Tribunal orders case review for merger letter, assess nullity. Grounds addressed for statistical purposes.

The Tribunal ordered the case to be sent back to the CIT(A) for verification of the letter dated 22/09/2014 regarding the merger and to make a decision on the nullity of the assessment. The additional ground was permitted for statistical purposes, and other grounds of appeal were not addressed. The appeals were allowed for statistical purposes, with the decision announced on 16th November 2018.

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Issues Involved:
1. Disallowance of legal and professional charges.
2. Non-allowance of depreciation and deduction under Section 35D.
3. Deletion of various expenses by CIT(A) despite no business activity.
4. Deletion of CSR expenses by CIT(A).
5. Validity of assessment on a non-existent entity due to amalgamation.

Detailed Analysis:

1. Disallowance of Legal and Professional Charges:
The assessee contested the upholding of disallowance of Rs. 30,62,470/- out of legal and professional charges by the CIT(A) on the grounds of insufficient justification. The Tribunal did not adjudicate this issue at this stage as the additional ground regarding the validity of the assessment on a non-existent entity was considered paramount and restored to the CIT(A) for verification.

2. Non-Allowance of Depreciation and Deduction under Section 35D:
The assessee also challenged the non-allowance of Rs. 1,61,419/- in respect of depreciation claimed as per income-tax rules and deduction under Section 35D. Similar to the first issue, this was not adjudicated at this stage due to the precedence of the additional ground regarding the validity of the assessment.

3. Deletion of Various Expenses by CIT(A) Despite No Business Activity:
The Revenue appealed against the deletion of Rs. 16,14,675/- for expenses related to payments to auditors, sitting fees, security of premises, and directors' traveling expenses by the CIT(A), arguing that no business activity was carried out by the assessee company, and thus, the expenses were not attributable. This issue was also not adjudicated at this stage due to the precedence of the additional ground.

4. Deletion of CSR Expenses by CIT(A):
The Revenue contended the deletion of Rs. 9,49,969/- regarding CSR expenses by the CIT(A), arguing that CSR is a charge on profits rather than on revenue. This issue was similarly not adjudicated at this stage.

5. Validity of Assessment on a Non-Existent Entity:
The primary issue addressed was whether the assessment could be made on a non-existent entity due to the amalgamation of the assessee company (Dalmia Cement Ventures Limited) with Dalmia Cement (Bharat) Limited. The Tribunal noted that the assessment was made on 13/02/2015, after the amalgamation effective from 01/04/2012, and the assessee had informed the Assessing Officer about the merger on 22/09/2014. Citing the Supreme Court's decision in CIT Vs. Spice Infotainment Ltd., the Tribunal held that an assessment on a non-existent entity is void ab initio and not a procedural irregularity that could be cured under Section 292B of the Act.

However, the Tribunal found that verification was needed to confirm whether the letter informing the Assessing Officer of the merger was indeed filed during the assessment proceedings. The case was restored to the CIT(A) for verification of this fact and a subsequent decision on the nullity of the assessment.

Conclusion:
The Tribunal restored the matter to the CIT(A) for verification of the letter dated 22/09/2014 regarding the merger and to pass an order on the issue of nullity of the assessment. The additional ground was allowed for statistical purposes, and other grounds of the appeal by both the assessee and the Revenue were not adjudicated at this stage. The appeals were allowed for statistical purposes, and the decision was pronounced in the Open Court on 16th November 2018.

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