DCIT - 9(3)(1), MUMBAI V. FIRST FUTURE AGRI AND DEVELOPERS LTD., MUMBAI

ITA 6033/MUM/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3231 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 10-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G PANSARI
• Assessee Lawyers: ABHISHEKH TILAK
• Keywords: Scheme of amalgamation
• Section: 148; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , ACCOUNTANT MEMBER ITA NO. 6033 / MUM . /2016 ( ASSESSMENT YEAR : 20 12 13 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 9(3)(1), MUMBAI . APPELLANT V/S FIRST FUTURE AGRI AND DEVELOPERS LTD. 1181 1182, SOLITAIRE CORPORATE PARK GURU HARGOVINDJI MARG, CHAKALA ANDHERI (W), MUMBAI 400 093 PAN AABCF2375F . RESPONDENT ASSESSEE BY : SHRI ARJIT CHAKRAVARTY A/W SHRI ABHISHEK TILAK REVENUE BY : SHRI D.G. PANSARI DATE OF HEARING 30 . 1 1 .201 8 DATE OF ORDER 27.02.2019 O R D E R PER SAKTIJIT DEY, J.M. AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 26 TH JULY 2016 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 16, MUMBAI, FOR THE ASSESSMENT YEAR 2012 13. 2 . THE ISSUE RAISED BY THE DEPARTMENT IN THE PRESENT APPEAL PRECISELY IS, WHETHER THE LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED 2 FIRST FUTURE AGRI AND DEVELOPERS LTD. IN HOLDING THE ASSESSMENT ORDER PASSED TO BE BAD IN LAW ON THE REASONING THAT IT WAS PASSED AGAINST A COMPANY NOT IN EXISTENCE? 3 . BRIEF FACTS ARE, THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPER. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 28 TH SEPTEMBER 2012, DECLARING TOTAL INCOME OF ` 5,73,16,071. DURING THE PENDENCY OF THE ASSESSMENT PROCEEDINGS FOR THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE AMALGAMATED / MERGED WITH UTV SOFTWARE COMMUNICATIONS LTD. W.E.F. 1 ST APRIL 2013, BY VIRTUE OF ORDER DATED 11 TH APRIL 2014, PASSED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN COMPANY PETITION NO.788 OF 2013 AND ORS., APPROVING THE SCHEME OF AMALGAMATION. THOUGH, THE AFORESAI D FACT RELATING TO AMALGAMATION/ MERGER OF THE ASSE SSEE WITH UTI SOFTWARE COMMUNICATION S LTD. WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, HOWEVER, HE PASSED THE IMPUGNED ASSESSMENT ORDER IN THE NAME OF THE ASSESSEE COMPANY ON 3 RD MARCH 2015. 4 . THE ASSESSEE CHALLENGED THE AFORESAID ASSESSMENT ORDER BEFORE THE FIRST APPELLATE AUTHORITY, INTER ALIA, ON THE GROUND THAT THE ASSESSMENT ORDER PASSED IN THE NAME OF A NON EXISTENT COMPANY IS INVALID. THE LEARNED COMMISSIONER (APPEALS) AFTER PROPER EXAMIN ATION OF FACTS AND MATERIALS BROUGHT ON RECORD FOUND THAT THOUGH ALL RELEVANT 3 FIRST FUTURE AGRI AND DEVELOPERS LTD. FACTS RELATING TO THE AMALGAMATION/ MERGER OF THE ASSESSEE WITH UTV SOFTWARE COMMUNICATIONS LTD. WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THROUGH SUPPORTING DOCUMENTARY EVIDENCES, HOWEVER, THE ASSESSING OFFICER STILL PROCEEDED TO PASS THE ASSESSMENT ORDER IN THE NAME OF THE ASSESSEE , DESPITE ITS MERGER WITH UTV SOFTWARE COMMUNICATIONS LTD. THUS, LEARNED COMMISSIONER (APPEALS) ULTIMATELY CONCLUDED THAT THE ASSESSING OFFICE R HAVING PASSED THE ASSESSMENT ORDER IN THE NAME OF A NON EXISTENT COMPANY, SUCH ORDER IS BAD IN LAW. BEING AGGRIEVED WITH THE AFORESAID DECISION OF THE FIRST APPELLATE AUTHORITY, THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL. 5 . THE LEARNED DEPARTMENTAL R EPRESENTATIVE SUBMITTED , SINCE, THE RETURN OF INCOME WAS FILED IN THE NAME OF THE PRESENT ASSESSEE, THE ASSESSING OFFICER WAS JUSTIFIED IN COMPLETING THE ASSESSMENT IN THE NAME OF THE ASSESSEE. HE SUBMITTED , IF AT ALL , THERE IS ANY MISTAKE COMMITTED BY THE ASSESSING OFFICER IN NOT MENTIONING THE NAME OF THE SUCCESSOR COMPANY IN THE ASSESSMENT ORDER, IT IS MERELY A TECHNICAL ERROR WHICH CAN BE IGNORED / RECTIFIED UNDER SECTION 292B OF THE ACT. HE SUBMITTED , SINCE , THERE IS NO PREJUDICE CAUSED TO THE ASSESSEE BY THE REASON OF NON MENTIONING OF THE SUCCESSOR COMPANYS NAME IN THE ASSESSMENT ORDER, LEARNED COMMISSIONER (APPEALS) WAS NOT JUSTIFIED IN DECLARING THE ASSESSMENT ORDER TO BE INVALID. IN SUPPORT OF THIS CONTENTION, THE LEARNED DEPARTMENTAL REPRESENTATI VE RELIED UPON THE 4 FIRST FUTURE AGRI AND DEVELOPERS LTD. DECISION OF THE HONBLE DELHI HIGH COURT IN SKYLIGHT HOSPITALITY LLP V/S ACIT, JUDGMENT DATED 2 ND FEBRUARY 2018, IN W.P. (C) NO.10870/2017, AND C.M. NO.44503/2017. HE SUBMITTED , THE AFORESAID DECISION OF THE HONBLE DELHI HIGH COURT WAS UPHELD BY THE HON'BLE SUPREME COURT WHILE DISMISSING THE SLP FLED BY THE SAID ASSESSEE. IN THIS CONTEXT, HE ALSO REFERRED TO THE ORDER OF THE HON'BLE SUPREME COURT IN SLP(C) NO. 7409/2018. 6 . THE LEARNED AUTHORISED REPRESENTATIVE STRONGLY RELYING UPON THE OB SERVATIONS OF LEARNED COMMISSIONER (APPEALS) SUBMITTED , AFTER AMALGAMATION OF THE ASSESSEE WITH UTI SOFTWARE COMMUNICATIONS LTD. W.E.F. 1 ST APRIL 2013, UPON APPROVAL OF THE SCHEME OF AMALGAMATION BY THE HON'BLE JURISDICTIONAL HIGH COURT IN ORDER DATED 11 TH APRIL 2014, THE ASSESSEE STOOD AMALGAMATED FROM THE APPOINTED DAY I.E., 1 ST APRIL 2013 . HE SUBMITTED, FROM THAT DATE THE ASSESSEE CEASED TO EXIST IN THE EYES OF LAW. HE SUBMITTED , IN RESPONSE TO THE STATUTORY NOTICES ISSUED UNDER SECTION 143(2) / 142(1) O F THE ACT, THE ASSESSEE HAS TIME AND AGAIN INTIMATED THE ASSESSING OFFICER REGARDING ITS AMALGAMATION WITH UTV SOFTWARE COMMUNICATIONS LTD. AND HAS ALSO FURNISHED ALL DOCUMENTARY EVIDENCES RELATING TO THE AMALGAMATION , INCLUDING , THE HONBLE HIGH COURTS O RDER. IN THIS CONTEXT, HE DREW OUR ATTENTION TO THE LETTER DATED 31 ST JULY 2014 , FILED BEFORE THE ASSESSING OFFICER IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. HE SUBMITTED , THE ASSESSEE , 5 FIRST FUTURE AGRI AND DEVELOPERS LTD. VIDE LETTER DATED 5 TH AUGUST 2014, HAS SURRENDERED ITS PAN CARD UPO N ITS MERGER WITH UTV SOFTWARE COMMUNICATIONS LTD. HE SUBMITTED , ON 2 ND MARCH 2015, UTV SOFTWARE COMMUNICATIONS LTD. ALSO BROUGHT THE FACTS RELATING TO THE AMALGAMATION OF THE ASSESSEE TO THE NOTICE OF THE ASSESSING OFFICER ALONG WITH DOCUMENTARY EVIDENCES . THUS, HE SUBMITTED , THE ASSESSING OFFICER WAS VERY MUCH AWARE OF THE FACTS RELATING TO AMALGAMATION OF THE ASSESSEE WITH UTV SOFTWARE COMMUNICATIONS LTD. HOWEVER, IN SPITE OF THAT THE ASSESSING OFFICER PROCEEDED TO PASS THE IMPUGNED ASSESSMENT ORDER ON 3 RD MARCH 2015, IN THE NAME OF THE ASSESSEE. HE SUBMITTED , THE ASSESSEE HAS ALSO COMPLIED TO ALL THE CONDITIONS IMPOSED BY THE HON'BLE JURISDICTIONAL HIGH COURT BY INTIMATING THE REGISTRAR OF COMPANIES (ROC) IN THE PRESCRIBED MANNER. IN THIS CONTEXT, HE DRE W OUR ATTENTION TO THE FORM NO.INC 28 FILED BEFORE THE ROC. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , SINCE THE ERROR COMMITTED BY THE ASSESSING OFFICER IS A JURISDICTIONAL ERROR, IT WILL NOT BE COVERED UNDER SECTION 292B OF THE ACT. THEREFORE, LEAR NED COMMISSIONER (APPEALS) WAS JUSTIFIED IN HOLDING THE ASSESSMENT ORDER TO BE BAD IN LAW. IN SUPPORT OF HIS CONTENTION, THE LEARNED AUTHORISED REPRESENTATIVE RELIED UPON THE FOLLOWING DECISIONS: I ) SPICE INFOTAINMENT LTD., V/S CIT, [2012] 247 CTR 500 (DEL. ); 6 FIRST FUTURE AGRI AND DEVELOPERS LTD. II ) CIT V/S SPICE INFOTAINMENT LTD., ITA NO.285 ITR 2014, DATED 02.11.2017; III ) ACIT V/S NEHA ENTERPRISES, ITA NO.3666/MUM./2015, ETC., DATED 20.12.2017; IV ) MAHARASHTRA ELEKTROSMELT LTD. V/S DCIT, ITA NO.7601/MUM./2013, DATED 16.06.2017; V ) WESTLIFE DEVELOPMENT LTD. V/S PCIT, [2017] 88 TAXMANN.COM 439 (MUM.) (TRIB.); AND VI ) INSTANT HOLDINGS LTD. V/S ACIT, ITA NO.4593/MUM./2011, DATED 09.03.2916. 7 . AS REGARDS THE DECISION OF THE HONBLE DELHI HIGH COURT IN SKYLIGHT HOSPITALITY LLP (SUPRA) CITED BY THE LEARNED DEPART MENTAL REPRESENTATIVE , THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE DECISION IS F ACTUALLY DISTINGUISHABLE, HENCE, WILL NOT APPLY TO THE PRESENT CASE. IN THIS CONTEXT, HE RELIED UPON THE FOLLOWING DECISIONS: I ) SHRI ISHWARBHAI MAGANBHAI DESAI V/S ITO , ITA NO.90/AHD./2017, DATED 23.04.2018; II ) AKZO NOBEL INDIA LTD. V/S DCIT, IT NO.387/PUN./2016, DATED 05.06.2018; AND III ) GE NPA C T INFRASTRUCTURE (KOLKATA) PVT. LTD. V/S DCIT, IT NO.198/DEL./2015, DATED 27.04.2018. 8 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. UNCONTROVERTED FACTS, AS SET OUT IN THE IMPUGNED ORDER OF THE LEARNED COMMISSIONER (APPEALS) AND ALSO EMANATING FROM RECORD REVEALS THAT THE ASSESSEE FILED A PETITION BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT FOR ITS AMALGAMA TION WIT H UTV SOFTWARE 7 FIRST FUTURE AGRI AND DEVELOPERS LTD. COMMUNICATIONS LTD. THE HON'BLE JURISDICTIONAL HIGH COURT, VIDE ORDER DATED 11 TH APRIL 2014, APPROVED THE SCHEME OF AMALGAMATION AND THE ASSESSEE STOOD AMALGAMATED WITH UTV SOFTWARE COMMUNICATIONS LTD. FROM THE APPOINTED DAY OF 1 ST APRIL 2013. IT IS EVIDENT , ALL RELEVANT FACTS RELATING TO THE AMALGAMATION OF THE ASSESSEE WITH UTV SOFTWARE COMMUNICATIONS LTD. WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER IN THE COURSE OF THE ASSESSMENT PROCEEDINGS FOR THE IMPUGNED ASSESSMENT YEA R. IN FACT, NOT ONLY THE ASSESSEE FURNISHED BEFORE THE ASSESSING OFFICER THE ORDER OF AMALGAMATION PASSED THE HON'BLE JURISDICTIONAL HIGH COURT BUT ALL OTHER DOCUMENTARY EVIDENCES RELATING TO ITS AMALGAMATION WITH UTV SOFTWARE COMMUNICATIONS LTD. IN FACT, VIDE LETTER DATED 5 TH AUGUST 2014, FILED BEFORE THE ASSESSING OFFICER THE ASSESSEE SURRENDERED ITS PAN CARD CONSEQUENT UPON ITS AMALGAMATION / MERGER WITH UTV SOFTWARE COMMUNICATIONS LTD. EVEN , THE SUCCESSOR COMPANY , UTV SOFTWARE COMMUNICATIONS LTD. , ALSO FILED DOCUMENTARY EVIDENCES BEFORE THE ASSESSING OFFICER INTIMATING THE FACT S RELATING TO MERGER OF THE ASSESSEE. IN SPITE OF ALL THE EVIDENCES AVAILABLE BEFORE HIM, THE ASSESSING OFFICER STILL PROCEEDED TO COMPLETE THE ASSESSMENT IN THE NAME OF THE ASSESS EE ON BY AN ORDER PASSED ON 3 RD MARCH 2015, BY WHICH TIME THE ASSESSEE HAS CEASED TO E XIST. IT IS RELEVANT TO OBSERVE, IN COMPLIANCE TO THE DIRECTIONS OF THE HON'BLE JURISDICTIONAL HIGH COURT THE ASSESSEE HAD FILED FORM NO.INC 28, BEFORE THE ROC 8 FIRST FUTURE AGRI AND DEVELOPERS LTD. COMMUNICAT ING THE ORDER OF AMALGAMATION PASSED BY THE HON'BLE JURISDICTIONAL HIGH COURT AND ALSO INTIMATING ABOUT ITS MERGER WITH UTV SOFTWARE COMMUNICATIONS LTD . IN FACT, A SCREEN SHO T OF THE COMPANY MASTER DATA AVAILABLE IN THE RECORD OF ROC, A COPY OF WHICH IS AT PAGE 44 OF THE PAPER BOOK, CLEARLY REVEALS THAT THE STATUS OF THE COMPANY HAS BEEN NOTIFIED AS AMALGAMATED . THE AFORESAI D FACTS CLEARLY DEMONSTRATE, NOT ONLY THE FACT THAT THE ASSESSEE INTIMATED ALL RELEVANT FACTS RELATING TO ITS AMALGAMATION WITH UTV SOFTWARE COMMUNICATIONS LTD. TO THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE IMPUGNED ASSESSMENT YEAR , BUT ALSO FURNISHED ALL NECESSARY EVIDENCES IN SUPPORT OF ITS CLAIM. THUS, BY THE TIME THE ASSESSING OFFICER PASSED THE IMPUGNED ASSESSMEN T ORDER , THE ASSESSEE COMPANY HAS CEASED TO EXIST IN THE EYES OF LAW. THEREFORE, IT IS APPARENT , THE ASSESSING OFFICER HAS PASSED THE IMPUGNED ASSESSMENT ORDER AGAINST A NON EXISTENT COMPANY. THEREFORE, THE ISSUE WHICH REQUIRES TO BE EXAMINED IS, WHETHER T HE ASSESSMENT ORDER PASSED IN THE NAME OF A NON EXISTENT COMPANY IS VALID? LEGAL POSITION IN THIS REGARD IS FAIRLY WELL SETTLED. THE HONBLE DELHI HIGH COURT IN SPICE INFOTAINMENT LTD. V/S CIT, [2012] 247 CTR (DEL.) 500 (DEL.) HAS HELD THAT ASSESSMENT ORDE R PASSED IN THE NAME OF THE ERSTWHILE COMPANY AFTER ITS AMALGAMATION / MERGER BY VIRTUE OF AN ORDER OF AMALGAMATION PASSED BY THE HIGH COURT IS INVALID. THE AFORESAID DECISION OF THE HONBLE DELHI 9 FIRST FUTURE AGRI AND DEVELOPERS LTD. HIGH COURT WAS UPHELD BY THE HON'BLE SUPREME COURT WHILE DI SMISSING THE SLP OF THE DEPARTMENT IN CIVIL APPEAL NO.285/ 2014, DATED 2 ND NOVEMBER 2014. THE OTHER DECISIONS CITED BY THE LEARNED AUTHORISED REPRESENTATIVE ALSO EXPRESS IDENTICAL VIEW. AS REGARDS THE DECISION RENDERED BY THE HONBLE DELHI HIGH COURT IN SK YLIGHT HOSPITALITY LLP (SUPRA), THE FACTS ARE COMPLETELY DIFFERENT. IN CASE OF SKYLIGHT HOSPITALITY LLP (SUPRA), THE ASSESSEE HAD CHALLENGED THE NOTICE OF RE OPENING ISSUED UNDER SECTION 148 OF THE ACT , WHEREIN , THE NAME OF THE ERSTWHILE COMPANY WAS MENTIO NED. THE HONBLE HIGH COURT HELD THAT SINCE THE ASSESSMENT PROCEEDINGS HAD NOT COMPLETED, THE MISTAKE / ERROR IN THE NOTICE CAN NOT INVALIDATE THE PROCEEDING IN VIEW OF SEC TION 292B OF THE ACT. HOWEVER, THE FACTS ARE DIFFERENT IN THE PRESENT APPEAL, AS THE ASSESSING OFFICER HAS COMPLETED THE ASS ESSMENT IN THE NAME OF A COMPANY WHICH HAS MERGED AND IS NOT IN EXISTENCE ON THE DATE THE ASSESSMENT ORDER WAS PASSED. THAT TOO, EVEN AFTER THE ASSESSING OFFICER WAS PROVIDED WITH ALL DOCUMENTARY EVIDENCES DURING T HE ASSESSMENT PROCEEDINGS TO DEMONSTRATE THAT THE COMPANY HAS BEEN AMALGAMATED WITH UTV SOFTWARE COMMUNICATIONS LTD. THAT BEING THE CASE, NEITHER THE AFORESAID DECISION OF THE HONBLE DELHI HIGH COURT NOR THE PROVISIONS CONTAINED UNDER SECTION 292B OF THE ACT WOULD COME TO THE RESCUE OF THE DEPARTMENT. IN FACT, DIFFE RENT BENCHES OF THE TRIBUNAL HAVE EXPRESSED THE AFORESAID VIEW AFTER DISTINGUISHING THE 10 FIRST FUTURE AGRI AND DEVELOPERS LTD. FACTUAL POSITION IN CASE OF SKYLIGHT HOSPITALITY LLP (SUPRA). IN THIS CONTEXT, WE MAY REFER TO THE FOLLOWING DECISIONS: I ) SHRI ISHWARBHAI MAGANBHAI DESAI V/S ITO, ITA NO.90/AHD./2017, DATED 23.04.2018; II ) AKZO NOBEL INDIA LTD. V/S DCIT, IT NO.387/PUN./2016, DATED 05.06.2018; AND III ) GANPAT INFRASTRUCTURE (KOLKATA) PVT. LTD. V/S DCIT, IT NO.198/DEL./2015, DATED 27.04.2018. 9 . THEREFORE, CONSIDERING THE FACTUAL MATRIX RELATING TO THE DISPUTED ISSUE IN THE LIGHT OF RATIO LAID DOWN IN THE JUDICIAL PRECEDENTS CITED BEFORE US, WE UPHOLD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS). GROUNDS RAISED ARE DISMISSED. 10 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.02 .2019 SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 27.02.2019 11 FIRST FUTURE AGRI AND DEVELOPERS LTD. COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI