER THE LATTER HAD BEEN DISSOLVED'. 11. AFTER THE SANCTION OF THE SCHEME ON 11TH APRIL, 2004, THE SPICE CEASES TO EXIT W.E.F. 1ST JULY, 200 3. EVEN 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 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 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 BE TREATED AS PROCEDURAL DEFECT. MERE PARTICIPATION BY THE APPELLANT WOULD BE OF NO EFFEC T AS THERE IS NO ESTOPPEL AGAINST LAW. 16 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 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, SUMMONS OR OTHER PROCEEDINGS FURNISHED OR MADE OR ISSUE OR TAKEN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF T HE 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 INCOM E, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDINGS IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. 13. THE PUNJAB & HARYANA HIGH COURT STATED T HE EFFECT OF THIS PROVISION IN CIT VS. NORTON MOTORS, 275 ITR 595 IN THE FOLLOWING MANNER:- 17 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. A READING OF THE ABOVE REPRODUCED PROVISION MAKES IT CLEAR THAT A MISTAKE, DEFECT OR OMISSION IN THE RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS NOT SUFFICIENT TO INVALIDATE AN ACTIO N TAKEN BY THE COMPETENT AUTHORITY, PROVIDED THAT SUC H RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE PROVISIONS OF T HE ACT. TO PUT IT DIFFERENTLY, SECTION 292B CAN BE REL IED UPON FOR RESISTING A CHALLENGE TO THE NOTICE, ETC., ONLY IF THERE IS A TECHNICAL DEFECT OR OMISSION IN IT. HOWE VER, THERE IS NOTHING IN THE PLAIN LANGUAGE OF THAT SECT ION FROM WHICH IT CAN BE INFERRED THAT THE SAME CAN BE RELIED UPON FOR CURING A JURISDICTIONAL DEFECT IN T HE ASSESSMENT NOTICE, 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 CANNOT 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 18 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. (P&H). THAT WAS A CASE WHERE RETURN IN QUESTION FIL ED BY THE ASSESSEE WAS NEITHER SIGNED BY THE ASSESSEE NOR VERIFIED IN TERMS OF THE MANDATE OF SECTION 140 OF THE ACT. THE COURT WAS OF THE OPINION THAT SUCH A RETUR N CANNOT BE TREATED AS RETURN EVEN A RETURN FILED BY THE ASSESSEE AND THIS INHERENT DEFECT COULD NOT BE CURE D INSPITE OF THE DEEMING EFFECT OF SECTION 292B OF TH E ACT. THEREFORE, THE RETURN WAS ABSOLUTELY INVALID AND ASSESSMENT COULD NOT BE MADE ON A INVALID RETURN. I N 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 A O TO IGNORE A DEFECT OF A SUBSTANTIVE NATURE AND IT I S, THEREFORE, THAT THE AFORESAID PROVISION CATEGORICAL LY RECORDS THAT A RETURN WOULD NOT BE TREATED AS INVAL ID, IF THE SAME 'IN SUBSTANCE AND EFFECT IS IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT' . INSOFAR AS THE RETURN UNDER REFERENCE IS CONCERNED, IN TERMS OF SECTION 140 OF THE 1961 ACT, THE SAME CANN OT 19 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. BE TREATED TO BE EVEN A RETURN FILED BY THE RESPOND ENT ASSESSEE, AS THE SAME DOES NOT EVEN BEAR HER SIGNAT URES AND HAD NOT EVEN BEEN VERIFIED BY HER. IN THE AFORE SAID VIEW OF THE MATTER, IT IS NOT POSSIBLE FOR US TO AC CEPT THAT THE RETURN ALLEGEDLY FILED BY THE ASSESSEE WAS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. THUS VIEWED, IT IS NOT POSSIBLE FOR US TO ACCEPT THE CONTENTION ADVANC ED BY THE LEARNED COUNSEL FOR THE APPELLANT ON THE BAS IS OF SECTION 292B OF THE 1961 ACT. THE RETURN UNDER 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 HIGH COURT HELD THAT THE ISSUE OF NOTICE UNDER SECT ION 148 OF THE INCOME TAX ACT IS A CONDITION PRECEDENT TO THE VALIDITY OF ANY ASSESSMENT ORDER TO BE PASSED UNDER SECTION 147 OF THE ACT AND WHEN SUCH A NOTICE IS 20 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. NOT ISSUED AND ASSESSMENT MADE, SUCH A DEFECT CANNO T BE TREATED AS CURED UNDER SECTION 292B OF THE ACT. THE COURT OBSERVED THAT THIS PROVISIONS CONDONES THE INVALIDITY WHICH ARISES MERELY BY MISTAKE, DEFECT O R OMISSION IN A NOTICE, IF IN SUBSTANCE AND EFFECT IT IS IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURP OSE OF THIS ACT. SINCE NO VALID NOTICE WAS SERVED ON TH E ASSESSEE TO REASSESS THE INCOME, ALL THE CONSEQUENT PROCEEDINGS WERE NULL AND VOID AND IT WAS NOT A CAS E OF IRREGULARITY. THEREFORE, SECTION 292B OF THE ACT HAD NO APPLICATION. 16. WHEN WE APPLY THE RATIO OF AFORESAID CASE S TO THE FACTS OF THIS CASE, THE IRRESISTIBLE CONCLUSION WOULD BE PROVISIONS OF SECTION 292B OF THE ACT ARE NOT APPLICABLE IN SUCH A CASE. THE FRAMING OF ASSESSMEN T AGAINST A NON-EXISTING ENTITY/PERSON GOES TO THE RO OT OF THE MATTER WHICH IS NOT A PROCEDURAL IRREGULARITY B UT A JURISDICTIONAL DEFECT AS THERE CANNOT BE ANY ASSESS MENT AGAINST A DEAD PERSON. 21 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 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. IN CIT VS MICRON STEEL (P) LTD. (SUPRA) THE HONBLE DELHI HIGH COURT (ITA NO. 19 TO 24 OF 2014) HELD AS UNDER : 6. THIS COURT NOTICES, AT THE OUTSET, THAT THE IS SUE URGED IS NO LONGER RES INTEGRA. AS STATED EARLIER, SPICE ENTERTAINMENT LTD. (SUPRA) IS AN AUTHORITY FOR THE PROPOSITION THAT COMPLETION OF ASSESSMENT IN RESPEC T OF A NON-EXISTENT COMPANY, DUE TO THE AMALGAMATION ORDER, WOULD RENDER ASSESSMENT IN THE NAME AND IN RESPECT OF THE ORIGINAL ASSESSEE-COMPANY, A NULLITY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT, C- II VS MICRA INDIA (P) LTD. IN ITA 441, 444, 445, 446, 452 AND 461/2013 VIDE ORDER DATED 22.01.2005 HELD AS UNDER : 6. IN A CASE OF AMALGAMATION, THE PREDECESSOR OF T HE ASSESSEE (BEING A DISSOLVED COMPANY) CANNOT BE FOUND. CONS EQUENTLY, SECTION 170(2) OF THE ACT APPLIES. THIS PROVISION C LARIFIES THAT WHERE THE PREDECESSOR CANNOT BE FOUND, 22 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 'THE ASSESSMENT OF THE INCOME OF THE PREVIOUS YEAR IN WHICH THE SUCCESSION TOOK PLACE UP TO THE DATE OF THE SUC CESSION AND OF THE PREVIOUS YEAR PRECEDING THAT YEAR SHALL BE MADE ON THE SUCCESSOR IN LIKE MANNER AND TO THE SAME EXT ENT AS IT WOULD HAVE BEEN MADE ON THE PREDECESSOR. (EMPHASIS SUPPLIED) 7. THE REVENUE, HOWEVER, URGES THAT THE ASSESSMENT IS JUSTIFIED BECAUSE THE LIABILITIES OF THE AMALGAMATI NG COMPANY ACCRUE TO THE AMALGAMATED (TRANSFEREE) COMPANY. WHI LE THAT IS TRUE, THE QUESTION HERE IS WHICH ENTITY MUST THE ASSESSMENT BE MADE ON. THE TEXT OF SECTION 170(2) MAKES IT CLE AR THAT THE ASSESSMENT MUST BE MADE ON THE SUCCESSOR (I.E., THE AMALGAMATED COMPANY). 8. IN SARASWATI INDUSTRIAL SYNDICATE (SUPRA) IT WAS H ELD THAT : AFTER THE AMALGAMATION OF THE TWO COMPANIES THE TR ANSFEROR COMPANY CEASED TO HAVE ANY ENTITY AND THE AMALGAMAT ED COMPANY ACQUIRED A NEW STATUS AND IT WAS NOT POSSIB LE TO TREAT THE TWO COMPANIES AS PARTNERS OR JOINTLY LIAB LE IN RESPECT OF THEIR LIABILITIES AND ASSETS. 23 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. IN VIVID MARKETING (SUPRA), THIS COURT 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 REGIST RAR OF COMPANIES U/S 560 OF THE COMPANIES ACT. IN THESE CIRCUMSTANCES, THE TRIBUNAL RIGHTLY HELD THAT THERE COULD NOT HAVE BEEN ANY ASSESSMENT ORDER PASSED AGAINST THE C OMPANY WHICH WAS NOT IN EXISTENCE AS ON THAT DATE IN THE E YES OF LAW IT HAD ALREADY BEEN DISSOLVED. IT WAS FURTHER HELD THAT SECTION 176 OF THE ACT, WH ICH ENACTS PROVISIONS RELATING TO DISCONTINUATION OF BUSINESS, DOES NOT APPLY TO A CASE OF AMALGAMATION/ DISSOLUTION. IT WA S FURTHER HELD THAT SECTION 159 OF THE ACT, WHICH PROVIDES FO R TAX LIABILITY TO BE ATTACHED TO THE LEGAL REPRESENTATIV ES OF A DECEASED PERSON, IS ALSO INAPPLICABLE. THE LANGUAGE OF SECTION 159 EX-FADE APPLIES TO NATURAL PERSONS, AND CANNOT BE EXTENDED, THROUGH A LEGAL FICTION, TO THE DISSOLUTI ON OF COMPANIES. 9. THERE IS ANOTHER ASPECT IN THESE APPEALS, WHICH IS THE APPLICABILITY OF SECTION 292B OF THE ACT. SECTION 2 92B, INTER ALIA, PRESCRIBES THAT PROCEEDINGS ETC. INITIATED CA NNOT BE 24 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. DEEMED INVALID MERELY BY REASON OF MISTAKE, DEFECT OR OMISSION IN ANY RETURN OF INCOME, ASSESSMENT OR NO TICE. THE REVENUE HAD ARGUED THAT THIS PROVISION NEUTRALI ZES PROCEDURAL DEFECTS IN JURISDICTION. IN THESE CIRCUM STANCES, IT WAS SUBMITTED, HAVING REGARD TO THE ASSESSEES OMIS SION TO URGE THE SO-CALLED ILLEGALITY AT THE THRESHOLD, THE COURT OUGHT TO INTERFERE WITH THE ORDER OF THE ITAT. THIS QUESTION, TOO, HAS BEEN DEALT WITH - IN CIT V. DIMENSION APPA RELS PVT. LTD. REPORTED IN (2015) 370 ITR 288. IN THAT CASE, AFTER NOTICING SECTION 292B, THE COURT DISCUSSED THE RULI NG IN SPICE ENTERTAINMENT (SUPRA), WHEREIN IT HAD BEEN HE LD THAT SINCE THE ASSESSMENT MADE IN SUCH CASES IS AGAINST AN AMALGAMATED COMPANY IN RESPECT OF INCOME OF THE AMALGAMATING COMPANY FOR THE PERIOD PRIOR TO THE AMALGAMATION, THE INCOME TAX AUTHORITIES ARE NEVERT HELESS UNDER AN OBLIGATION TO SUBSTITUTE THE SUCCESSOR IN PLACE OF THE AMALGAMATED COMPANY. THUS, SUCH A DEFECT CANN OT BE TREATED AS PROCEDURAL DEFECT. IN ANY EVENT, IT IS TO BE NOTED THAT THE FACT OF AMALGAMATION OF THE ASSESSEE WITH THE TRANSFEREE COMPANY HAD BEEN INTIMATED AND DISCLOSED IN RESPONSE TO THE NOTICE UNDER SECTION 153C ON 22.11. 2010. ACCORDINGLY, THIS GROUND, TOO, HAS NO MERIT AND IS REJECTED. 25 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 10. IN THE PRESENT CASE, NO DOUBT THERE WAS PARTICIPA TION DURING THE COURSE OF ASSESSMENT; HOWEVER, THE AO, D ESPITE BEING TOLD THAT THE ORIGINAL COMPANY WAS NO LONGER IN EXISTENCE, DID NOT TAKE REMEDIAL MEASURES AND DID N OT TRANSPOSE THE TRANSFEREE AS THE COMPANY WHICH HAD T O BE ASSESSED. INSTEAD, HE RESORTED TO A PECULIAR PROCED URE OF DESCRIBING THE ORIGINAL ASSESSEE AS THE ONE IN EXIS TENCE; THE ORDER ALSO MENTIONED THE TRANSFEREE'S NAME BELOW TH AT OF M/S MICRA INDIA PVT. LTD. NOW, THAT DID NOT LEAD TO T HE ASSESSMENT BEING COMPLETED IN THE NAME OF THE TRANS FEREE COMPANY. ACCORDING TO THE AO, M/S MICRA INDIA PVT. LT D. WAS STILL IN EXISTENCE. CLEARLY, THIS WAS A CASE WH ERE THE ASSESSMENT WAS CONTRARY TO LAW, AS HAVING BEING COM PLETED AGAINST A NON-EXISTENT COMPANY. THE ITAT'S DECISION IS, IN THE CIRCUMSTANCES, JUSTIFIED AND WARRANTED. 11. FOR THE ABOVE REASONS IT IS HELD THAT THESE AP PEALS DO NOT INVOLVE ANY SUBSTANTIAL QUESTION OF LAW AND OF LIABILITY. THE APPEALS ARE ACCORDINGLY DISMISSED. THE HONBLE JURISDICTIONAL ITAT IN THE CASE OF MARUTI SUZUKI INDIA LTD. VS DCIT CIRCLE 16(1), NEW DELHI (IT APPE AL NO. 288 (DELHI) OF 2016) HELD AS UNDER : 26 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE AMALGAMATING COMPANY M/S SUZUKI POWERTRAIN INDIA LTD. AMALGAMATED WITH M/S MARUTI SUZUKI INDIA LTD. W.E.F. 01.04.2012, AS A RES ULT OF SCHEME OF AMALGAMATION DULY APPROVED BY THE HONBLE DELHI HIGH COURT VIDE ORDER DATED 29.01.201 3 AND THE ASSESSMENT IN THIS HAS BEEN FRAMED BY THE A O VIDE ORDER DATED 03.03.2015. THEREFORE, IT IS CLEAR THAT WHEN THE ASSESSMENT ORDER WAS PASSED ON 03.03.2015, M/S SUZUKI POWERTRAIN INDIA LTD. WAS NOT INEXISTENCE . IT IS ALSO NOTICED THAT THE AFORESAID FACT WAS IN T HE KNOWLEDGE OF THE DEPARTMENT AS THE ASSESSEE INFORME D VIDE VARIOUS LETTERS MENTIONED IN PARA 5 OF THE FOR MER PART OF THIS ORDER WHICH WERE WRITTEN TO THE VARIOU S TAX AUTHORITIES. HOWEVER, THE AO IN SPITE OF KNOWIN G THIS FACT THAT M/S SUZUKI POWERTRAIN INDIA LTD. AMALGAMATED WITH M/S MARUTI SUZUKI INDIA LTD., MADE THE REFERENCE TO THE TPO AND ALSO ISSUED THE NOTICE DATED 07.11.2014 TO THE NON-EXISTENT ENTITY I.E. 27 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. M/S SUZUKI POWERTRAIN INDIA LTD. 13. IN THE PRESENT CASE ALSO AS THE ASSESS MENT WAS FRAMED IN THE NAME OF NON EXISTING ENTITY I.E. M/S SUZUKI POWERTRAIN INDIA LTD. WHICH AMALGAMATED WITH M/S MARUTI SUZUKI INDIA LTD. AND THIS IRREGULARITY WAS NOT CURABLE. THEREFORE, THE ASSESSMENT ORDER PASSED BY THE AO IN THE NAME OF NON- EXISTING ENTITY WAS VOID AB INITIO AND DESERVE S TO BE QUASHED, WE ORDER ACCORDINGLY. ADVERTING TO THE CASE ON HAND, THE FACTS ARE SIMILA R. THE NOTICE U/S 148 IS NAMED IN THE NAME OF M/S SINDHU HOLDINGS LIMITED, A COMPANY WHICH DID NOT EXIST ON THE DATE OF SUCH NOTICE I.E. ON 29.03.2016 IN VIEW OF I TS AMALGAMATION WITH M/S BHANDARI CONSULTANCY AND FINANCE LIMITED VIDE ORDER OF HONBLE DELHI HIGH CO URT DATED 19.01.2011. THIS FACT OF MERGER/AMALGAMATION OF ERSTWHILE M/S SINDHU HOLDINGS LTD. WAS SUBMITTED VI DE 28 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. VARIOUS LETTERS BY THE COMPANY PRIOR TO ISSUANCE OF NOTICE U/S 148 AND ALSO REITERATED SUBSEQUENTLY. IT IS SETTLED LAW THAT FRAMING OF ASSESSMENT OR ISS UANCE OF NOTICE AGAINST A NON EXISTING ENTITY/PERSON GOES TO THE ROOT OF THE MATTER WHICH IS NOT A PROCEDURAL IRREGULARIT Y BUT A JURISDICTIONAL DEFECT AS THERE CANNOT BE ANY NOTICE / ASSESSMENT AGAINST A DEAD PERSON AND AS SUCH THE NOTICE U/S 148 IS A NULLITY. CONSEQUENTLY, THE PROCEEDINGS INITIATED U/S 148 AND THE ASSESSMENT ORDER U/S 147 R.W.S. 143(3) ARE ALSO A NULLITY. IN VIEW OF THE RULINGS O F THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI AND TRIBUNAL REF ERRED ABOVE, WHICH CLEARLY APPLIES TO FACTS OF THE CASE, THE NOTICE FRAMED AGAINST THE NON EXISTENT ENTITY/PERSON IS A JURISDICTIONAL DEFECT AND CANNOT BE SUSTAINED. RESP ECTFULLY FOLLOWING THE RATIO OF THE DECISIONS OF THE HONBLE JURISDICTIONAL COURTS REFERRED ABOVE, THE ASSESSMEN T ORDER CANNOT BE HELD AS VALID ORDER AND IS ACCORDINGLY AN NULLED. 29 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 6. THE ASSESSEE ALSO CHALLENGED THE ADDITION ON ME RIT AND WRITTEN SUBMISSIONS OF THE ASSESSEE IS REPRODUC ED IN THE APPELLATE ORDER. HOWEVER, THE LD. CIT(A) HELD THAT SINCE RE- ASSESSMENT ORDER HAVE BEEN ANNULLED, THEREFORE, THE GROUND ON MERIT ARE LEFT WITH ACADEMIC DISCUSSION, THEREFORE, SAME WAS NOT ADJUDICATED. THE APPEAL OF ASSESSEE WAS ALLOWED. 7. THE LD. D.R. RELIED UPON THE ORDER OF THE A.O. AND ALSO RELIED UPON THE DECISION OF HONBLE JURISDICTI ONAL DELHI HIGH COURT IN THE CASE OF SKYLINE HOSPITALITY LLP VS. AC IT DATED 02.02.2018 WHICH IS CONFIRMED BY THE HONBLE SUPREM E COURT BY DISMISSING THE SLP OF THE ASSESSEE VIDE JUDGMENT DATED 06.04.2018. 8. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSE SSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND REFERRED TO PB-53 WHICH IS NOTICE UNDER SECTION 148 DATED 29.03.2016 ISSUED IN THE NAME OF M/S.SHL. PB-54 IS REASONS RECORDED UNDER SECTION 148 WHICH IS ALSO ISSUED IN THE NAME OF M/S.SHL. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE 30 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. SAME ISSUE CAME UP FOR CONSIDERATION BEFORE ITAT, D ELHI BENCH IN THE CASE OF THE ASSESSEE AND OTHER GROUP CASES V IDE ORDER DATED 05.01.2018. THE CASE OF M/S. SHL WAS CONSIDER ED FOR A.Y. 2008-2009 IN ITA.NO.446/DEL./2016 AND C.O.NO.121/DE L./ 2016. THE FINDINGS OF THE TRIBUNAL IN PARA 38 OF TH E ORDER IS REPRODUCED AS UNDER : 38. ALL THESE ISSUES ARE SIMILAR AS HAVE BEEN DEC IDED IN THE CASE OF M/S. GARUDA IMAGING AND DIAGNOSTIC P VT. LTD., NEW DELHI (SUPRA) IN A.YS. 2007-08, 2009-10 A ND 2010-2011. FOLLOWING THE REASONS FOR DECISION OF TH E SAME, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AN D QUASH THE ASSESSMENTS. THE DEPARTMENT APPEAL FAILS ON THE SE GROUND. HOWEVER, THE CROSS OBJECTION OF ASSESSEE AR E ALLOWED. 8.1. IN THE CASE, THE ORDER IN THE CASE OF M/S. GA RUDA IMAGING AND DIAGNOSTIC PVT. LTD., NEW DELHI FOR A.Y . 2007-2008 AND OTHERS HAVE BEEN FOLLOWED. THE FINDINGS IN THAT CASE IN PARAS 12 TO 15 ARE REPRODUCED AS UNDER : 31 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 12. ON GROUND NO.1 OF THE CROSS-OBJECTION, THE ASSESSEE SUBMITTED THAT THE ASSESSMENT ORDER PASSED BY THE A.O. AND SUBSEQUENTLY THE DEPARTMENTAL APPEAL A RE BAD IN LAW AND VOID ABINITIO AS THE SAME HAVE BEEN FRAM ED BY THE REVENUE DEPARTMENT ON A MERGED ENTITY, WHICH IS NO LONGER IN EXISTENCE. 13. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE ASSESSEE COMPANY M/S. GARUDA IMAGING AND DIAGNOSTICS PVT. LTD., M/S. SINDHU HOLDINGS LTD., A ND OTHER COMPANIES HAVE MERGED WITH M/S. BHANDARI CONSULTANC Y AND FINANCE LTD., VIDE JUDGMENT DATED 19 TH JANUARY, 2011 PASSED BY THE HONBLE DELHI HIGH COURT IN A SCHEME OF AMALGAMATION PURSUANT TO SECTION 391 AND 394 AND OT HER RELEVANT PROVISIONS OF THE COMPANIES ACT. COPY OF T HE JUDGMENT DATED 19 TH JANUARY, 2011 IS FILED AT PAGE-75 OF THE PAPER BOOK. HE HAS REFERRED TO PB-116 OF THE PA PER BOOK WHICH IS JUDGMENT OF THE HONBLE DELHI HIGH COURT D ATED 19 TH JANUARY, 2011 IN WHICH THE ASSESSEE COMPANY MERGED 32 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. WITH M/S. BHANDARI CONSULTANCY AND FINANCE LTD., FR OM THE APPOINTED DATE I.E., 1 ST APRIL, 2009. HE HAS SUBMITTED THAT A.O. PASSED THE ASSESSMENT ORDER ON 30 TH MARCH, 2015 ON A NON-EXISTING ASSESSEE COMPANY. HE HAS ALSO SUBMIT TED THAT ON THE DATE OF SEARCH ON 12 TH APRIL, 2012, ON THE DATE OF ISSUE OF NOTICE UNDER SECTION 153A OF THE I.T. A CT ON 23 RD OCTOBER, 2013, AND ALSO ON THE DATE OF ISSUE OF NOT ICE UNDER SECTION 142(1) AND 143(2) OF THE I.T. ACT, AND RESU LTANT ASSESSMENT ORDER PASSED UNDER SECTION 153A/143(3) O N 30 TH MARCH, 2015 ON A NON-EXISTING ENTITY, IS VOID ABIN ITIO AND BAD IN LAW. THE A.O. PASSED THE ASSESSMENT ORDE R IN THE NAME OF NON-EXISTING COMPANY (ASSESSEE). HE HAS THEREFORE, SUBMITTED THAT NOTICES ISSUED AND ASSESS MENT FRAMED ON A NON-EXISTING ENTITY WERE ILLEGAL, NULL AND VOID. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON TH E SEVERAL DECISIONS OF THE TRIBUNAL AND OTHERS. 14. ON THE OTHER HAND, LD. D.R. RELIED UPON THE OR DER OF THE A.O. 33 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. 15. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. THE ASSESSEE HAS FILED JUDGMENT OF THE HONBLE DELHI HI GH COURT DATED 19 TH JANUARY, 2011, ACCORDING TO WHICH, ASSESSEE- COMPANY HAS MERGED WITH M/S. BHANDARI CONSULTANCY A ND FINANCE LTD., IN THE SCHEME OF AMALGAMATION PURSUAN T TO SECTIONS 391 AND 394 OF THE COMPANIES ACT VIDE COMP ANY PETITION 283/10 AND COMPANY APPLICATION NO.74 OF 20 10. THE APPOINTED DATE IS 1 ST APRIL, 2009. THE SEARCH IS HOWEVER, CONDUCTED ON 12 TH APRIL, 2012 AND ON THE DATE OF SEARCH I.E., ON 12 TH APRIL, 2012, THE ASSESSEE-COMPANY DID NOT EXIST BECAUSE IT HAS ALREADY MERGED WITH M/S. BHANDARI CONSULTANCY AND FINANCE LTD. NOTICE UNDER SECTION 153A WAS ISSUED ON 23 RD OCTOBER, 2013 AND ON THAT DATE ALSO THE ASSESSEE COMPANY DID NOT EXIST AS IT HAS ALREADY MERGED WITH THE ABOVE COMPANY. THE A.O. PAS SED THE ASSESSMENT ORDER UNDER SECTION 153A/143(3) ON 3 0 TH MARCH, 2015 IN THE NAME OF ASSESSEE-COMPANY WHICH WOULD NOT BE IN EXISTENCE AS PER LAW. THE ABOVE JUD GMENT OF THE HONBLE DELHI HIGH COURT CLEARLY SUPPORT THE 34 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT ASSESSEE CEASED TO EXIST ON THE APPOINTED DATE I.E. , 01.04.2009. THE DEPARTMENT CAME TO KNOW LATER ON AB OUT MERGER OF THE ASSESSEE-COMPANY WITH TRANSFEREE COMP ANY WHICH WOULD NOT MAKE ANY DIFFERENCE. EVEN ON THE DA TE OF SEARCH AND ISSUE OF NOTICE UNDER SECTION 153A AGAIN ST THE ASSESSEE, THE ASSESSEE-COMPANY DID NOT EXIST. THERE FORE, ISSUE OF NOTICE UNDER SECTION 153A ITSELF WAS VOID ABINITIO AND BAD IN LAW. THE HONBLE DELHI HIGH COURT IN THE CASE OF BDR BUILDERS & DEVELOPERS PVT. LTD., 397 ITR 529 HE LD THAT WHEN ASSESSEE COMPANY CEASES TO EXIST FROM APPOINTE D DATE, WAS NOT LIABLE FOR ASSESSMENT UNDER SECTION 1 53A OF THE I.T. ACT. THE ASSESSMENT UNDER SECTION 153A IS VOID ABINITIO. THE HONBLE DELHI HIGH COURT SIMILARLY IN THE CASE OF MARUTI SUZUKI LTD., 397 ITR 681 HELD THAT ASSESS MENT ORDER IN THE NAME OF AMALGAMATING COMPANY IS NOT A PROCEDURAL IRREGULARITY. ASSESSMENT ORDER IN THE NA ME OF NON-EXISTING AMALGAMATING COMPANY UNTENABLE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN 35 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. THE LIGHT OF JUDGMENT OF THE HONBLE DELHI HIGH COU RT DATED 19 TH JANUARY, 2011, WE ARE OF THE VIEW THAT ASSESSMENT FRAMED AGAINST THE ASSESSEE UNDER SECTION 143(3)/15 3A IS BAD IN LAW AND VOID ABINITIO. RESULTANTLY, WE SET A SIDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE ASSES SMENT ORDER. IN THE RESULT, GROUND NO.1 OF CROSS OBJECTIO N OF ASSESSEE IS ALLOWED. 8.2. LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF TH E ASSESSEE IN THE CASE OF THE SAME ASSESSEE. HE HAS SUBMITTED THA T THE DECISION OF HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF M/S. SKYLINE HOSPITALITY LLP (SUPRA) IS DISTINGU ISHABLE ON FACTS. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOT IN DISPUTE THAT THE A.O. RECORDED REASONS FOR REOPE NING OF THE ASSESSMENT AND ISSUED NOTICE UNDER SECTION 148 DATE D 29.03.2016 IN THE NAME OF M/S.SHL. IT IS ALSO NOT I N DISPUTE THAT M/S.SHL WAS AMALGAMATED WITH M/S. BCFL VIDE 36 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. JUDGMENT OF THE HONBLE JURISDICTIONAL DELHI HIGH C OURT DATED 19 TH JANUARY, 2011. PURSUANT TO SUCH AMALGAMATION, M/S. SHL CEASED TO EXIST. SUBSEQUENTLY, THIS COMPANY WAS ALS O RENAMED AS M/S. STLL. THE LD. CIT(A) VERIFIED FROM THE REC ORD AND FOUND THAT INTIMATION OF AMALGAMATION OF M/S.SHL WAS PROV IDED TO VARIOUS AUTHORITIES. COPIES OF SOME OF THE LETTERS ARE ALSO PLACED IN PAPER BOOK FILED BY LEARNED COUNSEL FOR THE ASSE SSEE. THE ASSESSEE, THEREFORE, INTIMATED TO THE REVENUE DEPAR TMENT ABOUT THE MERGER OF M/S.SHL WITH OTHER COMPANY PRIO R TO THE ISSUE OF NOTICE UNDER SECTION 148 OF THE I.T. ACT. THUS, THE ASSESSEE PROVED THAT INTIMATION WAS GIVEN TO THE RE VENUE DEPARTMENT ABOUT THE AMALGAMATION THROUGH DOCUMENTA RY EVIDENCES. THE LD. CIT(A) RELIED UPON DECISION OF T HE HONBLE JURISDICTIONAL DELHI HIGH COURT INCLUDING M/S. SPIC E ENTERTAINMENT (SUPRA) WHICH IS DIRECTLY ON THE POIN T IN ISSUE. SINCE ON THE DATE OF ISSUE OF NOTICE UNDER SECTION 148, M/S.SHL DID NOT EXIST, THEREFORE, RECORDING REASONS IN THEI R NAME OR ISSUE NOTICE UNDER SECTION 148 IS CLEARLY VOID ABINITIO , ILLEGAL AND INVALID. AN IDENTICAL ISSUE HAS ALSO BEEN CONSIDERE D IN THE CASE 37 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. OF THE SAME ASSESSEE FOR A.Y. 2008-2009 REFERRED TO ABOVE. THEREFORE, LEARNED COUNSEL FOR THE ASSESSEE RIGHTLY CONTENDED THAT THE ISSUE IS COVERED IN FAVOUR OF ASSESSEE BY ORDER OF THE TRIBUNAL. THE JUDGMENT OF THE HONBLE DELHI HIGH CO URT IN THE CASE OF M/S. SKYLINE HOSPITALITY LLP (SUPRA) IS DIS TINGUISHABLE ON FACTS. MOREOVER, IT IS WELL SETTLED LAW THAT IF TWO VIEWS ARE POSSIBLE, THEN THE VIEW IN FAVOUR OF THE ASSESSEE M AY BE ADOPTED. WE, THEREFORE, DID NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN ANNULLING THE RE-ASSESSMENT PROCE EDINGS. GROUND NO.1 OF DEPARTMENTAL APPEAL STANDS DISMISSED . THE LD. CIT(A) DID NOT DECIDE THE APPEAL ON MERITS BECAUSE RE- ASSESSMENT PROCEEDINGS HAVE BEEN ANNULLED. WE ALSO DO NOT PROPOSE TO DECIDE THE SAME ISSUE ON MERIT BECAUSE I T IS LEFT WITH ACADEMIC DISCUSSION ONLY. IN VIEW OF THE ABOVE DISC USSION, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. 10. THE ASSESSEE FILED THE CROSS OBJECTION IN SUPP ORT OF THE ORDER OF THE LD. CIT(A). SINCE, WE ARE UPHOLDIN G THE VIEW OF 38 ITA.NO.5065/D/2017 & CO.NO.14/D/2018 M/S. SINDHU TRADE LINKS LTD., NEW DELHI. THE LD. CIT(A) ON THE POINT IN ISSUE DISCUSSED HERE INABOVE, THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. 11. IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED AND CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (LP SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 25 TH MAY, 2018 VBP/- COPY TO 1. THE APPLICANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT A BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.