M/s. Intas Lifesciences, Ahmedabad V. The ACIT, Circle-5(2), Ahmedabad

ITA 677/AHD/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0994 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 18-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Transfer pricing; Procedural lapse; Scheme of amalgamation; Set aside
• Section: 271(1)(c); 143(3); 142(1); 10B; 143(1); 195; 251; 80IC; 143(2); 80IC; 13; 92CA; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ I.T.A. NOS. 677 & 678/AHD/2019 ( / ASSESSMENT YEARS : 2013-14 & 2014-15 ) INTAS LIFESCIENCES ERSTWHILE KNOWN AS INTAS PHARMACEUTICALS SINCE MERGED WITH INTAS PHARMACEUTICALS LTD., INTAS CORPORATE HOUSE, NR. SOLA BRIDGE, S. G. HIGHWAY, THALTEJ, AHMEDABAD - 380054 / VS. ACIT CIRCLE-5(2) AHMEDABAD 380015 1 ST FLOOR, NARAYAN CHAMBERS, ASHRAM ROAD, AHMEDABAD ./ ./ PAN/GIR NO. : AACFI0241H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. N. SO PARKAR , A.R . / RESPONDENT BY : SHRI O. P. SHARMA , CIT . D.R. / DATE OF HEARING 12/03/2020 !'# / DATE OF PRONOUNCEMENT 04/06/2020 $% /O R D E R PER WASEEM AHMED - AM: BOTH CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTA NCE OF THE ASSESSEE AGAINST THE COMMON ORDER OF THE COMMISSION ER OF INCOME ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 2 - TAX (APPEALS)-5, AHMEDABAD (CIT(A) IN SHORT) DATED 25/03/2019 RELEVANT TO ASSESSMENT YEARS (AY) 2013-14 & 2014-15 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. GROUNDS PERTAINING TO TRANSFER PRICING ADJUSTME NTS. THE LD. CIT(A) HAVE ERRED ON THE FACTS, IN CIRCUMST ANCES OF THE CASE AND IN LAW IN CONFIRMING AN UPWARD TRANSFER PRICING ADJUSTMENT AS UNDER: TRANSFER PRICING ADJUSTMENT ON SPECIFIED DOMESTIC T RANSACTIONS OF SALE OF FINISHED GOODS UNDERTAKEN WITH THE AE - RS 192,8 4,97,000/- A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN NOT APPRECIATING THAT IN THE FACTS OF PRESENT CASE BOTH APPELLANT AND INTAS PHARMACEUTICALS LIMITED (HEREIN AFTER REFERRED 'IPL ') WERE PAYING AMT/MAT AND THEREFORE IN ABSENCE OF TAX ARBITRAGE, THE PROV ISIONS OF SPECIFIED DOMESTIC TRANSACTIONS WOULD NOT APPLY TO TRANSACTION OF PURC HASE OF FINISHED GOODS FROM THE IP FIRM. B) ASSUMING BUT NOT ACCEPTING AND WITHOUT PREJU DICE TO GROUND NO. 1 (A), IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT IPL, WHICH FULFILS THE CONDIT IONS OF SELECTION OF THE TESTED PARTY AS LAID DOWN UNDER RULE 10B OF THE INCOME TAX RULES AND WHOSE DATA REGARDING THE COMPARABLE COMPANIES AND THE COMPARAB LE UNCONTROLLED TRANSACTIONS WERE MORE RELIABLY AVAILABLE SHOULD BE CONSIDERED AS A TESTED PARTY C) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE AO/TPO HAS FAILED TO FIND OUT APPROPRIATE COMPARABLE FOR IP FIRM AND BENCHMARKED THE IP FIRM WITH ENTITIES WHOSE FUNCTIONS, ASSETS AND RISK ('FAR') ANALYSIS A ND BUSINESS PROFILE WAS MORE AKIN TO THE APPELLANT COMPANY AND WHICH WERE U SED BY THE APPELLANT COMPANY AS COMPARABLE ENTITY IN ITS TP DOCUMENTATIO N. D) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) WHOLLY ERRED IN INCORRECTLY OBSERVING THAT 'IT IS NOTED AFTER FE W YEARS, THE APPELLANT MERGED INTO THE FLAGSHIP CONCERN, WHICH SHOWS THE INTENTIO N OF THE APPELLANT. AS, THE APPELLANT FAILED TO TAKE BENEFIT OUT OF THE SAID SC HEME OF ARRANGEMENT OF CLAIMING DEDUCTION IN ONE UNIT AND TAKING BENEFI T IN BOTH UNITS WERE DETECTED BY THE REVENUE, THE APPELLANT SUBSEQU ENTLY MERGED TWO ENTITIES INTO ONE CONCERN.) E) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) WHILE GIVING INCORRECT OBSERVATION AS STATED IN GRO UND NO. 1 (D) FAILED TO APPRECIATE THAT THE APPELLANT MERGED WITH EFFECT FR OM 1ST APRIL 2014 INTO INTAS PHARMACEUTICALS LIMITED/IPL AS PER SCHEME OF AMALGA MATION SANCTION BY ORDER PASSED BY HON'BLE GUJARAT HIGH COURT ON 1ST OCTOBER 2015, WHEREAS THE FIRST ORDER PROPOSING TRANSFER PRICING ADJUSTMENT WAS PAS SED BY TPO ON 31ST OCTOBER 2016. FURTHER, THE DEDUCTION/TAX HOLIDAY UN DER SECTION 8QIC/80IE QUA UNDERTAKING AND NOT QUA ASSESSEE AND THEREFORE POST AMALGAMATION OF APPELLANT INTO IPL, THE IPL CONTINUED TO ENJOY THE TAX HOLIDAY AND THE TAX DEPARTMENT ALSO ALLOWED BENEFIT OF THE SAME IN HAND S OF IPL WHILE PASSING ASSESSMENT ORDER FOR AY 2015-16. ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 3 - F) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) FURTHER ERRED IN IGNORING THE FACT THAT UNDER SECON DARY ANALYSIS, THE APPELLANT AND IPL HAS SUBSTANTIATED THE ALP UNDER INTERNAL RE SALE PRICE METHOD BY BENCHMARKING GROSS MARGIN EARNED IPL IN RESELLING T HE PRODUCTS BOUGHT FROM IP FIRM VIS A VIS THE GROSS MARGIN EARNED BY IT IN RES ELLING THE PRODUCTS BOUGHT FROM THIRD PARTIES. 2. GROUNDS PERTAINING TO CORPORATE TAX ADJUSTMENT CONS EQUENT TO UPWARD TRANSFER PRICING ADJUSTMENT AS PER GROUND 1. A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE VIEW OF THE AO ERRED THAT DUE TO CLO SE CONNECTION, THE APPELLANT EARNED MORE THAN ORDINARY PROFIT OF RS.182,95,73,26 1/- AND CONSEQUENTLY MAKING UPWARD ADJUSTMENT OF RS.176,44,41,970/- TO T HE TOTAL INCOME BY RE- COMPUTING THE DEDUCTIONS UNDER SECTION 80IC AND 80I E OF THE ACT. 3. BOTH THE LOWER AUTHORITIES HAVE PASSED THE ORDER S WITHOUT PROPERLY APPRECIATING THE FACTS AND THEY FURTHER ERRED IN GROSSLY IGNORIN G VARIOUS SUBMISSIONS, EXPLANATIONS AND INFORMATION SUBMITTED BY THE APPEL LANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEEN CONSIDERED BEFORE PASSING THE IMPUGNED ORDER. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ACTION OF THE LD. AO IN INITIAT ING PENALTY U/S. 271(1)(C) OF THE ACT. 3. THE ASSESSEE HAS RAISED THE FOLLOWING ADDITIONAL GROUND OF APPEAL VIDE LETTER DATED NIL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE ORDER PASSED BY THE ASSESSING OFFICER U/S.143(3) R.W.S. 92CA(4) OF THE I.T. ACT DATED 6.2.2017 IS BAD IN LAW AND AB INITIO VOID FOR THE REASON THAT T HE ASSESSMENT ORDER HAS BEEN PASSED IN THE NAME OF THE ERSTWHILE PARTNERSHIP FIR M M/S. INTAS PHARMACEUTICALS WHERE AS ON THE DATE OF THE ASSESSM ENT THE SAID PARTNERSHIP FIRM HAD ALREADY MERGED WITH INTAS PHARMACEUTICALS LTD. WHICH IS A COMPANY INCORPORATED UNDER THE RELEVANT PROVISIONS OF THE C OMPANIES ACT. 2. FOLLOWING FROM THE PRECEDING GROUND NO.1 T HE IMPUGNED ASSESSMENT ORDER DATED 6.2.2017 DESERVES TO BE QUASHED AND VACATED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER DATED 25.3.2019 PASSED BY THE LEARNED CIT(A) IS BAD IN LAW AND VOID AB INITIO FOR THE REASON THAT THE SAID ORDER HAS BEEN PASSED IN THE NAME OF M/S. INTAS LIFESCIENCES (PREVIOUSLY KNOWN AS INTAS PHARMACEUTICALS), WHEREA S THE SAID FIRM WAS NOT IN EXISTENCE AT THE TIME OF PASSING OF THE APPELLATE O RDER AND IT HAD ALREADY MERGED WITH INTAS PHARMACEUTICALS LTD. WHICH IS A C OMPANY INCORPORATED UNDER THE RELEVANT PROVISIONS OF THE COMPANIES ACT. 4. FOLLOWING FROM THE PRECEDING GROUND NO.3, THE IMPUGNED APPELLATE ORDER ALSO REQUIRES TO BE QUASHED AND VACATED. ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 4 - 4. FIRST, WE TAKE UP THE ADDITIONAL GROUND OF APPEA L RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF THE ASSESSMENT ON THE R EASONING THAT IT WAS FRAMED IN THE NAME OF NON-EXISTENT COMPANY. 5. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PR IVATE LIMITED COMPANY AND THE ASSESSEE WAS ERSTWHILE PARTNERSHIP FIRM NAMELY INTAS PHARMACEUTICALS. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF PHARMACEUTICALS PRODUCTS. THE ASSESSEE WAS ELIGIBLE TO CLAIM THE DE DUCTION UNDER SECTION 80IC AND 80IE OF THE ACT. THE ASSESSEE, HOWEVER, IN THE YEAR UNDER CONSIDERATION WAS SUBJECT TO SCRUTINY ASSESSMENT INVOLVING THE IS SUE OF THE DETERMINATION OF THE ARMS LENGTH PRICE IN RELATION TO TRANSACTIONS COVERED UNDER SPECIFIED DOMESTIC TRANSACTION. THE ASSESSEE IN THE MEANTIME GOT AMALGAMATED WITH INTAS PHARMACEUTICALS LIMITED WHICH WAS INTIMATED T O THE TPO VIDE LETTER DATED 30-10-2015 BY THE ASSESSEE. HOWEVER THE AO FRAMED T HE ASSESSMENT ORDER DATED 06-02-2017 UNDER SECTION 143(3) READ WITH SEC TION 92CA (3) OF THE ACT IN THE NAME OF THE FIRM NAMELY M/S INTAS PHARMACEUTICA LS WHICH WAS A NON- EXISTENT ENTITY AT THAT POINT OF TIME. THE AO FRAME D THE ASSESSMENT ORDER UNDER SECTION 143(3) READ WITH SECTION 92CA(3) OF THE ACT BY MAKING ADDITION TO THE TOTAL INCOME AMOUNTING TO RS. 176,44,41,970/- ONLY. 6. THE LD. AR BEFORE US HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT ORDER FRAMED BY THE AO UNDER SECTION 143(3) READ WITH SEC TION 92CA(3) OF THE ACT DATED 06-02-2017 ON THE REASONING THAT IT WAS FRAME D ON ERSTWHILE PARTNERSHIP FIRM WHICH WAS A NON-EXISTENT ENTITY AT THAT POINT OF TIME. THE SUBMISSION OF THE ASSESSEE STANDS AS UNDER: 1. APPEALS AGAINST THE ORDERS OF THE LEARNED CIT(A ) FOR THE ASSESSMENT YEARS 2013-14 AND 2014-15 HAVE BEEN FILED BEFORE THIS HON 'BLE TRIBUNAL WHICH ARE PENDING AS OF NOW BEING ITA NO. 677/AHD/2019 FOR TH E ASSESSMENT YEAR 2013- 14 AND ITA NO. 678/AHD/2019 FOR THE ASSESSMENT YEAR 2014-15. SUBSEQUENT TO THE FILING OF THE AFORESAID APPEALS THE APPELLANT H AS BEEN ADVISED THAT AN IMPORTANT LEGAL ISSUE WAS LEFT OUT INADVERTENTLY FR OM THE GROUNDS OF APPEAL ORIGINALLY RAISED BEFORE THIS HON'BLE TRIBUNAL. THI S ISSUE IS A PURELY LEGAL ISSUE AND, THEREFORE, ADDITIONAL GROUNDS OF APPEAL ARE BE ING NOW FILED BEFORE THIS HON'BLE TRIBUNAL WITH A PRAYER THAT THE SAME MAY KI NDLY BE ADMITTED AND DECIDED ON MERITS. AS PER THE ADDITIONAL GROUNDS OF APPEAL IT HAS BEEN SUBMITTED THAT THE IMPUGNED ASSESSMENT ORDERS AS WE LL AS THE APPELLATE ORDERS ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 5 - HAVE BEEN PASSED IN THE NAME OF THE ERSTWHILE PARTN ERSHIP FIRM WHICH NO MORE EXISTED ON THE RELEVANT DATES OF PASSING OF THE REL EVANT ORDERS WHICH MEANS THAT THE SAID ORDERS HAVE BEEN PASSED IN THE NAMES OF NON-EXISTING ENTITIES. IT IS SUBMITTED THAT FOR THIS REASON THE ORDERS ARE NU LLITY IN THE EYES OF LAW AND, THEREFORE, THESE ORDERS DESERVE TO BE QUASHED BEING BAD IN LAW. 2. THE RELEVANT FACTS BRIEFLY STATED ARE AS UNDER:- (I) INTAS PHARMACEUTICAL (HEREIN AFTER REFERRED AS 'IP FIRM'] WAS IN EXISTENCE IN THE FORM OF A PARTNERSHIP FIRM, DATED 1ST DECEMBER 2005, UNDER THE PROVISIONS OF THE INDIAN PARTNERSHIP ACT, 1932. (II) NAME OF 'INTAS LIFESCIENCES' WITH EFFECT FROM 28TH FEBRUARY 2015. (III) INTAS LIFESCIENCES, THE SAID PARTNERSHIP FI RM HAS BEEN CONVERTED INTO A PRIVATE LIMITED COMPANY, IN THE NAME OF INTAS LIFES CIENCES PRIVATE LIMITED [HEREIN AFTER REFERRED AS 'ILPL'), WITH EFF ECT FROM 7TH MAY 2015, IN COMPLIANCE WITH THE PROVISIONS OF CHAPTER XXI OF THE COMPANIES ACT, 2013. (IV) THE BOARD OF DIRECTORS OF ILPL AND INTAS PHAR MACEUTICALS LIMITED (HEREIN AFTER REFERRED AS 'IPL'J IN THEIR MEETING H ELD ON 12.3.2015 GRANTED IN PRINCIPLE APPROVAL FOR AMALGAMATION OF I LPL WITH IPL. (V) THE SCHEME OF AMALGAMATION WAS APPROVED BY TH E BOARD OF DIRECTORS IN THEIR MEETING HELD ON 9.7.2015 WITH APPOINTED DA TE BEING 1.4.2014. (VI) THEN AFTER THE SAID SCHEME OF AMALGAMATION W AS FILED WITH HON'BLE GUJARAT HIGH COURT. (VII) THE HON'BLE HIGH COURT ON ADMITTING THE PETI TION OF ILPL AND IPL SEEKING SANCTIONING OF SCHEME OF AMALGAMATION, DIRE CTED ISSUANCE OF NOTICE/SERVING NOTICE OF HEARING TO CENTRAL GOVERNM ENT I.E. REGIONAL DIRECTOR TO WHOM POWER OF CENTRAL GOVERNMENT ARE DE LEGATED AND OFFICIAL LIQUIDATOR. IN TERMS OF GENERAL CIRCULAR N O.L OF 2014 DATED 15TH JANUARY 2014 ISSUED BY MINISTRY OF CORPORATE AFFAIR S, GOVERNMENT OF INDIA, INVITED VIEWS/OBJECTION/SPECIFIC COMMENTS FR OM THE INCOME TAX DEPARTMENT ON THE PROPOSED SCHEME OF AMALGAMATION V IDE HIS LETTER DATED 14TH AUGUST 2015. (VIII) THE HON'BLE GUJARAT HIGH COURT SANCTIONED TH E SCHEME OF AMALGAMATION OF ILPL WITH IPL, VIDE ITS ORDER DATED 28TH SEPTEMBER 2015, AFTER TAKING INTO ACCOUNT THE CLEARANCE/NO OB JECTION GIVEN BY THE REGIONAL DIRECTOR AND THE OFFICIAL LIQUIDATOR. (IX) VIDE LETTER DATED OCTOBER 30, 2015, IT WAS INTIMATED TO THE DEPARTMENT THAT NAME OF M/S INTAS PHARMACEUTICALS [THE ASSESSE E / PARTNERSHIP FIRM) WAS CHANGED TO M/S INTAS LIFESCIENCES, WHICH WAS THEN CONVERTED INTO PRIVATE LIMITED COMPANY AS PER THE PROVISIONS OF COMPANIES ACT, 2013 AS M/S INTAS LIFESCIENCES PRIVATE LIMITED. LAT ER ON THE AS PER THE SCHEME OF AMALGAMATION APPROVED BY THE HON'BLE GUJA RAT HIGH COURT, M/S INTAS LIFESCIENCES PRIVATE LIMITED MERGED / AMA LGAMATED WITH M/S INTAS PHARMACEUTICALS LIMITED. AS PER THE SCHEME AP PROVED/SANCTIONED BY THE HON'BLE GUJARAT HIGHT COURT, THE APPOINTED D ATE WAS 1ST APRIL 2014. IN VIEW OF ABOVE, THE INCOME OF M/S INTAS LIF ESCIENCES PRIVATE LIMITED WAS MERGED WITH THE INCOME OF M/S INTAS PHA RMACEUTICALS LIMITED W.E.F. 1ST APRIL 2014. ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 6 - 3. IT MAY BE MENTIONED THAT THE HON'BLE HIGH CO URT OF GUJARAT DISPOSED OFF THE RELEVANT PETITION NO. 267 OF 2015 AND THE APPLICATI ON NO.237 OF 2015 WITH COMPANY PETITION NO. 268 OF 2015 AND APPLICATION NO . 238 OF 2015 VIDE JUDGEMENT DATED 28TH SEPTEMBER, 2015 AND THE RELEVA NT OBSERVATIONS OF THE HON'BLE HIGH COURT ARE REPRODUCED BELOW FOR READY R EFERENCE FROM PARA-11 OF THE JUDGEMENT:- '11. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF THE SCHEME AND THE PROCEEDINGS, IT APPEA RS THAT THE REQUIREMENTS OF THE PROVISIONS OF SECTIONS 391 TO 3 94 OF THE COMPANIES ACT, 1956 ARE SATISFIED. THE SCHEME IS GENUINE AND BONA FIDE AND IN THE INTEREST OF THE SHAREHOLDERS AND CREDITORS. I, THEREFORE, ACCORDINGLY ALLOW THE COMPANY PETITIONS AND APPROVE THE SCHEME. THE SCHEME IS HEREBY SANCTIONED. PRAYERS MADE IN THE RESPECTIVE C OMPANY PETITIONS ARE HEREBY GRANTED.' 4. FROM THE ABOVE, IT MAY KINDLY BE APPRECIATED THAT FROM THE DATE OF THE HIGH COURT'S ORDER VIZ. 28TH SEPTEMBER, 2015 THE EARLIER ENTITY WHICH WAS A PARTNERSHIP FIRM GOT MERGED WITH A LIMITED COMPANY AND, THEREFORE, IT IS A LEGAL REQUIREMENT THAT ANY ORDER PASSED UNDER ANY OF THE STATUTORY PROVISIONS OF THE INCOME-TAX ACT MUST BE PASSED IN THE NAME OF THE NE W ENTITY AND IF ANY SUCH ORDER IS PASSED IN THE NAME OF THE NON-EXISTENT ENT ITY SUCH ORDER HAS TO BE TREATED AS ILLEGAL AND AB INITIO VOID. THE APPELLAN T STRONGLY RELIES ON THE RECENT JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF PCIT VS. MARUTI SUZUKI INDIA LTD. [2019] 107 TAXMANN.COM 375 (SC) / [2019] 416 ITR 613 (SC). FOR READY REFERENCE, THE FACTS AND THE RATIO OF THE AFO RESAID APEX COURT JUDGEMENT ARE REPRODUCED BELOW FROM THE HEADNOTE:- 'FACTS THE ASSESSEE SPIL WAS A JOINT VENTURE BETWEEN SMC A ND MSIL. IT FILED ITS RETURN DECLARING CERTAIN TAXABLE INCOME. THE RETURN WAS PROCESSED UNDER SECTION 143(1) AND THEN PICKED UP FOR SCRUTINY. NOT ICES UNDER SECTION 143(2) WERE ISSUED. SUBSEQUENTLY, THE HIGH COURT PASSED AN ORDER APPROV ING THE SCHEME OF AMALGAMATION BY WHICH SPIL (AMALGAMATING COMPANY) W AS AMALGAMATED WITH 'MSIL' (AMALGAMATED COMPANY) WITH EFFECT FROM 1-4-2012. THEREAFTER, ASSESSMENT PROCEEDINGS CONTINUED WITH T HE PARTICIPATION OF MSIL REPRESENTING SPIL IN THE ASSESSMENT PROCEEDING S. THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER UNDER SECTION 1 43(3), READ WITH SECTION 144C(1) IN THE NAME OF SPIL. THE ASSESSEE FILED APPEAL WHERE ONE OF THE GROUNDS URGED WAS THAT THE ASSESSMENT ORDER WAS WITHOUT JURISDICTION INASMUCH AS IT HAD BEEN PASSED IN THE NAME OF AN ENTITY THAT HAD CEASED TO EXIST O N THE DATE OF THE ASSESSMENT ORDER. THE TRIBUNAL ACCEPTED THE SAID PLEA OF THE ASSESSEE AS A RESULT OF WHICH THE ASSESSMENT ORDER WAS SET ASIDE. ON REVENUE'S APPEAL THE HIGH COURT FOLLOWING ITS EA RLIER DECISION IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2011-12 AFFIRME D THE DECISION OF THE TRIBUNAL. ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 7 - ON APPEAL TO THE SUPREME COURT: HELD IT IS NECESSARY AT THE OUTSET TO ADVERT TO CERTAIN SIGNIFICANT FACETS OF THE PRESENT CASE: (I) THE INCOME WHICH IS SOUGHT TO BE SUBJECTED TO T HE CHARGE OF TAX FOR ASSESSMENT YEAR 2012-13 IS THE INCOME OF THE ERSTWH ILE ENTITY (SPIL) PRIOR TO AMALGAMATION. THIS IS ON ACCOUNT OF A TRAN SFER PRICING ADDITION OF RS. 78.97 CRORES. (II) UNDER THE APPROVED SCHEME OF AMALGAMATION, THE TRANSFEREE HAS ASSUMED THE LIABILITIES OF THE TRANSFEROR COMPANY, INCLUDING TAX LIABILITIES. (III) THE CONSEQUENCE OF THE SCHEME OF AMALGAMATION APPROVED UNDER SECTION 394 OF THE COMPANIES ACT, 1956 IS THAT THE AMALGAMATING COMPANY CEASED TO EXIST. (IV) UPON THE AMALGAMATING COMPANY CEASING TO EXIST , IT CANNOT BE REGARDED AS A PERSON UNDER SECTION 2(31) AGAINST WH OM ASSESSMENT PROCEEDINGS CAN BE INITIATED OR AN ORDER OF ASSESSM ENT PASSED; (V) A NOTICE UNDER SECTION 143 (2) WAS ISSUED ON 26 -9-2013 TO THE AMALGAMATING COMPANY, SPIL, WHICH WAS FOLLOWED BY A NOTICE TO IT UNDER SECTION 142(1); (VI) PRIOR TO THE DATE ON WHICH THE JURISDICTIONAL NOTICE UNDER SECTION 143 (2) WAS ISSUED, THE SCHEME OF AMALGAMATION HAD BEEN APPROVED ON 29-1-2013 BY THE HIGH COURT OF DELHI UNDER THE COMP ANIES ACT, 1956 WITH EFFECT FROM 1-4-2012; (VII) THE ASSESSING OFFICER ASSUMED JURISDICTION TO MAKE AN ASSESSMENT IN PURSUANCE OF THE NOTICE UNDER SECTION 143 (2). THE NOTICE WAS ISSUED IN THE NAME OF THE AMALGAMATING COMPANY IN SPITE OF TH E FACT THAT ON 2- 4-2013, THE AMALGAMATED COMPANY MSIL HAD ADDRESSED A COMMUNICATION TO THE ASSESSING OFFICER INTIMATING T HE FACT OF AMALGAMATION. IN THE ABOVE CONSPECTUS OF THE FACTS, THE INITIATION OF ASSESSMENT PROCEEDINGS AGAINST AN ENTITY WHICH HAD CEASED TO EXIST WAS VOID AB INITIO. [PARA 19] THE NOTICE UNDER SECTION 143(2) UNDER WHICH JURISDI CTION WAS ASSUMED BY THE ASSESSING OFFICER WAS ISSUED TO A NON-EXISTENT COMPANY. THE ASSESSMENT ORDER WAS ISSUED AGAINST THE AMALGAMATIN G COMPANY. THIS IS A SUBSTANTIVE ILLEGALITY AND NOT A PROCEDURAL VIOLATI ON OF THE NATURE ADVERTED TO IN SECTION 292B. IN THIS CONTEXT, IT IS NECESSAR Y TO ADVERT TO THE PROVISIONS OF SECTION 170 WHICH DEAL WITH SUCCESSIO N TO BUSINESS OTHERWISE THAN ON DEATH.[PARA 31] DESPITE THE FACT THAT THE ASSESSING OFFICER WAS INF ORMED OF THE AMALGAMATING COMPANY HAVING CEASED TO EXIST AS A RE SULT OF THE APPROVED SCHEME OF AMALGAMATION, THE JURISDICTIONAL NOTICE W AS ISSUED ONLY IN ITS NAME. THE BASIS ON WHICH JURISDICTION WAS INVOKED W AS FUNDAMENTALLY AT ODDS WITH THE LEGAL PRINCIPLE THAT THE AMALGAMATING ENTITY CEASES TO EXIST UPON THE APPROVED SCHEME OF AMALGAMATION. PARTICIPA TION IN THE PROCEEDINGS BY THE APPELLANT IN THE CIRCUMSTANCES C ANNOT OPERATE AS AN ESTOPPEL AGAINST LAW. THIS POSITION NOW HOLDS THE F IELD IN VIEW OF THE JUDGMENT OF A CO-ORDINATE BENCH OF TWO JUDGES WHICH DISMISSED THE APPEAL OF THE REVENUE IN CIT V. SPICE ENFOTAINMENT [CIVIL APPEAL NO. 285 OF 2014, DATED 2-11-2017]. THE DECISION IN SPICE ENFOTAINMEN T LTD. (SUPRA) HAS BEEN FOLLOWED IN THE CASE OF THE ASSESSEE WHILE DIS MISSING THE SPECIAL ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 8 - LEAVE PETITION FOR ASSESSMENT YEAR 2011-2012. IN DO ING SO, THIS COURT HAS RELIED ON THE DECISION IN SPICE ENFOTAINMENT (SUPRA ).[PARA33] THERE IS NO REASON TO TAKE A DIFFERENT VIEW. THERE IS A VALUE WHICH THE COURT MUST ABIDE BY IN PROMOTING THE INTEREST OF CE RTAINTY IN TAX LITIGATION. THE VIEW WHICH HAS BEEN TAKEN BY THIS COURT IN RELA TION TO THE RESPONDENT FOR ASSESSENT YEAR 2011-12 MUST BE ADOPTED IN RESPE CT OF THE PRESENT APPEAL WHICH RELATES TO ASSESSMENT YEAR 2012-13. NO T DOING SO WILL ONLY RESULT IN UNCERTAINTY AND DISPLACEMENT OF SETTLED E XPECTATIONS. THERE IS A SIGNIFICANT VALUE WHICH MUST ATTACH TO OBSERVING TH E REQUIREMENT OF CONSISTENCY AND CERTAINTY. INDIVIDUAL AFFAIRS ARE C ONDUCTED AND BUSINESS DECISIONS ARE MADE IN THE EXPECTATION OF CONSISTENC Y, UNIFORMITY AND CERTAINTY. TO DETRACT FROM THOSE PRINCIPLES IS NEIT HER EXPEDIENT NOR DESIRABLE. [PARA 34] FOR THE ABOVE REASONS, THERE IS NO MERIT IN THE APP EAL. THE APPEAL IS ACCORDINGLY DISMISSED.[PARA 35]. CASE REVIEW PR. CIT(A) V. MARUTI SUZUKI INDIA LTD- [2019] 107 T AXMANN.COM 472 (DELHI) (PARA 35) [ AFFIRMED; SEE ANNEX ]. PR. CIT V. MARUTI SUZUKI INDIA LTD. [2017] 85 TAXMA NN.COM 330/250 TAXMAN 409/397 ITR 681 (DELHI) (PARA 34) AND CIT V. SPICE ENFORTAINMENT CIVIL APPEAL NO. 285 OF 2014, DATED 2-11-2017 (PARA 33) FOLLOWED '.' THE AFORESAID HON'BLE SUPREME COURT DECISION IS FUL LY APPLICABLE TO THE FACTS OF THE APPELLANT'S CASE. 5. IT MAY BE MENTIONED HERE THAT THIS ISSUE WAS NEI THER RAISED BEFORE THE ASSESSING OFFICER NOR BEFORE THE LEARNED CIT(A) AND WHILE FILING THE APPEALS BEFORE THIS HON'BLE TRIBUNAL, THIS LEGAL ISSUE WAS INADVERTENTLY OMITTED FROM THE GROUNDS OF APPEAL. IT IS SUBMITTED THAT A PURELY LE GAL ISSUE CAN BE RAISED BEFORE THE HON'BLE ITAT AT ANY STAGE OF THE PENDENCY OF TH E APPEAL EVEN IF SUCH ISSUE WAS NOT RAISED BEFORE THE LOWER AUTHORITIES. IT IS REITERATED THAT ALL THE RELEVANT FACTS WERE ALREADY AVAILABLE ON RECORD BEFORE THE A SSESSING OFFICER AND THE LEARNED CIT(A). IN THESE CIRCUMSTANCES THIS HON'BLE TRIBUNAL CAN ADMIT THE ADDITIONAL GROUNDS OF APPEAL NOW RAISED WHICH GO TO THE VERY ROOT OF THE MATTER, IN SUPPORT OF THIS SUBMISSION, THE APPELLAN T RELIES ON THE LEGAL POSITION EMERGING FROM THE FOLLOWING CASES:- (I) CIT VS. ABHINITHA FOUNDATION P. LTD, 396 1 TR 251 (MAD.) (II) CIT VS. BRITANNIA INDIA LTD, 396 ITR 677 ( CAL.) (III) CIT(E) VS. YAMUNA EXPRESSWAY INDUS TRIAL DEVELOPMENT AUTHORITY, 395 ITR 18 (ALL.] (IV) CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY , 397 ITR 344(SC) 6. IN THE BACKDROP OF THE FACTUAL AND THE LEGAL POS ITION EXPLAINED ABOVE, IT IS PRAYED THAT THE ADDITIONAL GROUNDS OF APPEAL MAY KI NDLY BE ADMITTED AND DECIDED IN THE LIGHT OF THE BINDING SUPREME COURT D ECISION IN THE CASE OF MARUTI SUZUKI INDIA (SUPRA). ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 9 - 7. ON THE OTHER HAND THE LD. DR HAS STRONGLY OBJECT ED ON THE ADMISSION OF ADDITIONAL GROUNDS OF APPEAL AND FURTHER SUBMITTED THAT THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 8-9-2014 IN THE NAME OF THE ERSTWHILE PARTNERSHIP FIRM AND THEREFORE THE ASSESSMENT IS VA LID. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITTEDLY THE ADDIT IONAL GROUND OF APPEAL WAS NOT RAISED BY THE ASSESSEE BEFORE THE AUTHORITIES B ELOW. HOWEVER, ALL THE FACTS RELATED TO THE ADDITIONAL GROUND OF APPEAL ARE ARIS ING FROM THE ORDER OF THE AUTHORITIES BELOW AND NO ADDITIONAL FACT NEEDS TO B E REFERRED. FURTHER, WE ALSO NOTE THAT THE ISSUE RAISED BY THE ASSESSEE IN THE A DDITIONAL GROUND OF APPEAL IS LEGAL IN NATURE WHICH CAN BE ADMITTED AT ANY STAGE DURING THE PROCEEDINGS IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT I N THE CASE OF NTPC LTD VS.CIT REPORTED IN 229 ITR 383. ACCORDINGLY, WE ADM IT THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE AND PROCEED TO ADJUDI CATE THE SAME. 9. NOW COMING TO THE LEGALITY OF ORDER FRAMED BY TH E AO UNDER SECTION 143(3) READ WITH SECTION 92CA(3) OF THE ACT VIDE OR DER DATED 06-02-2017, IN THIS REGARD WE NOTE THAT THE AO ON THE FIRST PAGE O F HIS ORDER HAS MENTIONED THE NAME OF INTAS PHARMACEUTICALS WHICH WAS A PARTN ERSHIP FIRM. THUS IT IS CLEAR THAT THE ASSESSMENT ORDER WAS FRAMED IN THE N AME OF NON-EXISTENT ENTITY (INTAS PHARMACEUTICALS) AS THE INTAS PHARMACEUTICAL S WAS AMALGAMATED WITH INTAS PHARMACEUTICAL LTD W.E.F. 01-04-2014 BY THE O RDER OF THE HONBLE GUJARAT HIGH COURT DATED 28-09-2015 AND SUBSEQUENTLY INTIMA TED TO THE DEPARTMENT VIDE LETTER DATED 30-10-2015. HOWEVER, IT IS UNDISPUTED FACT THAT AT THE TIME OF ISSUE OF NOTICE UNDER SECTION 143(2) OF THE ACT, THE FIRM I.E. INTAS PHARMACEUTIC ALS WAS NOT AMALGAMATED BUT THE ASSESSMENT ORDER WAS FRAMED AFTER AMALGAMATION IN THE NAME OF INTAS PHARMACEUTICALS WHICH WAS NOT EXISTING AT THE RELEV ANT POINT OF TIME. ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 10 - WE FURTHER NOTE THAT THE DEPARTMENT WAS AWARE ABOUT THE AMALGAMATION OF THE FIRM BEFORE FRAMING THE ASSESSMENT ORDER AS THE ASS ESSEE INTIMATED TO THE DEPARTMENT AS WELL AS HONBLE HIGH COURT ALSO CALLE D THE COMMENTS FROM THE DEPARTMENT ON THE PROPOSED SCHEME OF AMALGAMATION. THUS WE CAN SAY THAT THE PROVISION OF SECTION 292B OF THE ACT WILL NOT B E APPLICABLE TO THE ASSESSEE AS IT IS NOT A CURABLE DEFECT/MISTAKE. IN THIS REGARD WE WOULD LIKE TO TAKE A NOTE OF THE POSITION OF LAW LAID DOWN BY THE HON'BLE SUPREME IN THE CASE PCIT VS. MARUTI SUZ UKI INDIA LIMITED REPORTED IN 416 ITR 613. THE FACTS IN THIS CASE ARE THAT SUZ UKI MOTORS CORPORATION, AND MARUTI SUZUKI INDIA LIMITED (IN SHORT MSIL) CONSTIT UTED A JOINT VENTURE WITH SHAREHOLDING OF 70% AND 30%. SUCH JOINT VENTURE WAS INCORPORATED AS SUZUKI MOTOR INDIA LTD. SUBSEQUENTLY W.E.F. 8.6.2005 ITS N AME WAS CHANGED TO SPIL. ON 28.11.2012 SPIL HAS FILED ITS RETURN OF INCOME. UPTO THIS DATE NO AMALGAMATION HAD TAKEN PLACE. ON JANUARY 29, 2013 A SCHEME FOR AMALGAMATION OF SPIL AND MSIL WAS APPROVED BY THE H ON'BLE HIGH COURT W.E.F. 1.4.2012. THE TERMS OF APPROVAL SCHEME PROVIDED THA T ALL LIABILITY AND DUTIES OF THE TRANSFEROR COMPANY SHALL STAND TRANSFERRED TO T HE TRANSFEREE COMPANY. ON SCHEME BEING COMING INTO EFFECT, THE TRANSFEROR COM PANY WAS TO STAND DISSOLVED WITHOUT WINDING UP. THE SCHEME STIPULATED THAT THE ORDER OF AMALGAMATION WILL NOT BE CONSTRUED AS AN ORDER GRAN TED EXEMPTION FROM THE PAYMENT OF STAMP DUTY OR TAXES, OR ANY OTHER CHARGE S, IF ANY PAYABLE IN ACCORDANCE WITH LAW. THE AO HAS INITIATED THE ASSES SMENT PROCEEDINGS BY ISSUANCE OF NOTICE UNDER SECTION 143(2) ON 26.9.201 3 FOLLOWED BY A NOTICE UNDER SECTION 142(1) OF THE ACT TO THE AMALGAMATING COMPANY. MSIL PARTICIPATED IN THE ASSESSMENT PROCEEDINGS OF ERSTW HILE AMALGAMATING ENTITY I.E. SPIL THROUGH ITS AUTHORIZED REPRESENTATIVE AND OFFICERS. THE ASSESSMENT WAS FRAMED. THEREAFTER DURING THE APPELLATE PROCEED INGS BEFORE THE TRIBUNAL THE ASSESSEE TOOK AN OBJECTION THAT FINAL ASSESSMEN T ORDER WAS PASSED ON 31.10.2016 IN THE NAME OF SPIL WHICH WAS AMALGAMATE D WITH MSIL. THE ASSESSEE TOOK AN OBJECTION THAT THE ASSESSMENT ORDE R HAS BEEN PASSED IN THE NAME OF COMPANY WHICH CEASED TO EXIST AND THEREFORE , THE ASSESSMENT ORDER IS ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 11 - VOID AB INITIO. THIS PLEA OF THE ASSESSEE WAS ACCEP TED BY THE TRIBUNAL. THIS ORDER OF THE TRIBUNAL WAS UPHELD BY THE HON'BLE HIG H COURT. ULTIMATELY ISSUE TRAVELLED UPTO HON'BLE SUPREME COURT. WHILE TAKING COGNIZANCE OF THE SUBMISSIONS, AND THE PROPOSITION LAID DOWN IN VARIO US HIGH COURTS' DECISIONS, THE HON'BLE SUPREME COURT MADE THE FOLLOWING OBSERV ATIONS: '19. WHILE ASSESSING THE MERITS OF THE RIVAL SUBMIS SIONS, IT IS NECESSARY AT THE OUTSET TO ADVERT TO CERTAIN SIGNIFICANT FACETS OF THE PRESENT CASE: (I) FIRSTLY, THE INCOME WHICH IS SOUGHT TO BE SUBJE CTED TO THE CHARGE OF TAX FOR AY 2012- 13 IS THE INCOME OF THE ERSTWHILE ENTITY (SPIL) PRI OR TO AMALGAMATION. THIS IS ON ACCOUNT OF A TRANSFER PRICING ADDITION OF RS. 78.97 CRORES; (II) SECONDLY, UNDER THE APPROVED SCHEME OF AMALGAM ATION, THE TRANSFEREE HAS ASSUMED THE LIABILITIES OF THE TRANSFEROR COMPANY, INCLUDING TAX LIABILITIES; (III) THIRDLY, THE CONSEQUENCE OF THE SCHEME OF AMA LGAMATION APPROVED UNDER SECTION 394 OF THE COMPANIES ACT 1956 IS THAT THE AMALGAMAT ING COMPANY CEASED TO EXIST. IN SARASWATI INDUSTRIAL SYNDICATE LTD., (SUPRA) THE PR INCIPLE HAS BEEN FORMULATED BY THIS COURT IN THE FOLLOWING OBSERVATIONS: '5. GENERALLY, WHERE ONLY ONE COMPANY IS INVOLVED IN CHANGE AND THE RIGHTS OF THE SHAREHOLDERS AND CR EDITORS ARE VARIED, IT AMOUNTS TO RECONSTRUCTION OR REORGANISATION OF SCHEME OF ARRAN GEMENT. IN AMALGAMATION TWO OR MORE COMPANIES ARE FUSED INTO ONE BY MERGER OR BY T AKING OVER BY ANOTHER. RECONSTRUCTION OR 'AMALGAMATION' HAS NO PRECISE LEG AL MEANING. THE AMALGAMATION IS A BLENDING OF TWO OR MORE EXISTING UNDERTAKINGS INTO ONE UNDERTAKING, THE SHAREHOLDERS OF EACH BLENDING COMPANY BECOME SUBSTANTIALLY THE S HAREHOLDERS IN THE COMPANY WHICH IS TO CARRY ON THE BLENDED UNDERTAKINGS. THERE MAY BE AMALGAMATION EITHER BY THE TRANSFER OF TWO OR MORE UNDERTAKINGS TO A NEW COMPA NY, 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 CON TEXT IN WHICH THE TERM IS USED MAY SHOW THAT IT IS INTENDED TO INCLUDE SUCH AN ACQUISI TION. SEE: HALSBURY'S LAWS OF ENGLAND (4TH EDITION VOLUME 7 PARA 1539). TWO COMPANIES MAY JOIN TO FORM A NEW COMPANY, BUT THERE MAY BE ABSORPTION OR BLENDING OF ONE BY T HE 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.' (IV) FOURTHLY, UPON THE AMALGAMATING COMPANY CEASIN G TO EXIST, IT CANNOT BE REGARDED AS A PERSON UNDER SECTION 2(31) OF THE ACT 1961 AGA INST WHOM ASSESSMENT PROCEEDINGS CAN BE INITIATED OR AN ORDER OF ASSESSMENT PASSED; (V) FIFTHLY, A NOTICE UNDER SECTION 143 (2) WAS ISS UED ON 26 SEPTEMBER 2013. TO THE AMALGAMATING COMPANY, SPIL, WHICH WAS FOLLOWED BY A NOTICE TO IT UNDER SECTION 142(1); (VI) SIXTHLY, PRIOR TO THE DATE ON WHICH THE JURISD ICTIONAL NOTICE UNDER SECTION 143 (2) WAS ISSUED, THE SCHEME OF AMALGAMATION HAD BEEN APP ROVED ON 29 JANUARY 2013 BY THE HIGH COURT OF DELHI UNDER THE COMPANIES ACT 195 6 WITH EFFECT FROM 1 APRIL 2012; (VII) SEVENTHLY, THE ASSESSING OFFICER ASSUMED JURI SDICTION TO MAKE AN ASSESSMENT IN PURSUANCE OF THE NOTICE UNDER SECTION 143 (2). THE NOTICE WAS ISSUED IN THE NAME OF THE AMALGAMATING COMPANY IN SPITE OF THE FACT THAT ON 2 APRIL 2013, THE AMALGAMATED COMPANY MSIL HAD ADDRESSED A COMMUNICATION TO THE A SSESSING OFFICER INTIMATING THE FACT OF AMALGAMATION. IN THE ABOVE CONSPECTUS OF TH E FACTS, THE INITIATION OF ASSESSMENT PROCEEDINGS AGAINST AN ENTITY WHICH HAD CEASED TO E XIST WAS VOID AB INITIO. ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 12 - 20. IN SPICE ENTERTAINMENT, (SUPRA) A DIVISION BENC H OF THE DELHI HIGH COURT DEALT WITH THE QUESTION AS TO WHETHER AN ASSESSMENT IN THE NAM E OF A COMPANY WHICH HAS BEEN AMALGAMATED AND HAS BEEN DISSOLVED IS NULL AND VOID OR, WHETHER THE FRAMING OF AN ASSESSMENT IN THE NAME OF SUCH COMPANY IS MERELY A PROCEDURAL DEFECT WHICH CAN BE CURED. THE HIGH COURT HELD THAT UPON A NOTICE UNDER SECTION 143 (2) BEING ADDRESSED, THE AMALGAMATED COMPANY HAD BROUGHT THE FACT OF THE AMALGAMATION TO THE NOTICE OF THE ASSESSING OFFICER. DESPITE THIS, THE ASSESSING OFFICER DID NOT SUBSTITUTE THE NAME OF THE AMALGAMATED COMPANY AND PROCEEDED TO MAKE AN AS SESSMENT IN THE NAME OF A NON-EXISTENT COMPANY WHICH RENDERS IT VOID. THIS, I N THE VIEW OF THE HIGH COURT, WAS NOT MERELY A PROCEDURAL DEFECT. MOREOVER, THE PARTI CIPATION BY THE AMALGAMATED COMPANY WOULD HAVE NO EFFECT SINCE THERE COULD BE N O ESTOPPEL AGAINST LAW : '11. AFTER THE SANCTION OF THE SCHEME ON 11TH APRIL , 2004, THE SPICE CEASES TO EXIT W.E.F. 1ST JULY, 2003. 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 APP ELLANT/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. INS TEAD, THE ASSESSING OFFICER MADE THE ASSESSMENT IN THE NAME OF M/S SPICE WHICH WAS NON E XISTING ENTITY ON THAT DAY. IN SUCH PROCEEDINGS AN ASSESSMENT ORDER PASSED IN THE NAME OF M/S SPICE WOULD CLEARLY BE VOID. SUCH A DEFECT CANNOT BE TREATED AS PROCEDU RAL DEFECT. MERE PARTICIPATION BY THE APPELLANT WOULD BE OF NO EFFECT AS THERE IS NO ESTO PPEL AGAINST LAW. 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 NA TURE WHICH COULD BE CURED BY INVOKING THE PROVISIONS OF SECTION 292B OF THE ACT. ' FOLLOWING THE DECISION IN SPICE ENTERTAINMENT, (SUP RA) THE DELHI HIGH COURT QUASHED ASSESSMENT ORDERS WHICH WERE FRAMED IN THE NAME OF THE AMALGAMATING COMPANY IN: (I) DIMENSION APPARELS (SUPRA); (II) MICRON STEELS; AND (SUPRA) (III) MICRA INDIA (SUPRA). 21. IN DIMENSION APPARELS, (SUPRA) A DIVISION BENCH OF THE DELHI HIGH COURT AFFIRMED THE QUASHING OF AN ASSESSMENT ORDER DATED 31 DECEMB ER 2010. THE RESPONDENT HAD AMALGAMATED WITH ANOTHER COMPANY AND THUS, CEASED T O EXIST FROM 7 DECEMBER 2009. THE COURT REJECTED THE ARGUMENT OF THE REVENUE THAT THE ASSESSMENT WAS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH THE ACT BY REASON OF THE FACT THAT THE ASSESSING OFFICER HAD USED CORRECT NOMENCLATURE IN ADDRESSING THE ASS ESSEE; STATED THE FACT THAT THE COMPANY HAD AMALGAMATED AND MENTIONED THE CORRECT A DDRESS OF THE AMALGAMATED COMPANY. IT WAS THE REVENUE'S CONTENTION THAT THE O MISSION ON THE PART OF THE ASSESSING OFFICER TO MENTION THE NAME OF THE AMALGA MATED COMPANY IS A PROCEDURAL DEFECT. THE DELHI HIGH COURT REJECTED THIS CONTENTI ON. IN DOING SO, IT RELIED ON THE HOLDING IN SPICE ENTERTAINMENT, (SUPRA) WHERE THE H IGH COURT EXPRESSLY CLARIFIED THAT 'THE FRAMING OF ASSESSMENT AGAINST A NON-EXISTING E NTITY/PERSON' IS A JURISDICTIONAL DEFECT. THE DIVISION BENCH ALSO RELIED ON THE HOLDI NG IN SPICE ENTERTAINMENT (SUPRA) THAT PARTICIPATION BY THE AMALGAMATED COMPANY IN PR OCEEDINGS DOES NOT CURE THE DEFECT AS 'THERE CAN BE NO ESTOPPEL IN LAW', TO AFF IRM THE QUASHING OF THE ASSESSMENT ORDER. 22. IN MICRON STEELS, (SUPRA) A NOTICE WAS ISSUED T O MICRON STEELS PVT LTD (ORIGINAL ASSESSEE) AFTER IT HAD AMALGAMATED WITH LAKHANPAL I NFRASTRUCTURE PVT LTD. A DIVISION BENCH OF THE DELHI HIGH COURT UPHELD THE SETTING AS IDE OF ASSESSMENT ORDERS, NOTING THAT SPICE ENTERTAINMENT (SUPRA) IS AN AUTHORITY FO R THE PROPOSITION THAT COMPLETION OF ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 13 - ASSESSMENT IN RESPECT OF A NON-EXISTENT COMPANY DUE TO THE AMALGAMATION ORDER, WOULD RENDER THE ASSESSMENT A NULLITY. 23. IN MICRA INDIA, (SUPRA) THE ORIGINAL ASSESSEE M ICRA INDIA PVT. LTD HAD AMALGAMATED WITH DYNAMIC BUILDMART (P) LTD. NOTICE WAS ISSUED T O THE ORIGINAL ASSESSEE BY THE REVENUE AFTER THE FACT OF AMALGAMATION HAD BEEN COM MUNICATED TO IT. THE COURT NOTED THAT THOUGH THE ASSESSEE HAD PARTICIPATED IN THE AS SESSMENT, THE ORIGINAL ASSESSEE WAS NO LONGER IN EXISTENCE AND THE ASSESSMENT OFFICER D ID NOT THE TAKE THE REMEDIAL MEASURE OF TRANSPOSING THE TRANSFEREE AS THE COMPAN Y WHICH HAD TO BE ASSESSED. INSTEAD, THE ORIGINAL ASSESSEE WAS DESCRIBED AS ONE IN EXISTENCE AND THE ORDER MENTIONED THE TRANSFEREE'S NAME BELOW THAT OF THE O RIGINAL ASSESSEE. THE DIVISION BENCH ADVERTED TO THE JUDGMENT IN DIMENSION APPAREL S (SUPRA) WHEREIN THE HIGH COURT HAD DISCUSSED THE RULING IN SPICE ENTERTAINMENT (SU PRA). IT WAS HELD THAT THIS WAS A CASE WHERE THE ASSESSMENT WAS CONTRARY TO LAW, HAVI NG BEEN COMPLETED AGAINST A NON- EXISTENT COMPANY.' HON'BLE SUPREME COURT THEREAFTER TOOK NOTE OF THE J UDGMENT IN THE CASE OF SKY LIGHT HOSPITALITY VS. ACIT, 259 TAXMAN 390 (SC). TH IS JUDGMENT WAS PRESSED IN SERVICE BY THE REVENUE TO POINT OUT THAT IF AN ORDE R WAS FRAMED IN ACCORDANCE WITH LAW IN THE NAME OF AMALGAMATING COMPANY, THEN IT WOULD AMOUNT TO MISTAKE, DEFECT OR OMISSION WHICH IS CURABLE UNDER SECTION 292B OF THE INCOME TAX ACT. HON'BLE SUPREME COURT HAS DEALT WITH THIS JUDGMENT AND EXPLAINED ITS IMPACT. HON'BLE SUPREME COURT ULTIMATELY UPHELD THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF MARUTI SUZUKI (SUPRA) AND HELD THAT ASSESSMENT ORDER PASSED SUBSEQUENTLY IN THE NAME OF NON-EXISTING COM PANY WOULD BE WITHOUT JURISDICTION AND A NULLITY. CONCLUDING PARAGRAPH OF THE JUDGMENT ARE WORTH TO NOTE 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 RE SULT 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 APPROV ED SCHEME OF AMALGAMATION. PARTICIPATION IN THE PROCEEDINGS BY THE APPELLANT IN THE CIRCUMST ANCES CANNOT OPERATE AS AN ESTOPPEL AGAINST LAW. THIS POSITION NOW HOLDS THE FIELD IN VIEW OF T HE JUDGMENT OF A CO-ORDINATE BENCH OF TWO LEARNED JUDGES WHICH DISMISSED THE APPEAL OF THE RE VENUE IN SPICE ENFOTAINMENT (SUPRA) ON 2 NOVEMBER 2017. THE DECISION IN SPICE ENFOTAINMENT H AS BEEN FOLLOWED IN THE CASE OF THE RESPONDENT WHILE DISMISSING THE SPECIAL LEAVE PETIT ION FOR AY 2011-2012. IN DOING SO, THIS COURT HAS RELIED ON THE DECISION IN SPICE ENFOTAINM ENT (SUPRA). 34. WE FIND NO REASON TO TAKE A DIFFERENT VIEW. THE RE IS A VALUE WHICH THE COURT MUST ABIDE BY IN PROMOTING THE INTEREST OF CERTAINTY IN TAX LITIGATI ON. THE VIEW WHICH HAS BEEN TAKEN BY THIS COURT IN RELATION TO THE RESPONDENT FOR AY 2011- 12 MUST, IN OUR VIEW BE ADOPTED IN RESPECT OF THE PRESENT APPEAL WHICH RELATES TO AY 2012-13. NOT DOI NG SO WILL ONLY RESULT IN UNCERTAINTY AND DISPLACEMENT OF SETTLED EXPECTATIONS. THERE IS A SI GNIFICANT VALUE WHICH MUST ATTACH TO OBSERVING THE REQUIREMENT OF CONSISTENCY AND CERTAINTY. INDIV IDUAL AFFAIRS ARE CONDUCTED AND BUSINESS DECISIONS ARE MADE IN THE EXPECTATION OF CONSISTENC Y,UNIFORMITY AND CERTAINTY. TO DETRACT FROM THOSE PRINCIPLES IS NEITHER EXPEDIENT NOR DESIRABLE .' ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 14 - IN THE CASE OF EMERALD COMPANY LTD., ITAT KOLKATTA BENCH HAS ALSO DEALT WITH SIMILAR SITUATION AFTER MAKING REFERENCE TO JUDGMEN T OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DIMENSION APPARELS P.L TD., 370 ITR 288 (DEL) AS WELL AS DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF SPICE ENTERTAINMENT LTD. THE ITAT HAS ALSO MADE REFERENCE TO THE DECISI ON OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. INTEL TECHNOLOGY LTD. P. LTD., 380 ITR 272 (KAR.). THE TRIBUNAL HAS HELD THAT ACTION UNDER SEC TION 263 IS A JURISDICTIONAL ACTION AGAINST AN ASSESSEE. IN THE CASE OF A COMPAN Y, THE LD. COMMISSIONER WAS REQUIRED TO ISSUE A SHOW CAUSE NOTICE AGAINST A JURIDICAL PERSON CONTEMPLATED IN SECTION 2(31) OF THE INCOME TAX ACT AND IF A JURIDICAL PERSON CEASES TO EXIST THEN IT WOULD NOT BE CONSTRUED AS A PERSON WITHIN THE MEANING OF SECTION 2(31) AGAINST WHOM ANY ACTION CAN BE TAK EN. THE COMMISSIONER WOULD NOT ASSUME PROPER JURISDICTION AND SUCH TYPE OF DEFECT WOULD NOT BE CURED WITH HELP OF SECTION 292B OF THE ACT, BECAUSE IT IS NOT A PROCEDURAL IRREGULARITY WHICH COULD BE CURED. WE ALSO NOTE TH AT THIS TRIBUNAL IN THE CASE OF SNOWHILL AGENCIES PVT. LTD. VS. PR. CIT BEARING ITA NO. 1775/AHD/2019 VIDE ORDER DATED 21-1-2020 INVOLVING IDENTICAL FACTS AND CIRCUMSTANCES HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. IN VIEW OF ABO VE, WE NOTE THAT THE ASSESSMENT FRAMED UNDER SECTION 143(3) R.W.S. 92CA OF THE ACT IS NOT SUSTAINABLE. HENCE THE ADDITIONAL GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 10. SINCE THE LEGAL ISSUES ARE ADDRESSED AND DECIDE D IN FAVOR OF THE ASSESSEE, WE REFRAIN TO GIVE OUR FINDINGS ON MERITS OF DISALLOWANCES UNDER THE PROVISIONS OF THE ACT. ACCORDINGLY THE GROUNDS RAIS ED BY THE ASSESSEE DO NOT REQUIRE ANY SEPARATE ADJUDICATION. THUS WE DISMISS THE SAME AS INFRUCTUOUS. 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. COMING TO ITA 678/AHD/2019 AY 2014-15 12. AT THE OUTSET WE NOTE THAT THIS TRIBUNAL IN THE OWN CASE OF THE ASSESSEE (SUPRA) INVOLVING IDENTICAL FACTS AND CIRCUMSTANCES HAS DE CIDED THE ISSUE IN THE ITA NOS. 677 & 678/AHD/19 [INTAS LIFESCIENCES VS. ACIT] A.Y. 2013-14 & 2014-15 - 15 - FAVOUR OF THE ASSESSEE. FOR THE DETAILED DISCUSSION , PLEASE REFER THE RELEVANT PARAGRAPH BEARING NO. 8 TO 9 OF THIS ORDER. THE LEA RNED DR AT THE TIME OF HEARING HAS ALSO NOT BROUGHT ANYTHING ON RECORD CON TRARY TO THE ARGUMENT ADVANCED BY THE LEARNED AR. HENCE RESPECTFULLY FOLL OWING THE PRINCIPLE LAID DOWN IN THE OWN CASE OF THE ASSESSEE BY THIS TRIBUN AL, WE NOTE THAT THE ASSESSMENT FRAMED UNDER SECTION 143(3) R.W.S. 92CA OF THE ACT IS NOT SUSTAINABLE. HENCE THE ADDITIONAL GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 13. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. SD/- SD/- (RAJPAL YADAV) (WASEEM AHMED) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD: DATED 04/06/2020 TRUE COPY S. K. SINHA !'# $#! / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. $ / ASSESSEE 3. ) *+ , / CONCERNED CIT 4. ,- / CIT (A) 5. 012 33*+, *+#, 56$)$ / DR, ITAT, AHMEDABAD 6. 289 : / GUARD FILE. BY ORDER / $% , ;/5 *+#, 56$)$ < THIS ORDER PRONOUNCED IN OPEN COURT 04/06/2020