Invalid Assessment Order Void after Merger: Jurisdiction Issue Resolved

The Tribunal found that the assessment order passed against the non-existent entity, PAN Financial Shared Services India P Ltd., after its merger with Infosys BPO Limited, was void ab initio. Additionally, the Tribunal ruled that the AO in Chennai lacked jurisdiction to issue the assessment order post-merger, as jurisdiction should have transferred to the AO in Bangalore. Consequently, the Tribunal annulled the assessment order, ruling in favor of the assessee.

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Issues Involved:
1. Validity of the assessment order passed by the AO on the ground that the assessee ceased to exist due to merger.
2. Jurisdiction of the AO in passing the assessment order against a merged entity.

Issue-Wise Detailed Analysis:

1. Validity of the Assessment Order Passed by the AO on the Ground that the Assessee Ceased to Exist Due to Merger

The primary contention raised by the assessee was that the assessment order dated 27.09.2010 was invalid as it was passed in the name of PAN Financial Shared Services India P Ltd., which had ceased to exist following its merger with Infosys BPO Limited. The merger was approved by the High Courts of Madras and Karnataka, effective from April 1, 2008, thereby dissolving PAN Financial Shared Services India P Ltd. without being wound up. The assessee argued that the assessment order passed against a non-existent entity was null and void.

The CIT(A) dismissed this contention, stating that the AO was not informed about the merger until after the assessment order was passed. The CIT(A) noted that the assessee had only informed the CIT, Circle VI, Chennai, about the merger, which was not equivalent to informing the AO directly. The CIT(A) concluded that since the AO was not aware of the merger, the order was valid.

However, the Tribunal referred to the Supreme Court's decision in PCIT Vs. Maruti Suzuki India Ltd., where it was held that an assessment order passed against a non-existent entity due to amalgamation is void ab initio. The Tribunal also cited the Delhi High Court's decision in Savita Kapila Vs. ACIT, which reinforced that there is no statutory obligation on the part of the assessee to inform the AO about the merger. The Tribunal concluded that the assessment order passed in the name of a non-existent entity was null in the eyes of law and annulled it.

2. Jurisdiction of the AO in Passing the Assessment Order Against a Merged Entity

The second issue revolved around the jurisdiction of the AO in Chennai to pass an assessment order against PAN Financial Shared Services India P Ltd. after its merger with Infosys BPO Limited, whose registered office was in Bangalore. The assessee argued that the jurisdiction should have been transferred to the AO in Bangalore following the merger, and the assessment order passed by the AO in Chennai was without jurisdiction and therefore invalid.

The Tribunal supported this view by referring to its own decision in ACIT v iGate Infrastructure Management Services Ltd., where it was held that an assessment order passed by the Income Tax authorities in Delhi after the company's registered office had moved to Bangalore was without jurisdiction and bad in law. The Tribunal concluded that the assessment order passed by the AO in Chennai was without jurisdiction and annulled it.

Conclusion:
The Tribunal held that the assessment order passed in the name of a non-existent entity, PAN Financial Shared Services India P Ltd., after its merger with Infosys BPO Limited, was ab initio void and null in the eyes of law. It also concluded that the AO in Chennai lacked jurisdiction to pass the assessment order after the merger, as the jurisdiction should have been transferred to the AO in Bangalore. Consequently, the Tribunal annulled the assessment order and allowed the appeal in favor of the assessee.

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