BASF INDIA LTD ( BASF COATINGS INDIA P.LD NOW AMALGAMATED WITH BASF INDIA LTD), MUMBAI V. ACIT CIR 6(1), MUMBAI

ITA 761/MUM/2013

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2871 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2008-2009
• Appeal Filed On: 29-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR HANSARI
• Assessee Lawyers: HEENA DOSHI
• Keywords: Transfer pricing; Scheme of amalgamation; Revised return
• Section: 144C; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES K , MUMBAI BEFORE SHRI SAKTIJIT DEY (JM) AND S HRI N.K. PRADHAN (AM ) ITA NO. 761/MUM/2013 ASSESSMENT Y EAR: 2008 - 09 & ITA NO. 2080/MUM/2014 ASSESSMENT Y EAR: 2009 - 10 BASF INDIA LIMITED (BASF COATINGS IN DIA PVT. LTD., (NOW AMALGAMATED WITH BASF INDIA LTD.), VIBGYOR TOWERS, UNIT NO. 101, 1 ST FLOOR, G BLOCK, C - 62, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400051 PAN : AABCB2364G VS. THE DY. COMM. OF INCOME TAX - 6(1), 5 TH FLOOR, AAYAKAR BHAVAN, M.K. MA RG, MUMBAI (APPELLANT) (RESPONDENT) & ITA NO. 2080/MUM/2014 ASSESSMENT Y EAR: 2009 - 10 M/S BASF INDIA LTD. (INTO WHICH BASF POLYURETH INDIA LTD. IS AMALGAMATED), VIBGYOR TOWERS, UNIT NO. 101, 1 ST FLOOR, G BLOCK, C - 62, BANDRA KURLA COMPLEX, BANDRA (E) , MUMBAI - 400051 PAN : AACCB5918E VS. THE DY. CIT - 6(1), AAYAKAR BHAVAN, M.K. KARVE ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. HEENA DOSHI (AR) REVENUE BY : SHRI AKHTAR H. ANSARI (D R) DATE OF HEARING: 09/10/2020 DATE OF PRONOUNCEMENT: 22 / 10/2020 O R D E R 2 ITA NO. 761 / MUM/2013 & ITA NO. 2080/MUM/2014 ASSESSMENT YEAR S : 2008 - 09 AND 2009 - 10 PER S AKTIJIT DEY , JM CAPTIONED APPEALS BY THE ASSESSEE ARISE OUT OF TWO ASSESSMENT ORDERS PASSED U/S 143 (3) R.W.S. 144C (13) OF THE ACT. IN PURSUANCE TO THE DIRECTIONS OF LEARNED DISPUTE RESOLUTION PANEL (DRP), F OR THE ASSESSMENT YEAR S 2008 - 09 AND 2009 - 10. 2. THOUGH, THE ASSESSEE HAS RAISED MULTIPLE GROUNDS CONTESTING THE ADDITIONS MADE IN THE ASSESSMENT ORDERS. HOWEVER, FOR THE FIRST TIME BEFORE TH E TRIBUNAL, THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDERS . IN THE ADDITIONAL GROUND , THE ASSESSEE HAS CHALLENGED THE VALIDITY/LEGALITY OF THE ASSESSMENT ORDER S PASSED IN THE NAME OF NON - EXISTING ENTITIES. 3 . THE LEARNED COUNSEL FOR THE ASSESSEE DRAWING OUR ATTENTION TO THE IMPUGNED ASSESSMENT ORDERS SUBMITTED , THE ASSESSING OFFICER HAVING PASSED THE ASSESSMENT ORDERS IN THE NAME OF ENTITIES WHICH ARE NO LONGER IN EXISTENCE , HAVING MERGED WITH THE PRESEN T APPELLANT , THE ASSESSMENT ORDERS ARE VOID - AB - INITIO. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE , THOUGH , HAS NOT DISPUTED THE FACTUAL POSITION THAT THE ENTITIES IN WHOSE NAME THE ASSESSMENT ORDERS HAVE BEEN PASSED HAVING ALREADY MERGED WITH THE PRESENT APPEL LANT ARE NO LONGER IN EXISTENCE, H OWEVER, HE SUBMITTED THAT THE ASSESSMENT ORDERS PASSED ARE VALID. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , THOUGH , THE HONBLE HIGH COURT PASSED ORDERS ON 14 TH JANUARY, 2011 APPROVING AMALGAMATION OF THE COMPANIES WITH BASF INDIA LTD. , H OWEVER, THE ASSESSE E HAS NOT TAKEN CONSEQUENTIAL STEPS , SUCH AS , SURRENDERING THE OLD PAN NO. AND APPLYING NEW PAN NO., NOT FILED REVISED RETURN OF INCOME WITH NEW PAN, NO INFORMATION WAS SUBMITTED WHETHER ROC WAS INTI MATED THE FACT OF AMALGAM ATION AND REVISED FINANCIAL STATEMENTS WERE FILED. FURTHER , T HE LEARNED DEPARTMENTAL REPRESENTATIVE, DRAWING OUR ATTENTION TO THE ASSESSMENT ORDER S, SUBMITTED THAT THE ASSESSING OFFICER HAS MENTIONED T HE NAME OF THE ERSTWHILE COMPA NIES FOLLOWED BY THE NAME OF THE COMPANY WITH WHICH THEY WERE MERGED . T HEREFORE , NO PREJUDICE HAS BEEN CAUSED TO THE ASSESSEE . E XPLAINING FURTHER , 3 ITA NO. 761 / MUM/2013 & ITA NO. 2080/MUM/2014 ASSESSMENT YEAR S : 2008 - 09 AND 2009 - 10 HE SUBMITTED , THE REASON FOR MENTIONING THE NAME AND PAN NO. OF THE AMALGAMATED COMPANY IN THE ASSESSMENT ORD ER S IS BECAUSE REFERENCE TO THE TRANSFER PRICING OFFICER WAS MADE BEFORE THE AMALGAMATION. FINALLY, HE SUBMITTED , THE APPEAL S FILED BY THE ASSESS EE ARE NOT MAINTAINABLE AS IN THE CHALLAN S FOR PAYING THE APPEAL FEE THE ASSESSEE HAS MENTIONED THE NAME OF THE ERSTWHILE COMPANY. 5. IN REJOINDER, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED , THE VERY FACT THAT THE ASSESSMENT ORDERS HAVE BEEN PASSED IN THE NAME OF NON - EXISTING ENTITIES MAKE THEM INVALID. FURTHER, SHE SUBMITTED , MENTIONING THE NAME OF AM ALGAMATING COMPANY AFTERWARDS IN TH E ASSESSMENT ORDERS WOULD NOT VALIDATE THEM. S HE SUBMITTED , UNDER IDENTICAL FACTS AND CIRCUMSTANCES, THE HONBLE SUPREME COURT IN CASE OF PR. CIT VS. MARUTI SUZUKI INDIA LTD. (2019) 416 ITR 613 (SC) HAS HELD THE ASSESSMEN T ORDERS PASSED IN THE NAME OF AMALGAMATED COMPANY TO BE INVALID. 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. THE ISSUE RAISED IN THE ADDITIONAL GROUND BEING A PURELY LEGA L AND JURISDICTIONAL ISSUE GOING TO THE ROOT OF THE MATTER AND CONSIDERING THE FACT THAT THE ISSUE CAN BE DECIDED ON THE BASIS OF FACTS AND MATERIAL AVAILABLE ON RECORD AND DOES NOT REQUIRE INVESTIGATION INTO FRESH FACT S, WE ARE INCLINED TO ADMIT THE ADDITIONAL GROUND FOR ADJUDICATION. 7. BEF ORE WE PROCEED TO DECIDE THE ISSUE, IT IS NECESSARY TO DEAL WITH THE BASIC FACTS . B Y VIRTUE OF ORDER DATED 14.01.2011 PASSED BY THE HONBLE BOMBAY HIGH COURT , BASF COATINGS (INDIA) PRIVATE LTD. A ND BASF POLYURETHANES INDIA LTD. AMALGAMATED (MERGED) WITH BA SF INDIA LTD. AS PER THE SCHEME OF AMALGAMATION APPROVED BY THE HONBLE BOMBAY HIGH COURT , THE AMALGAMATION WAS EFFECTIVE FROM 1 ST APRIL, 2010 . A FTER THE DECISION OF THE HONBLE BOMBAY HIGH COURT APPROVING THE AMALGAMATION OF THE AFORESAID TWO C OMPANIES WI TH THE PRESENT APPELLANT, WHICH HAPPENED AFTER FILING OF RETURN OF INCOME FOR THE ASSESSMENT YEAR S UNDER DISPUTE IN THE PRESENT APPEAL S , THE ASSESSEE ON 8 TH MARCH, 2011 INTIMATED IN WRITING TO THE ASSESSING OFFICER ABOUT THE FACT OF AMALGAMATION OF THE TWO ENTITIES WITH BASF INDIA LTD. A LONG WITH THE SAID 4 ITA NO. 761 / MUM/2013 & ITA NO. 2080/MUM/2014 ASSESSMENT YEAR S : 2008 - 09 AND 2009 - 10 LETTER, THE ASSESSE ALSO ENCLOSED COPY OF THE ORDER PASSED BY THE HONBLE BOMBAY HIGH COURT APPROVING AMALGAMATION. IN SPITE OF SUCH INTIMATION BY THE ASSESSEE , THE ASSESSING OFFICER NOT ONLY PROCEEDED TO PASS THE DRAFT ASSESSMENT ORDERS IN THE NAME OF THE ERSTWHILE COMPANIES BUT ALSO PROCEEDED TO PASS THE FINAL ASSESSMENT ORDERS IN T HE NAME OF THE ERSTWHILE COMPANIES. TO BE PRECISE, AGAINST THE NAME OF THE ASSESSEE IN THE ASSESSMENT ORDERS. THE ASSESSING O FFICER MENTIONED AS UNDER: - (I) M/S BASF COATINGS INDIA PVT. LTD. (NOW MERGED WITH BASF INDIA LTD.) (II) M/S BASF POLYURETHANES INDIA LTD. (NOW AMALGAMATED INTO M/S BASF INDIA LTD.) 8. THUS, AS COULD BE SEEN FROM THE IMPUGNED ASSESSMENT ORDER S , THE AS SESSING O FFICER HAS MENTIONED THE NAME S OF THE ERSTWHILE ENTITIES FOLLOWED BY THE NAME OF THE AMALGAMATING COMPANY. EVEN, THE DEMAND NOTICE HAS BEEN ISSUED ONLY IN THE NAME OF THE AMALGAMATED COMPANY. THEREFORE, T HE ISSUE BEFORE US IS , WHETHER THE ASSESSMENT ORDERS PASSED IN SUCH A MANNER A RE LEGAL AND VALID. T HE ISSUE RELATING TO THE VALIDITY OF ORDER S PASSED IN THE NAME OF NON - EXISTING ENTITIES HAS CAME UP FOR JUDICIAL SCRUTINY IN VARIOUS CASES. HOWEVER, AT PRESENT, THE ISSUE IS NO MORE RES - INTEGRA AS THE HONBLE APEX COURT IN THE CASE OF PCIT VS. MARUTI SUZUKI INDIA LTD. (SUPRA) HAS SET THE DISPUTE AT REST. A S COULD BE SEEN FROM THE FACTUAL MATRIX OF M/S MARUTI SUZUKI INDIA LTD. (SUPRA) CASE , THE ASSESSING OFFICER PASSED THE FINAL ASSESSMENT ORDER BY MENTIONING T HE NAME OF THE ASSESSEE AS UNDER: - M/S SUZUKI POWERTRAIN INDIA LTD. ( AMALGAMATED WITH M/S MARUTI SUZUK I INDIA LTD.) 9. THE AFORESAID FACTUAL POSITION HAS BEEN CLEARLY CAPTURED IN PARAGRAPH 15 OF THE DECISION RENDERED BY THE HON BLE APEX COURT IN THE CASE OF M/S MARUTI SUZUKI INDIA LT D. THUS, VIEWED IN THE AFORESAID CONTEXT, IT IS VERY MUCH CLEAR THAT THE FACTS INVOLVED IN THE PRESENT ASSESSEES CASE ARE IDENTICAL TO THE FACTS INVOLVED IN THE CASE OF M/S MARUTI SUZUKI INDIA LTD. (SUPRA). W HILE DEA LING WITH THE ISSUE OF VALIDITY OF THE ASSESSMENT ORDER PASSED IN THE NAME OF THE ERSTWHILE COMPANY FOLLOWED BY THE NAME OF THE AMALGAMATING COMPANY, 5 ITA NO. 761 / MUM/2013 & ITA NO. 2080/MUM/2014 ASSESSMENT YEAR S : 2008 - 09 AND 2009 - 10 THE HONBLE SUPREME COURT HELD THE ASSESSMENT ORDER TO BE INVALID AS IT WAS PASSED THE NAME OF A NON - EXIST ING ENTITY. THUS, A S COULD BE SEEN , THE FACTS ARE NO DIFFERENT IN CASE THE PRESENT ASSESSEE AS WELL , AS , THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDERS IN THE NAME OF THE ERSTWHILE COMPANIES. THOUGH , OF COURSE , HE HAS ALSO MENTIONED THE NAME OF THE AMALGAMATING COMPANIES AFTERWARDS. HOWEVER, THAT WILL NOT VALIDATE THE ORDERS IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF M/S MARUTI SUZUKI INDIA LTD. (SUPRA) . THERFORE, THE ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER HAVE TO BE DECLARED AS INVALID AND QUASHED . ACCORDINGLY, WE DO SO. T HE ADDITIONAL GROUNDS ARE ALLOWED. 10. AS WE HAVE QUASHED THE ASSESSMENT ORDER S WHILE DECIDING THE ADDITIONAL GROUND , THE OTHER GROUNDS RAISED BY THE ASSESSEE HAVING BECOME INFRUCTUOUS DO NO T REQUIRE ADJUDICATION. 11. IN THE RESULT, APPEAL S FILED BY THE ASSESSEE ARE ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 22TH OCTOBER , 2020 . SD/ SD/ ( N.K. PRADHAN ) ( S AKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 22 / 1 0 /2020 ALINDRA, PS 6 ITA NO. 761 / MUM/2013 & ITA NO. 2080/MUM/2014 ASSESSMENT YEAR S : 2008 - 09 AND 2009 - 10 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI