TaxTMI 
TaxTMI 
2015 (6) TMI 601
X X X X Extracts X X X X
X X X X Extracts X X X X
....s India (P) Ltd. and the decision arrived for the Assessment year 2003-04 would be equally applicable to other Assessment years from 2004-05 to 2008-09 of M/s Computer Engineering Services India (P) Ltd. and, Assessment years 2003-04 to 2008-09 of M/s Foryu Overseas (P) Ltd. in which an additional ground against admission of Cross-Objection preferred by the assessee is challenged by the Revenue, which we dealt with as a preliminary objection and has adjudicated on 30-01-2015. 3. Taking up Assessment year 2003-04 of M/s Computer Engineering Services India (P) Ltd. (ITA No. 5874/D/2013 (Assessee) and 5975/D/2013 (Deptt.) and an additional ground raised by the Revenue in M/s Foryu Overseas (P) Ltd. 4. At the outset, the Ld. CIT, DR, Sri Ramesh Chander, opposed vehemently admission of the cross objection filed by the assessee in M/s Foryu Overseas Pvt. Ltd. According to him, the CO filed by the assessee suffers from latches and hence need to be dismissed at the very outset itself. According to him, the Revenue filed appeal on 31.01.2014 and the notice of hearing was generated, signed and dispatched on 04.02.2014. So according to him, the CO filed by the assessee on 15.09.2014 is hope....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... made by the assessee to the objection raised by the Revenue in this regard, we have recorded the finding in this respect as under:- "We have perused the Report of AR and are satisfied that the CO's filed by the A (assessee) are within time. The matter can now be proceeded with." 7. In the aforesaid factual matrix, the objection raised by the Revenue in this respect has no merits and therefore dismissed. 8. The revenue has however also raised another Additional Ground of Appeal as under: "The ld. CIT(A) has erred in law in adjudicating the appeal filed by the assessee in as much as statutory requirement of filing statement of facts with Form No. 35 was not complied with." 9. The ld CIT DR submitted passionately that the assessee as per the statutory Form No. 35 was under a statutory obligation to file statement of fact and this was not complied with. In the absence of this compliance of statutory requirement the appeal was defective in as much as not maintainable and hence ought not to have been adjudicated upon. For non compliance of this statutory requirement the adjudication gets vitiated and argued at length and submitted written arguments in support of his contention.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ainst the law as there is a defect in Form No. 35 In our view the arguments raised by the ld. DR are devoid on merit. Defects in the return of income filed, defects on Form No. 35 which is the form of appeal etc. are to be considered by the respective authorities before whom these are filed and the maintainability of the appeal before us cannot be challenged. The right of appeal is a substantive right. Procedural issues can not take away substantial rights of a person. This cannot be a ground for the revenue to challenge the order of the ld. CIT(A) which is in this case in favour of the Revenue. The arguments to say the least are farfetched. Hence we dismiss the same. 11 In view of the Coordinate Bench decision, we concur with the view expressed by the Coordinate Bench of the Tribunal and we dismiss the additional ground raised by the revenue in this regard. 12 Ground No.5 of the assessee's appeal which is against the validity of the issue of notice under Section 153C of the Act and consequently the completion of assessment in pursuance thereto, reads as under. "5. That on the facts and circumstances of the case and the provision of law, the Ld.CIT(Appeals) has failed to ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ering Services India (P) Ltd. (supra) ceased to exist. That the Assessing Officer issued notice under Section 153C on 4.10.2010 which was after the order of Hon'ble Jurisdictional High Court sanctioning the scheme of amalgamation. Thus the notice issued under Section 153C in the name of non existing company is a nullity and consequently the assessment framed on the basis of notice issued under Section 153C is also a nullity. The reliance was placed on the following decision of the various Benches of the ITAT: a) Impsat (P) Ltd. Vs Income Tax Officer, (2004) 91 ITD 354 (Del) b) ACIT Vs SPN Milk Products Industries Pvt. Ltd., ITA No. 565 to 578/Del/2012 order dated 22.01.2012 of ITAT Delhi Benche 'G' New Delhi. c) ACIT Vs Dimension Apparels Pvt. Ltd., ITA No. 571 to 576/Del/2012, order dated 21.06.2013 of ITAT Delhi Bench 'B' New Delhi. d) ACIT Vs Micra India Pvt. Ltd., ITA No. 1060 to 1065/Del/2012 order dated 21.09.2012 of ITAT Delhi Bench 'E' New Delhi. e) ACIT Vs Chanakaya Export Pvt. Ltd., ITA No. 539 to 544/Del/2012 order dated 19.07.2013 of ITAT Delhi Bench 'B' New Delhi . f) Triveni Engineering & Industries Ltd. Vs DCIT, (2005) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Supp. 1 SCR 3/ (186 ITR 278)has 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." c) thirdly, assessee has duly filed the Hon'ble High Court amalgamation orders which are available in public domain to ld. AO during assessment proceedings, and has taken the said plea before ld. CIT(A) in written submissions on which remand report is called for and duly obtained. In remand report ld. AO has admitted the fact of amalgamation which as per settled principle of Indian jurisprudence that admitted fact requires no proof and so answers to revenue's self defeating contention. Further nowhere in remand report or otherwise it is stated by the ld. AO or ld. CIT(A) that fact of amalgamation was not intimated to ld. AO and on the contrary a express and loud finding is recorded by ld. CIT(A) in impugned orders, that intimation to ld. AO about amalgamation was made late at fag end of assessment proceedings which is sufficient to known of the revenue's instant....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... about amalgamation, yet the final assessment order of the AO in respect of a company which did not exist o the date of the assessment, it was therefore urged that the impugned order of the ITAT should be left undisturbed. g) The learned counsel for the assessee relied upon two rulings of Hon'ble High Court: Spice Entertainment Ltd. vs. CIT (ITA No. 475/2011; reported in 2012 (280) ELT 43) and CIT vs. Vivid Marketing Services Pvt. Ltd. (ITA 273/2009). h) It was submitted that in the case of Vivid Marketing (supra), it has been held as under: "When the Assessing Officer passed the order of assessment against the respondent company, it had already been dissolved and struck off the register of the Registrar of companies' u/s 560 of the Companies Act. In these circumstances, the Tribunal rightly held there could not have been any assessment order passed against the company which was not have been any assessment order passed against the company which was not in existence as on that date in the eyes of law it had already been dissolved. It was further held section 176 of the Act, which enacts provisions relating to discontinuation of business, does not apply to a case of amalg....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce. Clearly, this was a case where the assessment was contrary to law as having being completed against a non existent company. The ITAT's decision is, in the circumstances, justified and warranted." 17. It was also submitted by the assessee that when assessee filed detailed written submissions to ld. CIT(A) on the subject issue of assessment on non existing company, same were duly sent to ld. AO for his comments where remand report dated 12.1.2012 (pages 81, 82 of paper book) & dated 8.8.2011 (pages 891, 92 of paper book). In Computer and Foryu cases were duly sent to Ld CIT-A through supervision Add CIT. In that report, Ld AO has firstly confirmed the factum of amalgamation and secondly has not raised any sort of objection what so ever. This is besides the fact that in Computer case assessee has duly filed a letter to Ld AO specifically communicating fact of amalgamation. On basis of the overwhelming material on records, Ld CIT-A adjudicated the issue which is sought to be complained by revenue on flimsy grounds. In view of above, Ld. Counsel of the assessee vehemently objected to admission of aforesaid grounds being afterthought and contrary to valid remand report placed on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) Ltd.". It is also stated that the previous letter dated 26.10.2010 mentioning the amalgamation (referred by the appellant in its written submission) was not addressed to the AO of the appellant and also did not bear the receipt stamp of the Department. It was stated that when the appellant itself filed the return of income in the name of Computer Engineering Services (P) Ltd. and used the letter head of Computer Engineering Services (P) Ltd. to respond to the questionnaire issued by the AO, it can hardly make a case of 'illegality' of the impugned orders and, in any case the assessment proceedings were attended by Instronics Ltd. 21. We have carefully considered the arguments of both sides, perused the material placed before us. Admittedly the assessment for the year under consideration has been completed on the basis of notice under Section 153C dt. 14.10.2010 which reads as under: "To M/s Computer Engineering Services Pvt. Ltd. C-33, Hastsak Vihar Uttam Nagar, New Delhi Sir/madam, In pursuance of the provisions of section 153C of the Income Tax Act, 1961, inserted by the Finance Act, 2003 with effect from 1 st June 2003, you are required to furnish return of income in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant/amalgamated company appeared and brought this fact to the knowledge of the Assessing Officer. He, however, did not substitute the name of the appellant on record. Instead, the Assessing Officer made the assessment in the name of M/s Spice which was non existing entity on that date. In such proceedings and assessment order passed in the name of M/s Spice would clearly be void. Such a defect cannot be treated as procedural defect. Mere participation by the appellant would be of no effect as there is no estoppels against law." 24. The ratio of the above decision would be squarely applicable to the case of the assessee because the facts are identical. In the above mentioned case notice under section 143(2) of the Act was sent to the company which was not in existence on the date of the issue of notice. Similarly in the case of the assessee notice under Section 153C was issued in the name of M/s Computer Engineering Services (P) Ltd.. on 4.10.2010 when this company was not in existence. Therefore, the ratio of the decision of Hon'ble jurisdictional High Court in the case of M/s Spice Entertainment Ltd. (supra) would be squarely applicable to the issue of notice under Secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 4. In view of this consistent view expressed by this Court we are of the opinion that no substantial question of law arises. 5. The appeals are accordingly dismissed." 25. Also Karnataka High Court in the case of CIT vs. M/s Intel Technology India Pvt. Ltd. ITA No. 499/2009 has held as under: "7 In the present case also, the proceedings had been initiated against a non existing company/SSS initiated against a non-existing company/SSS Limited even after the amalgamation of the said company with M/s Intel Technology India Pvt. Ltd. We do no see any good ground to differ with the said judgment of the Delhi High Court. 8 Accordingly, for the reasons given in the judgment of the Delhi High Court in the case of Spice Infotainment Ltd. (supra) these appeals are dismissed and we decide the substantial questions of law in favour of the assessee and against the revenue. 26 On a similar issue, the Hon'ble Calcutta High Court in the case of I.K. Agencies Pvt. Ltd. vs. CWT 20 taxmann.com 731 has held as under: "That the initiation of the proceedings for reopening of assessment depends upon the service of valid notice in terms of section 17 upon the assessee. A notice issued to a per....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as not valid. 30. Moreover it is seen that on 26.10.2010 the assessee intimated to the Assessing Officer with regard to amalgamation of the assessee company with M/s Instronics Ltd. and also furnished a copy of the order of the Hon'ble Jurisdictional High Court. At that time the Assessing Officer could have issued the notice under Section 153C in the name of the transferor company i.e. M/s Instronics Ltd. Also in AO in the remand report dated 12.1.2012 (pages 81-82 of Paper book) has held as under: "The appellant has contended that proceedings u/s 153C have wrongly been initiated as on date of issue of notice the said company amalgamated with M/s Instronics Ltd., and as such proceedings initiated were against non existent person and bad in law. Further the assessee has contended that no satisfaction to the effect that document belonging to the assessee company was seized from a person covered under search which is a prime requirement for initiating proceedings has been done in the case of assessee company. The documents belonging to the assessee company were seized from a person covered under search i.e. Shri B. K. Dhingra is evident from the fact available on record as well....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., defect or omission" in any return of income, assessment or notice. The revenue had argued that this provision neutralizes procedural defects in jurisdiction. In these circumstances, it was submitted, having regard to the assessee's omission to urge the so-called illegality at the threshold, the Court ITA 441/2013 & connected matters Page 6 ought to interfere with the order of the ITAT. 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 in response to the notice under Section 153C on 22.11.2010. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sdiction issue and not to other jurisdictional issues when there is inherent lack of jurisdiction. Further, we wish to commemorate the trite principle that an order which is nullity in the eyes of law, plea relating to the same can be raised at any stage even during collateral proceedings as explained in leading case law of Gujarat High court in case of P.V.Doshi 113 ITR Page 22. 35. The Hon'ble Delhi High Court in the case of S.S. Ahluwalia (Supra) has held as under: 36. In Budhia Swain and Ors. Vs. Gopinath Dev and Ors. (1999) 4 SCC 396, it was highlighted that distinction exists and was well recognized between lack of jurisdiction and mere error in exercise of jurisdiction. Lack of jurisdiction strikes at the very root of the action/act and want of jurisdiction might vitiate proceedings rendering the orders passed and exercise thereof, a nullity. But a mere error in exercise of jurisdiction would not vitiate the legality and validity of the proceedings and the said order was valid unless set aside in the manner known to law by laying a challenge, subject to law of limitation. The following portion of Hira Lal Patni Vs. Kali Nath, AIR 1962 SC 199 was quoted: .... The valid....