SHRI RAM MULTICOM PVT. LTD.,KOLKATA V. A.C.I.T., CC - 3(4), , KOLKATA

ITA 501/KOL/2025

AI Insights

The case involves Shri Ram Multicom Private Limited appealing against an assessment order passed by the Assistant Commissioner of Income Tax, which was affirmed by the CIT (A). The primary contention was that the assessment was conducted under section 144 of the Income Tax Act without proper jurisdiction, as the assessee had merged with another company and ceased to exist as a separate entity. The Tribunal examined the merger details and the continuity of the assessee's legal existence post-merger, ultimately deciding in favor of the assessee by quashing the assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 706901 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Appeal Filed On: 10-03-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.B. CHAKRABORTHY
• Assessee Lawyers: SOUMITRA CHOUDHURY; NIRAV SHETH; ARS
• Section: 144; 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 501/KOL/2025 (Assessment Year:2017-18) Shri Ram Multicom Private Limited Ideal Centre, Unit No.3, 3 rd Floor, 9 A.J.C. Bose Road Kolkata-700017, West Bengal Vs. Asst. Commissioner of Income Tax, Central Circle 3(4) Aaykar Bhavan, 110, Shantipally, E.M. Bypass, Kolkata-700107, West Bengal (Appellant) (Respondent) PAN No. AAECS5277N Assessee by : Shri Soumitra Choudhury & Shri Nirav Sheth, ARs Revenue by : Shri S.B. Chakraborthy, DR Date of hearing: 20.05.2025 Date of pronouncement : 10.07.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 09.01.2025 for the AY 2017-18. 02. The issue raised in first ground of appeal is against the assessment framed by the ACIT Circle 3(4), Kolkata u/s 144 of the Act dated 31.12.2019, without having jurisdiction over the assessee although, the assessee firm merged with Ram Multicom Pvt. Ltd. (PAN No. AAECS5277N) by an agreement dated 01.04.2008 and therefore, the assessment passed is invalid and nullity. Page | 2 ITA No. 501/KOL/2025 Shri Ram Multicom Private Limited; A.Y. 2017-18 03. The facts in brief are that the assessee was a partnership firm having PAN No. AAVFS8066R under jurisdiction of DCIT Circle 3(4), Kolkata vide agreement dated 01.04.2008. The said firm was taken over as going concern and merged with Shri Ram Multicom Pvt. Ltd. (AAECS5277N) under jurisdiction of the DCIT Circle 7(2), Kolkata. The notice u/s 142(1) of the Act was issued in the name of firm namely Shri Ram distributors which was not served and assessment was accordingly framed u/s 144 of the Act determining the total income at ₹61,33,338/- comprising of ₹15.00 lacs deposited in the bank account of Shri Ram Distributors and ₹61,33,338/- on account of estimated profit at the rate of 10% on all credit entries in the bank account. 04. The ld. CIT (A) affirmed the order of ld. AO without giving any concrete finding on the ground that the PAN of Shri Ram Distributors is still active and therefore the appeal is not maintainable. 05. After hearing the rival contentions and perusing the materials available on record, we find that the assessee firm was merged with Shri Ram Multicom Pvt. Ltd. with effect from 01.04.2008, taking over all the assets and liabilities and thereafter the assessee firm discontinued filing of its return of income as it ceased to exist from that date. We note that the assessee has incorporated all the assets and liabilities in the books of accounts of Shri Ram Multicom Pvt. Ltd. including the bank accounts. The assessee has produced before us ITR-6, filed by the said company and in the details of bank accounts, we observed that the bank account on the basis of which the ld. AO made the addition i.e. Axis bank account no.1720102004947 was appearing in the assets in balance sheet of the said company. Thus, this is abundantly clear that the deposits into the said bank account have been considered in the Page | 3 ITA No. 501/KOL/2025 Shri Ram Multicom Private Limited; A.Y. 2017-18 bank accounts of Shri Ram Multicom Pvt. Ltd. When a query was put to the ld. DR, he candidly and fairly admitted that this was a case of non- filing of ITR return by the erstwhile firm and moreover, the order was passed u/s 144 of the Act and thus, this has happened. Therefore considering the facts on record and the contentions of both the sides , we are inclined to quash the assessment framed by the AO u/s 144 of the Act. 06. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 10.07.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated:10.07.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "