M/s Unison Industries LLC, New Delhi V. ADIT, New Delhi

ITA 636/DEL/2011

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1937 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-05-2017
• Assessment Year: 2001-2002
• Appeal Filed On: 03-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SACHIT JOLLY SHRI VASUDEVAN G
• Keywords: Scheme of amalgamation
• Section: 43

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D: NEW DELHI SHRI G.S. PANNU, HONBLE VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NOS. 636,637, 638, 639, 640/DEL/2011 & ITA NO. 648/DEL-2013 ASSTT. YEARS: 2001-02, 2003-04,2004-05,2005-06, 2006-07, 2002-03 O R D E R PER BENCH : ALL THESE SIX APPEALS INVOLVE IDENTICAL ISSUES AND, THEREFORE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. M/S. UNISON INDUSTRIES L.L.C AIFACS BUILDING, 1 RAFI MARG NEW DELHI 110 001 PAN AAACU9996L VS. ADIT CIRCLE 1(2), INTERNATIONAL TAXATION, ROOM NO. 410, DRUM SHAPED BUILDING, I.P. ESTATE, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI SACHIT JOLLY, SHRI VASUDEVAN G, ADVOCATE DEPARTMENT BY : SHRI C.P. SINGH, SR. DR DATE OF HEARING 20/11 /201 9 DATE OF PRONOUNCEMENT 26 /11/2019 ITA NOS.636,637,638,639,640/DEL-2011,648/DEL-2013 UNISON INDUSTRIES LLC VS ADIT 2 2. THE LD. AR SUBMITS THAT THESE APPEALS PERTAIN TO ASSESSMENT YEARS 2001-02 TO 2006-07 AND THE ONLY ISSUE FOR CONSIDERATION IS WHETHER AN ASSESSMENT CAN BE FRAMED ON A COMPANY WHICH HAS CEASED TO EXIST. IT HAS BEEN SUBMITTED THAT THE ASSESSMENTS IN ALL THESE APPEALS HAD BEEN FRAMED ON M/S. ELANO CORPORATION USA WHICH WAS NOT IN EXISTENCE AT THE TIME OF WHEN THE ASSESSMENTS WERE FRAMED. IT HAS ALSO BEEN SUBMITTED THAT THE ASSESSEE, VIDE LETTER DATED 31 ST JULY, 2008 AND, SUBSEQUENTLY, BY ANOTHER LETTER DATED 30 TH AUGUST, 2008 I.E. PRIOR TO THE DATE OF PASSING OF THE ASSESSMENT ORDERS HAD INFORMED THE ASSESSING OFFICER (AO) THAT M/S. ELANO CORPORATION USA HAD MERGED WITH THE ASSESSEE W.E.F. 16 TH JANUARY, 2004 AND HAS CEASED TO EXIST. IT HAS BEEN FURTHER SUBMITTED THAT DESPITE THE INFORMATION PROVIDED TO THE AO, THE AO PROCEEDED TO MAKE THE ASSESSMENT ON A NON EXISTING ENTITY. IT HAS BEEN FURTHER SUBMITTED THAT THE ISSUE IS DIRECTLY COVERED BY THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SPICE ENTERTAINMENT LTD. VS COMMISSIONER OF SERVICE TAX 2012 (280) ELT 43 (DELHI) WHEREIN IT HAS BEEN HELD BY THE HONBLE HIGH COURT THAT NO ASSESSMENT CAN BE FRAMED IN THE NAME OF A NON-EXISTING ENTITY. ITA NOS.636,637,638,639,640/DEL-2011,648/DEL-2013 UNISON INDUSTRIES LLC VS ADIT 3 3. THE LD. SR. DR HAS FAIRLY ACCEPTED THAT THIS HAS BEEN THE CASE IN THE ABOVE CAPTIONED APPEALS AND THAT THE JUDGMENT OF THE HONBLE DELHI HIGH COURT AS STATED ABOVE HAS A BINDING PRECEDENT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIAL ON RECORD AND WE AGREE WITH THE CONTENTION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE. IT IS UNDISPUTEDLY EVIDENT FROM THE RECORDS THAT M/S. ELANO CORPORATION USA HAD MERGED WITH THE ASSESSEE COMPANY M/S. UNISON INDUSTRIES LLC W.EF. 16 TH JANUARY, 2004 AND HAD THUS CEASED TO EXIST. IT IS ALSO UNDISPUTED THAT THE ASSESSEE VIDE TWO LETTERS DATED 31 ST JULY, 2008 AND 30 TH AUGUST 2008 HAD INFORMED THE AO OF SUCH MERGER. THE COPIES OF THESE LETTERS ARE ON RECORD. HOWEVER, THE AO STILL PROCEEDED TO FRAME THE IMPUGNED ASSESSMENTS ON THIS NON EXISTING ENTITY I.E M/S. ELANO CORPORATION USA. THEREFORE, IN VIEW OF THE JUDGMENT OF THE HONBLE DELHI HIGH COURT, WHICH IS THE JURISDICTIONAL HIGH COURT FOR THE ASSESSEE, IN THE CASE OF SPICE ENTERTAINMENT LTD. VS. COMMISSIONER OF SERVICE TAX (SUPRA) THE ASSESSMENTS FRAMED ON THE NON EXISTING ENTITY ARE A NULLITY IN LAW. THE HONBLE APEX COURT VIDE JUDGMENT DATED 25 TH JULY, 2019 IN THE CASE OF PR. CIT VS. MARUTI SUZUKI INDIA LIMITED IN CIVIL APPEAL NO. 5409 OF 2019 ITA NOS.636,637,638,639,640/DEL-2011,648/DEL-2013 UNISON INDUSTRIES LLC VS ADIT 4 HAS CONSIDERED AND APPROVED THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SPICE ENTERTAINMENT LTD. VS. COMMISSIONER OF SERVICE TAX . THE RELEVANT OBSERVATIONS OF THE HONBLE APEX COURT ARE CONTAINED IN PARAGRAPH 33 WHICH READS AS UNDER:- 33. IN THE PRESENT CASE, DESPITE THE FACT THAT THE ASSESSING OFFICER WAS INFORMED OF THE AMALGAMATING COMPANY HAVING CEASED TO EXIST AS A RESULT OF THE APPROVED SCHEME OF AMALGAMATION, THE JURISDICTIONAL NOTICE WAS ISSUED ONLY IN ITS NAME. THE BASIS ON WHICH JURISDICTION WAS INVOKED WAS FUNDAMENTALLY AT ODDS WITH THE LEGAL PRINCIPLE THAT THE AMALGAMATING ENTITY CEASES TO EXIST UPON THE APPROVED SCHEME OF AMALGAMATION. PARTICIPATION IN THE PROCEEDINGS BY THE APPELLANT IN THE CIRCUMSTANCES CANNOT OPERATE AS AN ESTOPPEL AGAINST LAW. THIS POSITION NOW HOLDS THE FIELD IN VIEW OF THE JUDGMENT OF A CO-ORDINATE BENCH OF TWO LEARNED JUDGES WHICH DISMISSED THE APPEAL OF THE REVENUE IN SPICE ENFOTAINMENT ON 2 NOVEMBER 2017. THE DECISION IN SPICE ENFOTAINMENT HAS BEEN FOLLOWED IN THE CASE OF THE RESPONDENT WHILE DISMISSING THE SPECIAL ITA NOS.636,637,638,639,640/DEL-2011,648/DEL-2013 UNISON INDUSTRIES LLC VS ADIT 5 LEAVE PETITION FOR AY 2011-2012. IN DOING SO, THIS COURT HAS RELIED ON THE DECISION IN SPICE ENFOTAINMENT. 5. THUS, IT HAS BEEN AFFIRMED BY THE HONBLE APEX COURT THAT ASSESSMENT FRAMED ON A NON-EXISTING ENTITY IS A NULLITY IN LAW. ACCORDINGLY, WE HAVE NO OPTION BUT TO QUASH THE ASSESSMENTS FRAMED FOR ALL THE SIX YEARS UNDER CONSIDERATION. 6. IN THE FINAL RESULT, ALL THE SIX APPEALS OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH NOVEMBER, 2019. SD/- SD/- (G.S. PANNU) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL MEMBER DATED: 26/11/2019 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI