TaxTMI 
TaxTMI 
2015 (11) TMI 1300
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....3) read with section 144C of the Income Tax Act, 1961 ('the Act') is beyond jurisdiction, bad in law and void ab initio. 1.1 That on the facts and circumstances of the case, the assessing officer has erred in framing the assessment on a non-existent entity which was merged with Sapient Consulting Pvt. Ltd. w.e.f. April 1, 2011" 3. We have heard the rival submissions and carefully perused the relevant material placed on record before us. The ld. Senior counsel of the assessee submitted that the assessment order dated 20.1.2014 u/s 143(3) r/w section 144C of the Act was passed in the name of Sapient Corporation Pvt. Ltd. (the amalgamating company) which was non-existent entity on the date of passing impugned said final assessment order since it was merged into Sapient Consulting Pvt. Ltd. (the amalgamated company) vide Hon'ble Delhi High Court order dated 12.10.2011 and 6.1.2012 and accordingly, the said order, being void ab initio, is liable to be quashed. To support this contention, the ld. Senior counsel has placed reliance on various orders/judgments of Hon'ble Delhi High Court and Tribunals including judgement of Hon'ble Jurisdictional Delhi High Court in the ca....
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....gher appellate forum. Hence, in view of dicta laid down by Hon'ble Apex Court in the case of NTPC vs CIT (supra), the additional ground being mixed issue of law and facts is admitted for consideration and adjudication on merits. Adjudication of additional ground no. 1 & 1.1 7. Apropos additional ground of the assessee, we have heard the rival submissions and carefully perused the relevant material placed on record. Ld. senior counsel of the appellant/assessee submitted that the appellant Sapient Corporation Pvt. Ltd. (hereinafter referred to as 'amalgamating company') was incorporated on 9.3.2000 and was consistently being assessed in circle 7(1), C.R. Building, New Delhi. On 13.11.2013, a new company in the name of Sapient Consulting Pvt. Ltd. (hereinafter referred to as 'amalgamated company') was incorporated and the amalgamating company merged with new amalgamated company under scheme of amalgamation u/s 391 and 394 of the Companies Act 1956 in pursuance to order of Hon'ble Delhi High Court dated 12.10.2011 and 6.1.2012 w.e.f. the appointed date i.e. 1.4.2011. Ld. Senior counsel further pointed out that in pursuance to aforesaid order, the appellant company stood disso....
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....nal High Court, after referring to the dicta laid down by Hon'ble Supreme Court in the case of Bhagwandass Chopra vs Untied Bank of India 1988 AIR 215 (S.C.), has held that these proceedings will continue to operate against and also binding on the transferee company or corporation in the same way in which they operate against a person on whom any interest has devolved in any of the ways mentioned in Rule 10 of order 22 of Civil Procedure Code 1908. Learned Departmental Representative also placed reliance on following orders/judgements:- i) Guduthur Bros vs ITO 40 ITR 298 (S.C.) ii) CIT vs Jagat Novel Exhibitors (P) Ltd. 356 ITR 559 (Del) iii) Venad properties (P) Ltd. vs CIT 340- ITR 463 iv) Century Enka Ltd. vs DCIT 303 ITR (AT) 01 (Mumbai Tribunal) v) Chatturam & Others vs CIT 15 ITR 302 (Federal Court) 10. On the basis of above noted orders/judgements, ld. Ld. DR further elaborated his legal stand and submitted that in the case of Spice Infotainment vs CIT (supra), the scheme of amalgamation as well as order of Hon'ble High Court have not been considered. Learned Departmental Representative submitted that if for the sake of argument, it is found that the a....
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....d that the assessee is not seeking waiver of tax liability and the assessee fairly accepts that as per section 2(1B) of the Act, the tax liability is fastened on the amalgamated company and hence the assessee has raised legal objection that the assessment has been framed in the name of non-existent entity on 21.2.14 despite the fact that the assessee by way of letter dated 27.1.12 intimated the Assessing Officer about the merger of assessee company with Sapient Consulting Pvt. Ltd., the amalgamated company in pursuance to the order of Hon'ble Delhi High Court dated 12.10.11 censuring merger of the assessee as per scheme of amalgamation u/s 391 to 394 of the Companies Act, 1956 dated 6.1.12 w.e.f. the appointed date viz. 1.4.11 which is also apparent from the scheme of amalgamation available at pages 79-80 of the assessee's paper book. Ld. Senior counsel further pointed out that the assessee is not challenging the validity of notice u/s 143(2) of the Act and hence, the propositions relied by ld. Ld. DR and provisions of section 292B or 292BB of the Act are not applicable to the case of the assessee. 13. Learned counsel of the assessee has also drawn our attention towards order ....
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....P dated 19.2.13 u/s 144C(5) of the Act. 15. In the light of above noted dates of events having taken place in the present case, we proceed to decide the legal objection of the assessee against validity of impugned assessment orders. At the very outset, we are required to consider the ratio of the decision of Hon'ble High Court of Delhi in the case of Spice Entertainment Ltd vs CST dated 3.8.2011 in I.T.A. No. 475-476 of 2011 wherein their lordships speaking for Hon'ble Jurisdictional High Court held as follows:- "16. When we apply the ratio of aforesaid cases to the facts of this case, the irresistible conclusion would be provisions of s. 202B of the Act are not applicable in such a case. The framing of assessment against a non- existing entity/person goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a 'dead person'. 17. The order of the Tribunal is, therefore, clearly unsustainable. We, thus, decide the questions of law In favour of the assessee and against the Revenue and allow these appeals. 18. We may, however, point out that the returns were filed by M/s Spice on the ....
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....144C of the Act on amalgamating company. Finally, the Assessing Officer passed final assessment order u/s 143(3) r/w section 144C of the Act on amalgamating company in pursuance to the directions of the ld. DRP dated 19.2.2013 u/s 144C(5) of the Act. 17. In the light of above noted facts, we clearly observe that the facts of the present case are quite similar to the facts of the case of Spice (supra), wherein their lordships have held that framing of assessment against non-existent entity/person goes to the root of the validity of the assessment which is not a procedural irregularity curable u/s 292B of the Act or under any other provision of the Act but it is a jurisdictional defect because there cannot be framing of any assessment order against a dead person or entity which is non-existent on the date of framing/passing assessment order. 18. Respectfully following the ratio of order of Hon'ble High Court in the case of Spice Entertainment (supra), we are inclined to hold that the assessment order dated 20.1.14 in the name of non-existent amalgamating company having jurisdictional defect is not sustainable and therefore, we quash the same. It is ordered accordingly. The addi....