TaxTMI 
TaxTMI 
2007 (2) TMI 342
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.... "The order needs to be vacated as on the date of passing of order the company was non-existent having merged with Shah Wallace Distilleries Ltd. with effect from 1-7-2000." 3. At the time of hearing before us it is stated by the ld. counsel that the additional ground raised by the assessee is purely a legal ground which goes to the root of the matter and, therefore, the same should be admitted. He also stated that all the necessary facts relating to this ground already on record and any investigation of fact is not required for adjudicating the additional ground. 4. Ld. D.R. did not seriously objected to the admissions of additional ground. 5. We have carefully considered the rival submissions and perused the material placed before us. We find that the Hon'ble Apex Court has considered the issue with regard to the admission of additional ground in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 . Their Lordships of the Hon'ble Apex Court has held as under :- "Undoubtedly, the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which are ....
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....ment of the income for the period prior to amalgam-ation in the hands of Pampasar Distillery Ltd. The same should be sustained. Alternatively it is submitted by the ld. D.R. that if at all a view is taken that the assessment cannot be made in the hands of a non-existent company, it would only be a irregularity and will not be illegality. Therefore, the assessment order can be set aside to the file of Assessing Officer with a direction to make the assessment in the hands of the amalgamated company. In support of this contention, he has relied upon the decision ITAT, Mumbai Bench in the case of Century Enka Ltd. v. Dy. CIT [2006] 101 ITD 489 . He further submitted that even as per provision of section 170 sub-section (2) of the Income-tax Act, 1961, the assessment can be made in the hands of the successor company. In the scheme of amalgamation, the business of the amalgamating company is taken over as a going concern by the amalgamated company. Thus, there is succession of business as provided in section 170 of the Income-tax Act. He further contented that after the date of amalgamation the amalgamating company does not remain in existence and, therefore, cannot be found by the Asse....
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....date of amalgamation is assessable in the hands of amalgamating company. Ld. counsel for the assessee has also not disputed the above submission of the ld. D.R. We also find that the view canvassed by the ld. D.R. is supported by the decision of the Hon'ble Allahabad High Court in the case of Motor Sales (supra) wherein their Lordship held as under :- "Held, that where a firm is converted into a company then the business of the firm is succeeded by the company. Therefore, the Tribunal was right in handling that the firm was assessable till it was succeeded by the company." No contrary decision is brought to our knowledge. We, therefore, agree with the submission of ld. D.R. that the income till date of amalgamation is assessable in the hands of the amalgamating company. 13. Now the question is whether the income prior to the date of amalgamation can be assessed in the hands of amalgamating company on the date when amalgamating company does not remain in existence or it is to be assessed in the hands of amalgamated company as a representative of amalgamating company. 14. It is contended by the ld. counsel that the Assessing Officer has made the assessment on the date on which t....
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....y Ltd. the same should be made in the hands of amalgamated company, i.e., Shaw Wallace Distilleries Ltd., for which he placed reliance on section 170 of the Income-tax Act. 16. Section 170 of the Income-tax Act deals with the succession to the business otherwise than on death. It reads as under :- "170. Succession to business otherwise than on death.-(1) Where a person carrying on any business or profession (such person hereinafter in this section being referred to as the predecessor) has been succeeded therein by any other person (hereinafter in this section referred to as the successor) who continues to carry on that business or profession,- (a) the predecessor shall be assessed in respect of the income of the previous year in which the succession took place up to the date of succession; (b) the successor shall be assessed in respect of the income of the previous year after the date of succession. (2) Notwithstanding anything contained in sub-section (1), when the predecessor cannot be found, the assessment of the income of the previous year in which the succession took place up to the date of succession and of the previous year preceding that year shall be made on the s....
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....malgamation once the amalgamating company is dissolved it does not remain in existence and, therefore, it cannot be found. Once it cannot be found the income up to the date of amalgamation should be assessed in the hands of amalgamated company i.e. the successor company in the like manner and to the same extent as it would have been assessed in the hands of amalgamating company. We also found that similar view was taken by the ITAT Delhi Bench in the case of Hewlett Packard India (P.) Ltd. (supra) wherein the ITAT held as under :- "In a case of amalgamation where one entity takes over the business of two other entities, the same would be a case of succession to business otherwise on death and therefore the provisions of section 170 of the Act would apply." 17. Now the only question remains whether the assessment in the hands of a non-existent company is a nullity and invalid or it is only an irregularity. We find that the Delhi Bench of Tribunal in case of Impsat (P.) Ltd. (supra) has held the assessment in the hands of the amalgamating company which is non-existent to be nullity and invalid. Similarly ITAT Delhi Bench in the case of Hewlett Packard India (P.) Ltd. (supra) held ....
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....is liable to be cancelled being invalid. Accordingly, we cancel the assessment made in the hands of Pampasar Distillery Ltd. 20. As we have cancelled the assessment made in the hands of Pampasar Distillery Ltd., the revenue's appeal in ITA Nos. 558 to 560/Kol./2005 for assessment years 1999-2000 to 2001-02 which is against some relief allowed by CIT(A), does not survive, accordingly the same are rejected. 21. Appeal in ITA Nos. 1672 to 1676/Kol./2005 are by the revenue for assessment years 1994-95 to 1998-99 in the case of Parasakthi Finance & Investments Co. Ltd. In all these appeals by the revenue the common ground raised which reads as under :- "Ld. CIT(A), Madras, erred by deleting the demand standing in the name of M/s. Parashakti Finance & Investment Ltd. for the under noted reasons :- Deductor committed default during the respective financial years, i.e., 1994-95, 1995-96, 1996-97, 1997-98 and 1998-99 whereas, the order for amalgamation was passed by the Hon'ble High Court, Madras, on 9-12-1997. During the material point of time, the deductor and the deductee company had their independent existence. Hence, the deductor company had legal liability to deduct tax at sou....