2023 (11) TMI 24 - AT - Income Tax

Assessment orders passed in name of non-existing amalgamated company are illegal and invalid under sections 92CA(3) and 143C(1)

Aptar Pharma India Pvt. Ltd. (as successor to Aptar Beauty and Home India Pvt. Ltd.) Versus NFAC Delhi

ITAT Mumbai held that assessment orders passed in the name of a non-existing amalgamated company are illegal and invalid. The AO cannot issue transfer ... Assessment order in the name of a non existing company - transfer pricing order u/s. 92CA(3) of the Act and the draft assessment order u/s. 143C(1) after company amalgamated - HELD THAT:- AO cannot pass the assessment order in the name of a non existing company despite the receipt of information of amalgamation from the assessee. The present case in hand pertains to the draft assessment order and the transfer pricing order passed in the name of the amalgamating company, we would like to place our reliance on the decision of FedEx Express Transporation and Supply Chain Services (India) Private Limited [2019 (7) TMI 1554 - ITAT MUMBAI] wherein on identical facts, the Tribunal has held that the transfer pricing order u/s. 92CA(3) of the Act and the draft assessment order u/s. 143C(1) of the Act passed in the name of the amalgamating company which was non existing on the date of the passing of such order was illegal and bad in law and the Tribunal in this case had quashed the entire assessment proceeding to be illegal. Thus assessment order though passed in the name of the amalgamated company is held to be invalid for the reason that the draft assessment order and the transfer pricing order passed by the A.O./TPO was in the name of the non existing company. Decided in favour of assessee. Issues Involved:The issues involved in the judgment are the challenge to the assessment order passed by the Commissioner of Income Tax (Appeals) and the National Faceless Appeal Centre, and the transfer pricing adjustment made by the Assessing Officer/Transfer Pricing Officer.Challenge to Assessment Order:The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) and the National Faceless Appeal Centre pertaining to the Assessment Year 2017-18. The primary ground of challenge was that the draft assessment order and transfer pricing order were passed in the name of a non-existent company, which rendered the final assessment order void-ab-initio.Transfer Pricing Adjustment:The Assessing Officer/Transfer Pricing Officer made a transfer pricing adjustment amounting to Rs. 10,91,50,003 to the arms length price of international transactions entered into by the assessee with its associated enterprise. The assessee challenged this adjustment along with the issue of the assessment order being passed in the name of a non-existent company.Amalgamation and Legal Proceedings:The amalgamation of Aptar Beauty and Home India Pvt. Ltd. with Aptar Pharma India Pvt. Ltd. was approved by the National Company Law Tribunal. Despite the intimation of the merger to the Assessing Officer/Transfer Pricing Officer, the orders were passed in the name of the non-existing company. The legal principle of succession of business and the consequences of passing orders in the name of a non-existing entity were discussed in detail.Judicial Interpretation and Decision:The Tribunal considered the facts and legal precedents cited by both parties. It was observed that passing assessment orders in the name of a non-existing company vitiates the proceedings and renders the assessment order invalid. Citing relevant case laws, including a decision by the Hon'ble Apex Court, the Tribunal held that the assessment order passed in the name of the amalgamated company was invalid due to the initial orders being issued in the name of the non-existent entity. Consequently, the appeal filed by the assessee was allowed.Separate Judgment by Judges:No separate judgment was delivered by the judges in this case.