Appeal details
Counselvise Citation
[2022] 104 COUNSELVISE.COM (IT) 3165 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
18-08-2022
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
D
Next Hearing Date
18-08-2022
Assessment Year
2009-2010
Appeal Filed On
25-05-2022
Judgement Text
आयकर अपीलȣय अͬधकरण, ‘डी’ Ûयायपीठ, चेÛनई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI Įी महावीर ͧसंह, उपाÚय¢ एवं Įी मनोज क ु मार अĒवाल, लेखा सदèय के सम¢ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER M.A No.58/Chny/2022 (Arising out of ITA No.697/Chny/2014) (िनधाŊरण वषŊ / Assessment Year: 2009-10) The Deputy Commissioner of Income Tax, Corporate Circle-1, Coimbatore. Vs. M/s. Lakshmi Machine Works Ltd., (amalgamated company of LMW Machinery Ltd. w.e.f 01.04.2012) S.R.K.V. Post, Perianaickenpalayam, Coimbatore – 641 020. [PAN: AAACL-5244-N] (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Dr. S. Palanikumar, CIT Ĥ×यथȸ कȧ ओर से /Respondent by : Shri R. Vijayaraghavan, Advocate स ु नवाई कȧ तारȣख/Date of Hearing : 19.08.2022 घोषणा कȧ तारȣख /Date of Pronouncement : 19.08.2022 आदेश / O R D E R Per Mahavir Singh, Vice President : This miscellaneous application filed by Revenue against the order of the Tribunal in ITA No.697/CHNY/2014, order dated 22.02.2022 for the assessment year 2009-10. The relevant petition including the issues raised reads as under:- - 2 - MA No.58/Chny/2022 “ The Miscellaneous Application is hereby filed before the Hon'ble ITAT, 'D' Bench, Chennai against the dismissal order of the Hon'ble ITAT, 'D' Bench. Chennai vide ITA No.697/CHNY/2014 dated 22.12.2022, on the following grounds: 1. Hon'ble ITAT allowed the appeal of the appellant company by admitting the Additional Grounds of Appeal filed after two years from the due date of filing of main Grounds of Appeal. The Additional Grounds of Appeal was filed by the appellant company on 25.1.2016, where they sought that the learned DRP ought to have quashed the draft order of TPO as the company which stood dissolved w.e.f 01.04.2012 as per the order of Hon'ble High Court of Order of Madras dated 26.04.2013, pursuant to the Scheme of Amalgamation of the assessee company, i.e) LMW Machinery Ltd (the transferor company) with M/s Lakshmi Machine Works Ltd (the transferee company). The Additional Grounds of appeal are as under: (i) "The impugned order u/s 143 r.w.s 144C of the IT Act 1961 dated 16.01.2014 on the dissolved Company M/s Rieter LMW Machinery Limited, is opposed to law and ab initio void. (ii) The learned DRP, ought to have quashed the draft order of the TPO, as the Company stood dissolved with effect from 01.04.2012 as per the order of the Hon'ble High Court of Madras dated 26 th day of April 2013, a copy of which position was brought to the notice of the DRP, in the facts and circumstances of the case and in law. " 2. The assessee company was originally having the name M/s Reiter LMW Machinery Ltd (PAN: AABCR0309M) which was later renamed to M/s LMW Machinery Ltd got amalgamated with M/s Lakshmi Machine Works Ltd (PAN: AAACL5244N) by the order of Madras High Court dated 26.04.2013 w.e.f. 01.04.2012. 3. But the fact is that amalgamation was w.e.f 01.04.2012 whereas the assessment for which the appeal is pending is for the A.Y 2009-10, i.e) for the period from 01.04.2008 to 31.03.2009. Hence the assessment order for the A.Y 2009-10 is a valid one. Also, it is to be noted that the assessee had filed ITRs for AYs 2009-10, 2010-11 in the namejofReiter LMW MachineiryTtd and for AYs 2011-12 and 2012-13 in the name of LMW Machinery Ltd and with the same PAN (AABCR0309M) for all the four AYs [Acknowledgments attached as annexures I- (i) to (iv)]. Moreover, it is seen that the Hon'ble High Court had approved the scheme of amalgamation w.e.f 01.04.2012 in its order dated 26.04.2013. Effectively the amalgamation was therefore, applicable only from A.Y 2013-14. 4. The assessee in its additional grounds of appeal no.2 states that, "The learned DRP, ought to have quashed the draft order of the TPO, as the Company stood dissolved with effect from 01.04.2012 as per the order of the Hon 'ble High Court of Madras dated 26 th day of April 2013, a copy of which position was brought to the notice of the DRP, in the facts and circumstances of the case and in law. " - 3 - MA No.58/Chny/2022 However, it is to be noted that the TPO passed the order u/s 92CA of the Act on 28.01.2013 and the scheme of amalgamation was approved by Madras High Court vide order dated 26.04.2013 only. Hence there is no question of DRP quashing the order of TPO. Even the draft assessment order was passed by the Assessing Officer on 08.02.2013, which was before the order of Hon'ble Madras High Court. Hence, the additional ground no.2 raised by the assessee is completely illogical and lacks merit. Also, it is to be noted that the assessee did not raise this issue as a ground of appeal before DRP. Vide para no.5 of the order, the Hon'ble IT AT has held that this issue was contested by the assessee before DRP by filing a letter dated 22.07,2013 before completion of adjudicating proceedings by the DRP. However, the assessee filed only an adjournment letter (Attached as annexure-II ) and no GOA raised before DRP for adjudication. 5. In para 9 of the order, the Hon'ble ITAT has quoted the decision of Hon'ble Supreme Court in the case of PCIT vs. Maruti Suzuki Ltd, as follows: "We noted that the assessment order was passed by ACIT, Company Circle-4(2), Coimbatore u/s 143(3) r.w.s 144C of the Act, dated 16.01.2014 is the base order which was passed on non- existent company, the subsequent proceedings all will not survive in view of the decision of Hon'ble Supreme Court in the case of PCIT vs. Maruti Suzuki Ltd, 416 ITR 63. The Hon'ble Supreme Court held that "notice u/s 143(2) under which jurisdiction was assumed by the Assessing Officer was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B. " 5.1. This is factually incorrect, because in the case of Maruti Suzuki India Ltd (MSIL) a scheme of amalgamation was approved by High Court w.e.f 01.04.2012 in its order dated 29.1.2013. This was informed by the company to the A.O on 02.04.2013. The case was selected for scrutiny u/s 143(2) of the IT Act dated 26.09.2013 and the notice was issued after amalgamation. Actually, the primary issue in the case of MSIL is not that the final assessment order was passed in the name of transferor company, i.e) M/s Suzuki Power Train India Limited (SPIL). 5.2. In fact the assessment order contained both the names as, "M/s Suzuki Power Train India Limited (amalgamated with Maruti Suzuki India Ltd)". It is the issue of notice u/s 143(2), i.e) assuming jurisdiction over a case was under contest. In fact, when the notice u/s 143(2) was issued by the AO in the name of SPIL, the ARs of the MSIL mentioned about the amalgamation in the adjournment letter submitted. Thereafter, the notices sent u/s 142(1), draft assessment order, directions of DRP u/s 144C and final assessment order contained the name as "Suzuki Powertrain India Limited (amalgamated with Maruti Suzuki India Limited)". The assessing officer assumes jurisdiction to make an assessment in pursuance of the notice under Section 143(2). The notice was issued in the name of the - 4 - MA No.58/Chny/2022 amalgamating company in spite of the fact that on 2 April 2013, the amalgamated company MSIL had addressed a communication to the assessing officer intimating the 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. This is the stand of Hon'ble SC in the case of Maruti Suzuki India Limited vs. CIT. 5.3. But in the present case the amalgamation was pronounced on 26.4.2013 w.e.f 01.04.2012, and the notice u/s 143(2) of the Act, which allows the AO to assume jurisdiction over the case was issued on 26.08.2010. Hence the facts of this case are very much distinguishable from the facts of Maruti Suzuki India Pvt Ltd case. 6. In the case of Maruti Suzuki India Limited, the Hon'ble SC has heavily relied on the case of Spice Entertainment Ltd. v Commissioner of Service Tax. The observations of Hon'ble SC are as follows: "20 In Spice Entertainment, a Division Bench of the Delhi High Court dealt with the question as to whether an assessment in the name 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 assessment in the name of a non-existent company which renders it void. This, in the view of the High Court, was not merely a procedural defect. Moreover, the participation by the amalgamated company would have no effect since there could be no estoppel against law: "11. After the sanction of the scheme on llth April, 2004, the Spice ceases to exits 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 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 an 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 effect as there is no estoppel against law. 12. Once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act. ------------------- 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 - 5 - MA No.58/Chny/2022 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 Leave Petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment. " 6.1. Hence, it is very clear that the assumption of jurisdiction is the crucial issue upon which the decision of Hon'ble SC was made in the case of PCIT vs Maruti Suzuki Ltd. However, in the case of the assessee, when the notice u/s 143(2) was issued amalgamation has not came into effect. Hence no parallels can be drawn with the case of PCIT vs Maruti Suzuki Ltd. 7. Stand of Hon'ble SC in the case of Skylight Hospitality LLP: 7.1. The Hon'ble Apex Court takes the following stand on the two judge bench in the decision of Skylight Hospitality LLP in the same Maruti Suzuki Ltd case is as follows: "27. The submission however which has been urged on behalf of the Revenue is that a contrary position emerges from the decision of the Delhi High Court in Skylight Hospitality LLP which was affirmed on 6 April 2018 by a two judge Bench of this Court consisting of Hon 'ble Mr Justice A K Sikri and Hon 'ble Mr Justice Ashok Bhushan. In assessing the merits of the above submission, it is necessary to extract the order dated 6 April 2018 of this Court: "In the peculiar facts of this case, we are convinced that wrong name given in the notice was merely a clerical error which could be corrected under Section 292B of the Income Tax Act. The special leave petition is dismissed. Pending applications stand disposed of." Now, it is evident from the above extract that it was in the peculiar facts of the case that this Court indicated its agreement that the wrong name given in the notice was merely a clerical error, capable of being corrected under Section 292B. The "peculiar facts" of Skylight Hospitality emerge from the decision of the Delhi High Court. Skylight Hospitality, an LLP, had taken over on 13 May 2016 and acquired the rights and liabilities of Skylight Hospitality Pvt. Ltd upon conversion under the Limited Liability Partnership Act. It instituted writ proceedings for challenging a notice under Sections 147/148 of the Act 1961 dated 30 March 2017 for AY 2010-2011. The "reasons to believe" made a reference to a tax evasion report received from the investigation unit of the income tax department. The facts were ascertained by the investigation unit. The reasons to - 6 - MA No.58/Chny/2022 believe referred to the assessment order for AY 2013-2014 and the findings recorded in it. Though the notice under Sections 147/148 was issued in the name of Skylight Hospitality Pvt. Ltd. (which had ceased to exist upon conversion into an LLP), there was, as the Delhi High Court held "substantial and affirmative material and evidence on record" to show that the issuance of the notice in the name of the dissolved company was a mistake. The tax evasion report adverted to the conversion of the private limited company into an LLP. Moreover, the reasons to believe recorded by the assessing officer adverted to the approval of the Principal Commissioner. The PAN number of the LLP was also mentioned in some of the documents. The notice under Sections 147/148 was not in conformity with the reasons to believe and the approval of the Principal Commissioner. It was in this background that the Delhi High Court held that the case fell within the purview of Section 292B for the folio-wing reasons: "18...There was no doubt and debate that the notice was meant for the petitioner and no one else. Legal error and mistake was made in addressing the notice. Noticeably, the appellant having received the said notice, had filed without prejudice reply/letter dated 11.04.2017. They had objected to the notice being issued in the name of the Company, which had ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s. Skylight Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused." "31 Mr Zoheb Hossain, learned Counsel appearing on behalf of the Revenue urged during the course of his submissions that the notice that was in issue in Skylight Hospitality Pvt. Ltd. was under Sections 147 and 148. Hence, he urged that despite the fact that the notice is of a jurisdictional nature for reopening an assessment, this Court did not find any infirmity in the decision of the Delhi High Court holding that the issuance of a notice to an erstwhile private limited company which had since been dissolved was only a mistake curable under Section 292B. A close reading of the order of this Court dated 6 April 2018, however indicates that what weighed in the dismissal of the Special Leave Petition were the peculiar facts of the case. Those facts have been noted above. What had weighed with the Delhi High Court was that though the notice to reopen had been issued in the name of the erstwhile entity, all the material on record including the tax evasion report suggested that there was no manner of doubt that the notice was always intended to be issued to the successor entity. Hence, while dismissing the Special Leave Petition this Court observed that it was the peculiar facts of the case which led the court to accept the finding that the wrong name given in the notice was merely a technical error which could be corrected under Section 292B. Thus, there is no conflict between the decisions in Spice Enfotainment on the one hand and Skylight Hospitality LLP on the other hand. It is of relevance to refer to Section 292B of the Income Tax Act which reads as follows: - 7 - MA No.58/Chny/2022 "292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act." In this case, the notice under Section 143(2) under which jurisdiction was assumed by the assessing officer -was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B. " 7.2. Hence, it is abundantly clear that the assumption of jurisdiction is the major issue in Maruti Suzuki Ltd case, which made the Apex Court to rule in favour of the assessee, though in the case of Skylight Hospitality LLP, it has taken a view that issue of notice u/s 148 in the non-existing company name was valid. But in the present case of the assessee, the notice u/s 143(2) was correctly issued to the company, M/s Reiter LMW Machinery Ltd which was existing as on 26.08.2010. 8. In para 7 of the Hon'ble ITAT order, it is stated as below: "In view of the above facts, the Ld. Counsel for the assessee stated that the assessment made on non-existent company, even after the fact of amalgamation of that company was brought to the notice of DRP as well as the AO in the course of adjudicating proceedings vide letter dated 22.07.2013, the assessment made is bad in law and invalid. It was contented by Id. Counsel for the assessee that even the provisions of section 292B of the act does not help the revenue and for this, the Id. Counsel for the assessee relied on the decision of Hon 'ble Supreme court in the case of PCIT vs Maruti Suzuki India Limited, 416 ITR 613. The Id. Counsel for the assessee also relied on the decision of Hon'ble high Court of Madras in the case of CIT vs. Gitsons Engineering Co., (2015) 370 ITR 87 and the decision of Hon'ble High Court of Delhi in the case of CIT vs. Micro India (P) Ltd, (2015) 231 Taxman 809 (Delhi)." 8.1. In the case of CITvs Micra India Pvt Ltd, the notice u/s 153C was issued for the AYs 2003-04 to 2008-09 on 08.09.2010, while the company got amalgamated with M/s Dynamic Buildmart (P) Ltd by the order of Delhi High Court dated 22.12.2009 w.e.f. 01.04.2008. Even this fact of amalgamation was communicated to the revenue on 06.04.2010, i.e. before the issue of notice u/s 153C. But in the case of the assessee, no amalgamation happened at the time of issuance of notice u/s 143(2). Hence the facts are not similar. - 8 - MA No.58/Chny/2022 8.2. In the case of CIT vs. Gitsons Engineering Co., (2015) 370 ITR 87, the Hon'ble Madras High Court has held that the objection in relation to wrong service of notice contemplated u/s 143(2) of the Act could be taken before ITAT. But in the case of the assessee, the notice u/s 143(2) has been rightly issued on Reiter LMW Machinery Ltd since, as on 26.08.2010, the company was existing in the very same name. Hence the case laws quoted by the assessee have no relevance to the facts of the assessee's case. 9. Regarding the applicability of the provisions of section 170 of the Act, the Hon'ble ITAT in para 9 of its order has again quoted Maruti Suzuki India Pvt Ltd case as follows: "The Hon 'ble Supreme Court has also considered the provision of section 170 of the Act and stated that "it is necessary to advert to the provisions of section 170 which deal with succession to business otherwise than on death". The Hon'ble Supreme Court considered this issue as under:- "In this case, the notice u/s 143(2) under which jurisdiction was assumed by the Assessing Officer was issued to a non- existing company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B. In this context, it is necessary to advert to the provisions of section 170 which deal with succession to business otherwise than on death. Section 170 provides as follows". 9.1. But in the case of the assessee, the notice u/s 143(2) served was very much valid, since the assessee company was active in the name and style of M/s Reiter LMW Machinery Ltd during the FY2008-09 relevant to the AY. 2009-10 unlike Maruti Suzuki India Pvt Ltd which stood dissolved at the time of issuing notice u/s 143(2). Hence the provisions of section 170 are very much applicable to the present case of the assessee. The section 170 (1) of the Act is as follows: “170. (1) Where a person carrying on any business or profession (such person succeeded therein by any other person (hereinafter in this section referred to as the successor) who continues to carry on that business or profession, - 6. The predecessor shall be assessed in respect of the income of the previous year in which the succession took place up to the date of succession: 7. The successor shall be assessed in respect of the income of the previous year after the date of succession." - 9 - MA No.58/Chny/2022 9.2. In the case of the assessee, the assessment that had been done in the hands of the predecessor, i.e) M/s Reiter LMW Machinery Ltd for AY2009-10 is very much valid. Hence the facts of Maruti Suzuki India Pvt Ltd are not identical to the case of the assessee and the inference drawn in the matter of applicability of section 170 is also not relevant to this case. 10. The decision of the Hon'ble High Court of Kolkata in the case of M/s Shaw Wallace Distilleries Ltd in (2016) 70 taxmann.com 381 (Calcutta) is squarely applicable in this case. In the case of M/s Shaw Wallace Distilleries Ltd the Kolkata High Court held that, "On plain reading of the definition of the expression of "amalgamation" appearing in section 2(IB), the impression which one receives is that all the liabilities of the amalgamating company immediately before the amalgamation become the liability of the amalgamated company. This case is concerned, with the assessment year 2002-03, i.e to say pertaining to the financial year which ended on 31.03.2002, whereas the amalgamation took place with effect from November 2002. There is, as such, no dispute on fact that it was a liability of the amalgamating company which accrued prior to the amalgamation." 10.1. The above mentioned facts are exactly similar to the case of LMW machinery Limited also where the amalgamation was w.e.f 01.04.2012 and the appeal is for the A.Y 2009-10. 11. In the recent judgment of Hon'ble Supreme court in SLP No 4063 of 2020 in the case of PCIT (Central) -2 vs M/s Mahagun Realtors (P) Ltd, the apex court has clearly brought out the factual differences which distinguish that case from that of Maruti Suzuki Ltd. The decision says that, "30. The combined effect, therefore, of Section 394 (2) of the Companies Act, 1956, Section 2 (IA) and various other provisions of the Income Tax Act, is that despite amalgamation, the business, enterprise and undertaking of the transferee or amalgamated company- which ceases to exist, after amalgamation, is treated as a continuing one, and any benefits, by way of carry forward of losses (of the transferor company), depreciation, etc., are allowed to the transferee. Therefore, unlike a winding up, there is no end to the enterprise, with the entity. The enterprise in the case of amalgamation, continues. 31. In Maruti Suzuki (supra), the scheme of amalgamation was approved on 29.01.2013 w.e.f. 01.04.2012, the same was intimated to the AO on 02.04.2013, and the notice under Section 143(2) for AY 2012-13 was issued to amalgamating company on 26.09.2013. This court in facts and circumstances observed the following: "35. In this case, the notice under Section 143(2) under which jurisdiction was assumed by the assessing officer was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B. - 10 - MA No.58/Chny/2022 39. 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 Entertainment on 2 November 2017. The decision in Spice Entertainment has been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Entertainment. 40. We find no reason to take a different view. There is a value which the court must abide by in promoting the interest of certainty in tax litigation. 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 doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable." 32. The court, undoubtedly noticed Saraswati Syndicate. Further, the judgment in Spice (supra) and other line of decisions, culminating in this court's order, approving those judgments, was also noticed. Yet, the legislative change, by way of introduction of Section 2(1A), defining “amalgamation” was not taken into account. Further, the tax treatment in the various provisions of the Act were not brought to the notice of this court, in the previous decisions. 11.1. In this case law, the Supreme Court has categorically brought out the facts that are distinctive from Maruti Suzuki Ltd. In the same way, the facts of the assessee's case are different from that of Maruti Suzuki Ltd in the following manner: Particulars Facts of Maruti Suzuki Ltd case Facts of the present case of the assessee Period under consideration FY 201 1-12 FY 2008-09 Approval date of scheme of amalgamation 29.01.2013 26.04.2013 Amalgamation w.e.f. 01.04.2012 01.04.2012 Notice u/s 143(2) issued on 26.09.2013 26.08.2010 - 11 - MA No.58/Chny/2022 Name of the transferor company as on date of issue of notice u/s 143(2) M/s Suzuki Power Train India Limited Reiter LMW Machinery Ltd Whether the transferor company existed as on date of issue of notice u/s 143(2) No Yes. Name of the company in which order was passed u/s 143(3) M/s Suzuki Power Train India Limited (amalgamated with MSIL) Reiter LMW Machinery Ltd Whether the transferor company existed as on date of issue of order u/s 143(3) No Yes Whether the provisions of section 170 of the IT Act applicable No Yes 11.2. Also, the Hon'ble SC has mentioned in the case of PCIT (Central) - 2 vs M/s Mahagun Realtors (P) Ltd&s follows: 36. The judgments of this court- in Saraswati Syndicate and Marshall (supra) have indicated that the rights and liabilities of the transferor and transferee companies are determined by the terms of the merger. In Saraswati Syndicate, the point further made is that the corporate existence of the transferor ceases, upon amalgamation. -------------- 42. Before concluding, this Court notes and holds that whether corporate death of an entity upon amalgamation per se invalidates an assessment order ordinarily cannot be determined on a bare application of Section 481 of the Companies Act, 1956 (and its equivalent in the 2013 Act), but would depend on the terms of the amalgamation and the facts of each case. 11.3 However, in the present case, the copy of the Madras High Court order approving the scheme of amalgamation has been submitted by the assessee neither before DRP nor before the AO during the proceedings. Only in the adjournment letter filed before the DRP the assessee has mentioned about the amalgamation. Hence, the terms of amalgamation were not disclosed to the DRP and AO by the assessee. 12. Hence, in the light of above discussed facts and circumstances, it is prayed that the Miscellaneous Application for the assessment year 2009- 10 may kindly be considered on its merits by the Hon'ble ITAT” - 12 - MA No.58/Chny/2022 2. We have heard rival contentions and gone through arguments made by ld.CIT-DR, Dr.S. Palanisamy as well as gone through the miscellaneous petition filed by the Revenue. We noted that only grievance of the Revenue is that the amalgamation in this case was w.e.f. 01.04.2012, whereas the assessment year involved is AY 2009-10. The Revenue’s another contention is that as per amalgamation order passed by Hon’ble Madras High Court approving the scheme of amalgamation w.e.f. 01.04.2012 vide its order dated 26.04.2013. According to ld.CIT-DR, the order of TPO u/s.92CA of the Income Tax Act, 1961 (hereinafter the ‘Act’) was passed only on 28.01.2013 and hence, the order of TPO is valid order. He tried to distinguish the facts from the case law of Hon’ble Supreme Court in the case of Maruti Suzuki India Ltd., [2019] 416 ITR 613 as well as the Hon’ble Delhi High Court in the case of CIT vs. Spice Enfotainment Ltd., in Civil Appeal No.285 of 2014 order dated 02.11.2017, which was affirmed by Hon’ble Supreme Court. 3. The entire premise of ld.CIT-DR is that the assessment year involved is prior to assessment year 2009-10, prior to date of amalgamation i.e., 01.04.2012 and the order of Hon’ble Madras High Court approving the scheme of amalgamation is dated 26.04.2013. - 13 - MA No.58/Chny/2022 4. We have heard rival contentions and gone through facts and circumstances of the case. We noted that Hon’ble Supreme Court in the case of Maruti Suzuki India Ltd., supra, has considered identical issue in para 20 as under:- 20 In Spice Entertainment, a Division Bench of the Delhi High Court dealt with the question as to whether an assessment in the name 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 assessment in the name of a non-existent company which renders it void. This, in the view of the High Court, was not merely a procedural defect. Moreover, the participation by the amalgamated company would have no effect since there could be no 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 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 an 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 effect as there is no estoppel against law. 12. Once it is found that assessment is framed in the name of non- existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act.” - 14 - MA No.58/Chny/2022 Further, Hon’ble Supreme Court finally held that despite the fact the AO was informed of the amalgamating company having ceased to exist as a result of approved scheme of amalgamation, the jurisdictional notice was issued only in its name. It was further held that basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity once ceased to exist upon the approved scheme of amalgamation, participation in the proceedings by the assessee in the circumstances cannot operate as an estoppel against law. The Hon’ble Supreme Court has considered the decision of Hon’ble Delhi High Court in the case of Spice Enfotainment Ltd., supra wherein on exactly identical facts, Hon’ble Delhi High Court considered the facts in para 11 and held 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 Leave Petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment. 34 We find no reason to take a different view. There is a value which the court must abide by in promoting the interest of certainty in tax litigation. - 15 - MA No.58/Chny/2022 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 doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable. In view of the above legal position, we find no mistake apparent from record in the order of the Tribunal and we find no merit in the miscellaneous petition filed by the Revenue and hence, the same is dismissed. 5. In the result, the miscellaneous petition filed by the Revenue is dismissed. Order pronounced in the Open Court on 19 th August, 2022. Sd/- Sd/- (मनोज क ु मार अĒवाल) (Manoj Kumar Aggarwal) लेखा सदèय /Accountant Member (महावीर ͧसंह) (Mahavir Singh) उपाȯƗ / Vice President चेÛनई/Chennai, Ǒदनांक/Dated: 19 th August, 2022. RSR/- आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy to: 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आय ु Èत (अपील)/CIT(A) 4. आयकर आय ु Èत/CIT 5. ͪवभागीय ĤǓतǓनͬध/DR 6. गाड[ फाईल/GF
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