2014 (1) TMI 1894 - AT - Income Tax

ITAT Kolkata: Dissolved Entity Assessments Quashed

The Appellate Tribunal ITAT Kolkata ruled in favor of the assessee, quashing the revision proceeding initiated by CIT-IV, Kolkata on a non-existent ... Revision u/s 263 passed on a non-existent company - scheme of amalagamtion initiated - assessee stated that no company in the name of Aarcee Holding Pvt. Ltd. was in existence as on the date of show cause notice dated 23.12.2010 initiating revision proceeding u/s. 263 - HELD THAT:- Assessee before us filed copy of the decision of Hon’ble Delhi High Court in the case of Spice Infotainment Ltd. Vs. CIT [2011 (8) TMI 544 - DELHI HIGH COURT] wherein it is held that assessment in the name of the company which has been amalgamated with another company and stands dissolved is null and void; assessment framed in the name of a non-existing entity is a jurisdictional defect and not merely a procedural irregularity of the nature which can be cured by invoking the provisions of s. 292B. In the present case also the amalgamation took place vide the order of Hon’ble Calcutta High Court dated 17.04.2008 w.e.f. 01.04.2007 and this Company Aarcee Holding Pvt. Ltd. has amalgamated with Padmavati Properties & Trust Ltd. and no revision order can be passed on a non-existent company. Hence, the very premise of the revenue that revision order passed on a non-existent company does not stand. Moreover, the issue is also covered by the decision of Hon’ble Calcutta High Court in the case of I. K. Agencies P. Ltd. Vs. CIT [2011 (3) TMI 690 - CALCUTTA HIGH COURT]. As the issue is squarely covered, we quash the revision proceeding, which is null and void and the appeal of assessee is allowed. Issues involved:1. Jurisdictional issue regarding the revision order passed by CIT-IV, Kolkata under section 263 of the Income-tax Act, 1961 on a non-existent company.Analysis:The appeal before the Appellate Tribunal ITAT Kolkata arose from the revision order of CIT-IV, Kolkata, concerning an assessment framed by DCIT, Circle-12, Kolkata under section 143(3) of the Income-tax Act, 1961 for Assessment Year 2006-07. The primary issue raised by the assessee was the validity of the revision order passed by CIT-IV, Kolkata under section 263 of the Act on a company that was non-existent. The company in question, Aarcee Holdings Pvt. Ltd., had been amalgamated with Padmavati Properties & Trust Ltd. as per the order of the Hon'ble Kolkata High Court, effective from 1.4.2007. The assessee contended that all actions concerning the amalgamated company should be in the name of the amalgamating company. The assessee argued that the CIT was wrong in issuing the show-cause notice under section 263 in the name of a non-existent entity, despite being informed of the amalgamation. The Tribunal considered the facts and circumstances, including the amalgamation order and relevant correspondence, to determine the validity of the revision order.The original assessment was made in the name of Aarcee Holdings Pvt. Ltd., which was later amalgamated with Padmavati Properties & Trust Ltd. The assessee provided documentation, including the High Court order of amalgamation, to both the CIT-IV, Kolkata, and the Assessing Officer (AO). The assessee raised objections to the CIT regarding the show-cause notice issued in the name of the non-existent company. The Tribunal noted that the company ceased to exist post-amalgamation and cited a Delhi High Court decision stating that assessments in the name of dissolved entities are null and void. The Tribunal also referred to a Calcutta High Court decision supporting the quashing of revision proceedings on non-existent companies. Consequently, the Tribunal found the revision order to be null and void, ultimately allowing the appeal of the assessee.In conclusion, the Appellate Tribunal ITAT Kolkata ruled in favor of the assessee, quashing the revision proceeding initiated by CIT-IV, Kolkata on a non-existent company post-amalgamation. The Tribunal emphasized that assessments on dissolved entities are jurisdictional defects and cannot be cured by procedural provisions. The decision was based on legal precedents and the specific circumstances of the case, leading to the allowance of the assessee's appeal.