Invalid notice to amalgamating company upheld, AO lacked jurisdiction, appeals dismissed.

The Tribunal upheld the decision that the notice issued to the amalgamating company was invalid, section 292B could not cure the jurisdictional defect, and the AO lacked jurisdiction due to pending proceedings before the Settlement Commission. As a result, both appeals by the revenue were dismissed.

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Issues Involved:
1. Validity of notices issued by AO to reopen the assessment u/s. 148 of the Income-tax Act, 1961.
2. Application of section 292B of the Income-tax Act, 1961.
3. Jurisdiction of AO in light of the proceedings before the Settlement Commission.

Issue-wise Detailed Analysis:

1. Validity of Notices Issued by AO to Reopen the Assessment u/s. 148 of the Income-tax Act, 1961:

The primary issue was whether the notices issued by AO to reopen the assessment u/s. 148 of the Income-tax Act, 1961, were valid. The assessee company, M/s. Mani Square Ltd. (successor to M/s. Nayanmani Properties Pvt. Ltd.), contended that the notice issued to the amalgamating company (M/s. NPPL) was invalid since M/s. NPPL had ceased to exist post-amalgamation on 01.04.2008. The Tribunal noted that the AO issued the notice on 25.03.2013 to M/s. NPPL, which had already been amalgamated. The Tribunal cited the Supreme Court decision in Saraswati Industrial Syndicate Ltd. Vs. CIT (1990) and the Delhi High Court decision in Spice Infotainment Ltd. Vs. CIT (2012), which held that post-amalgamation, the amalgamating company loses its identity and any assessment or notice should be in the name of the amalgamated company. Thus, the Tribunal upheld the CIT(A)'s decision that the notice issued to M/s. NPPL was invalid and the reassessment order passed in consequence was a nullity.

2. Application of Section 292B of the Income-tax Act, 1961:

The revenue argued that section 292B of the Act could cure the defect in the notice. Section 292B states that a notice shall not be invalid merely by reason of any mistake, defect, or omission if it is in substance and effect in conformity with or according to the intent and purpose of the Act. However, the Tribunal clarified that section 292B cannot cure a jurisdictional defect. It cited the Delhi High Court in Spice Infotainment Ltd. Vs. CIT (2012) and the Karnataka High Court in CIT vs Intel Technology India Pvt Ltd (2016), which held that an assessment against a non-existing entity is a jurisdictional defect and not a mere procedural irregularity. Thus, section 292B could not validate the notice issued to M/s. NPPL.

3. Jurisdiction of AO in Light of the Proceedings Before the Settlement Commission:

The Tribunal also addressed whether the AO had jurisdiction to reopen the assessment when the matter was before the Settlement Commission. The assessee had filed a settlement application covering AY 2005-06 to 2012-13 before the Settlement Commission on 14.03.2013, prior to the issuance of the notice u/s. 148 on 25.03.2013. Section 245F(2) confers exclusive jurisdiction to the Settlement Commission once an application is accepted. The Tribunal referred to the Delhi High Court in Omaxe Ltd. vs. ACIT (2012) and the Tribunal's decision in Vivek Nagpal vs. DCIT, which held that once the Settlement Commission takes cognizance of a case, the AO loses jurisdiction over it. The Tribunal found that the issue of undisclosed income was already before the Settlement Commission and thus, the AO lacked jurisdiction to reopen the assessment.

Conclusion:

The Tribunal upheld the CIT(A)'s decision, finding that the notice u/s. 148 issued to the amalgamating company was invalid, section 292B could not cure this jurisdictional defect, and the AO lacked jurisdiction due to the pending proceedings before the Settlement Commission. Consequently, both appeals by the revenue were dismissed.

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