Order in Name of Non-Existent Entity Invalid: Jurisdictional Defect

The Appellate Tribunal held that passing an order in the name of a non-existent entity constitutes a jurisdictional defect, rendering the order invalid. The Tribunal emphasized that such a defect cannot be cured by procedural provisions and must be considered void ab initio. The decision was made in line with legal precedents and the specific provisions of the Income Tax Act, leading to the allowance of the assessee's appeal.

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Issues:
1. Jurisdictional defect in passing order in the name of a non-existent entity.

Analysis:
The appeal before the Appellate Tribunal arose from an Order passed by the CIT Kolkata against the order of assessment framed by the AO. The primary issue raised by the assessee was regarding the fact that the order passed by the CIT was in the name of a company that no longer existed. The company in question had merged with another entity, as per the order of the Calcutta High Court. The assessee contended that the order passed on the non-existent entity was not valid. The Tribunal noted that the merged company had lost its identity and existence post-merger, and the CIT should have issued a fresh show cause notice in the name of the surviving entity. The Tribunal held that the provisions of section 292BB of the Income Tax Act, which were cited by the Revenue, could not be applied in this case as they pertain to assessment or reassessment proceedings, not revisional proceedings under section 263 of the Act.

The Tribunal referred to legal precedents, including decisions by the Delhi High Court and the Karnataka High Court, which emphasized that passing an order against a non-existing entity constitutes a jurisdictional defect, not a procedural irregularity. It was highlighted that such a defect cannot be cured by invoking provisions like section 292BB. The Tribunal also cited a decision by a Co-ordinate Bench of the Bangalore Tribunal, which clarified that section 292BB only pertains to the service of notice and does not cover the failure to issue notice within the prescribed time limit. Consequently, the Tribunal held that the order passed in the name of the non-existent entity was invalid and should be quashed as void ab initio. As a result, the Tribunal allowed the appeal of the assessee without delving into other grounds or the merits of the issue.

In conclusion, the Appellate Tribunal held that passing an order in the name of a non-existent entity constitutes a jurisdictional defect, rendering the order invalid. The Tribunal emphasized that such a defect cannot be cured by procedural provisions and must be considered void ab initio. The decision was made in line with legal precedents and the specific provisions of the Income Tax Act, leading to the allowance of the assessee's appeal.

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