TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 613
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.... is whether in the facts and circumstances of the case, the notice issued under Section 153C/143(3) of the Income Tax Act, 1961 (hereinafter, "the Act") to M/s Micra India Pvt. Ltd. was binding and could have been proceeded with further. 2. The facts necessary to decide the case are that the original assessee, M/s Micra India Pvt. Ltd., was assessed in the regular course of its business for assessment years 2003-04 through 2008-09. Proceedings under Section 391 of the Companies Act were initiated to amalgamate the said assessee (M/s Micra India Pvt. Ltd.) with M/s Dynamic Buildmart (P) Ltd. (hereinafter referred to as "transferee"). The order sanctioning the amalgamation scheme was made by this Court on 22.12.2009; in its terms the appoint....
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.... the latter, and since such notice had not been issued to the transferee company, the entire proceedings were a nullity. 3. It is urged on behalf of the revenue that the ITAT fell into error in not noticing that the assessee, at the initial stages of the proceedings before the assessing officer, did not object to the proceedings and did not rely upon the amalgamation. It was contended that in these circumstances, the ITAT should not have interfered with and quashed the assessment. Counsel for the revenue argued that after receiving the notice under Section 153C, the assessee participated in the proceedings. The AO, in fact took note of the change resultant from the amalgamation and reflected that in the assessment order. The revenue furthe....
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....ding that the assessment was in fact in the name of amalgamated company and there was only a procedural defect. 10. Section 481 of the Companies Act provides for dissolution of the company. The Company Judge in the High Court can order dissolution of a company on the grounds stated therein. The effect of the dissolution is that the company no more survives. The dissolution puts an end to the existence of the company. It is held in M.H. Smith (Plant Hire) Ltd. Vs. D.L. Mainwaring (T/A Inshore), 1986 BCLC 342 (CA) that "once a company is dissolved it becomes a non-existent party and therefore no action can be brought in its name. Thus an insurance company which was subrogated to the rights of another insured company was held not to be entitl....
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....ied) 7. The revenue, however, urges that the assessment is justified because the liabilities of the amalgamating company accrue to the amalgamated (transferee) company. While that is true, the question here is which entity must the assessment be made on. The text of Section 170(2) makes it clear that the assessment must be made on the successor (i.e., the amalgamated company). 8. In Saraswati Industrial Syndicate (supra) it was held that: "after the amalgamation of the two companies the transferor company ceased to have any entity and the amalgamated company acquired a new status and it was not possible to treat the two companies as partners or jointly liable in respect of their liabilities and assets." In Vivid Marketing (supra), this ....
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....TAT. This question, too, has been dealt with - in CIT v. Dimension Apparels Pvt. Ltd. reported in (2015) 370 ITR 288. In that case, after noticing Section 292B, the Court discussed the ruling in Spice Entertainment (supra), wherein it had been held that since the assessment made in such cases is against an amalgamated company in respect of income of the amalgamating company for the period prior to the amalgamation, the income tax authorities are nevertheless under an obligation to substitute the successor in place of the amalgamated company. Thus, "such a defect cannot be treated as procedural defect". In any event, it is to be noted that the fact of amalgamation of the assessee with the transferee company had been intimated and disclosed i....