Court invalidates post-merger assessment, dismissing Revenue's appeal. The Court upheld the ITAT's decision setting aside the CIT (A)'s order, ruling that assessing the Assessee post-merger as a non-existent entity was ...
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The Court upheld the ITAT's decision setting aside the CIT (A)'s order, ruling that assessing the Assessee post-merger as a non-existent entity was invalid. The Court found the assessment against the Assessee after merger to be a non-curable defect, leading to the dismissal of the Revenue's appeal as no substantial question of law arose.
Issues: - Validity of assessment under Section 153C of the Act against a non-existent entity post-merger.
Analysis: 1. The five appeals by the Revenue challenged a common order passed by the Income Tax Appellate Tribunal (ITAT) for different Assessment Years (AYs) regarding a search and seizure operation conducted under Section 132 of the Act.
2. The search operation was carried out in the case of certain individuals and a company, leading to the issuance of a notice under Section 153C of the Act to the Assessee. The Assessing Officer (AO) assessed the income of the Assessee, which was challenged before the Commissioner of Income Tax (Appeals) [CIT (A)].
3. The Assessee argued that due to its amalgamation with another company, the assessment should have been made on the merged entity. The CIT (A) noted discrepancies in the Assessee's response to the notice under Section 153C, leading to the rejection of the Assessee's claim.
4. However, the ITAT accepted the Assessee's contention that framing an assessment against the Assessee based on a notice issued to a non-existent entity post-merger was not valid. The Court referred to a similar case where continuing proceedings against a non-existent entity were quashed.
5. The Court found that the AO's assessment against the Assessee after its merger with another company was a non-curable defect. Consequently, the ITAT's decision to set aside the CIT (A)'s order was upheld, as there was no legal infirmity in the ITAT's decision.
6. The Court concluded that no substantial question of law arose for consideration, leading to the dismissal of the appeal by the Revenue.
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