2020 (12) TMI 868 - AT - Income Tax

Tribunal cancels invalid assessments for assessee, citing non-existent entities, leading to favorable outcome

The Tribunal allowed the appeals of the assessee, canceling all five assessment orders passed by the AO under Section 143(3)/153A for the AYs 2011-12, ... Assessment u/s 153A - Assessment in the name of a non-existent entity which had already amalgamated - HELD THAT:- It is observed that a similar issue involving identical and facts and circumstances of the case had come up for consideration before this Tribunal in assessee’s own case passed by this Tribunal [2020 (9) TMI 1094 - ITAT KOLKATA] the assessments made u/s 143(3) / 153A for A.Y. 2013-14 to 2017-18 in the name of M/s. IQ City Infrastructure Pvt. Ltd., a non-existent entity which had already amalgamated into M/s. Mani Square Pvt. Ltd. were held to be invalid. Issues Involved:1. Validity of assessment orders passed under Section 143(3)/153A in the name of non-existent entities.2. Impact of amalgamation on the issuance of notices and assessment orders.3. Jurisdictional defects in the assessment process.Detailed Analysis:1. Validity of Assessment Orders Passed under Section 143(3)/153A in the Name of Non-Existent Entities:The primary issue raised by the assessee was the validity of the assessment orders passed by the Assessing Officer (AO) under Section 143(3)/153A for the assessment years (AY) 2011-12, 2012-13, and 2013-14. The contention was that the orders were issued in the names of M/s. Samudra Vyapaar Pvt. Ltd. and M/s. IQ City Infrastructure Pvt. Ltd., both of which had already merged with M/s. Mani Square Ltd. Consequently, the entities were non-existent at the time the orders were passed, rendering the assessments invalid.2. Impact of Amalgamation on the Issuance of Notices and Assessment Orders:The Tribunal noted that the Hon’ble Calcutta High Court had approved the amalgamation of M/s. Samudra Vyapaar Pvt. Ltd. and M/s. IQ City Infrastructure Pvt. Ltd. with M/s. Mani Square Ltd. effective from 01.04.2013. Despite being informed of the amalgamation, the AO issued notices under Sections 153A and 142(1) in the names of the non-existent entities. The Tribunal emphasized that any notice or order issued in the name of a non-existent entity is ab initio void and bad in law. This principle is supported by judicial precedents, including the Hon’ble Supreme Court's decisions in M/s. Saraswati Industrial Syndicate Vs. CIT and M/s. Spice Infotainment Ltd. Vs. CIT.3. Jurisdictional Defects in the Assessment Process:The Tribunal highlighted that the issuance of mandatory notices under Section 143(2) in the name of non-existent entities was a jurisdictional defect that rendered the subsequent assessment orders void. The Tribunal referenced its earlier decision dated 06.08.2020 in the assessee’s own case, where similar assessments were held invalid due to the issuance of notices in the names of amalgamated entities. The Tribunal reiterated that such jurisdictional defects are incurable and cannot be treated as procedural irregularities.Separate Judgments Delivered:The Tribunal's decision was based on a consolidated order, and no separate judgments by different judges were mentioned.Conclusion:The Tribunal allowed the appeals of the assessee, canceling all five assessment orders passed by the AO under Section 143(3)/153A for the AYs 2011-12, 2012-13, and 2013-14. The Tribunal held that the assessments were invalid as they were made in the names of non-existent entities. Consequently, other issues raised by the assessee became infructuous or academic, and the stay applications were dismissed as infructuous. The order was pronounced in the open court on 16th December 2020.