TaxTMI 
TaxTMI 
2016 (10) TMI 1148
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...., the learned Principal Commissioner of Income Tax - 6, Mumbai ("the PCIT") erred in invoking the provisions of section 263 of the Income-tax Act, 1961 ("the Act) and directing setting aside of the assessment order passed under section 143(3) of the Act by the Income Tax Officer - 5(3)(1), Mumbai ("the Assessing Officer") dated 29.10.2013 in the name of Emerging Money Mall Ltd." on the alleged ground that the said assessment order was erroneous and prejudicial to the interest of the revenue. 2. On the facts and circumstances of the case and in law, the impugned order dated 30.03.2016 passed by the PCI T under section 263 of the Act is without jurisdiction, illegal, bad in law and void-ab-intio. 3. The leaned PCIT erred in invoking revisionary proceedings under section 263 of the Act in respect of an order of assessment in the name of "Emerging Money Mall Ltd." which is held by the PCIT himself to be bad in law and thereby revising an order of assessment which is non-existent in law. 4. The learned PCIT erred in invoking revisionary proceedings under section 263 of the Act in respect of an order of assessment on the ground that the Appellant has not objected to the notice issu....
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....ss. 2. As stated above, pursuant to merger of M/s. EMML with M/s. RCL the assessee company i.e. M/s. EMM ceased to exist from 17-04-2013, the date when amalgamation /merger scheme became effective, and yet the assessment order has been passed in the name of M/s. EMML (formerly known as Reliance Money Mall Ltd.) on 29-10-2013. The Assessing Officer despite keeping on record the order of the High Court approving the scheme of amalgamation, failed to pass the assessment order in the name of Reliance Capital Ltd. on behalf of Emerging Money Mall Ltd. which merged with Reliance Capital Ltd. w.e.f. 31-03-2013 pursuant to scheme of Merger approved by Hon"ble High Court and passed the assessment order in the name of the company which had ceased to exist w. e .f. 17-04-2013. This assessment order is, therefore, bad in law. 4. The learned Counsel for the assessee further drew our attention to the reply filed by assessee in response to the above show-cause notice dated 08-05-2015, copy of which is enclosed in assessee's paper book at pages 131 to 134, stating that pursuant to merger of EMML with Reliance Capital Ltd (RCL), the assessee company EMML ceased to exist from 17/04/13, the date o....
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....the assessment order u/s. 143(3) on 29-10-2013 in the case of M/s. Emerging Money Mall Ltd. for Ay 2011-12 ( which merged with M.s RCL w. e. f. 31-03-2013 pursuant to merger/amalgamation sanctioned by Hon"ble High Court), the Assessing Officer has failed to carry out relevant and meaningful enquiries as warranted by the facts and circumstances of the case and that the assessment has been completed without examining all the aspects which were required to be looked into for arriving at the correct taxable income earned by the assessee. As discussed in detail below it would be apparent that the Assessing Officer failed to carry out relevant and meaningful inquiries which were warranted by the facts and circumstances of the case. 2. Pursuant to merger of M/s. EMML with M/s. RCL, the assessee company i.e. M/s. EMML ceased to exist from 17-04-2013, the date when amalgamation/merger scheme became effective, and yet the assessment order has been passed in the name of M/s. EMML (formerly known as Reliance Money Mall Ltd.) on 29/10/2013. The Assessing Officer despite keeping on record the order of the High Court approving the scheme of amalgamation, failed to pass the assessment order in t....
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....scheme of amalgamation dated 22-03-2013, failed to pass the assessment order in the name of Reliance Capital Ltd. on behalf of EMML which merged with Reliance Capital Ltd. w. e. f. 31/03/2013. Further, we noted that the Principal CIT vide another notice dated 17-02-2016 incorporated certain changes from the first notice, in which the changes made as compared to the earlier notice dated 07/04/2015 are brought out. The changes made are narrated the learned Counsel for the assessee before us. 8. In view of the above facts, now it was seen that pursuant to merger of EMML ceased to exist from 17.04.2013, the date when amalgamation/merger scheme became effective and yet the assessment order has been passed in the name of EMML (formerly known as Reliance Money Mall Ltd.) on 29/10/2013. The AO despite keeping on record the order of the Hon'ble Bombay High Court approving the scheme of amalgamation, failed to pass the assessment order in the name of Reliance Capital Ltd. on behalf of Emerging Money Mall Ltd. which merged with Reliance Capital Ltd. w. e. f. 31/03/2013. We find that pursuant to scheme of merger approved by Hon'ble Bombay High Court the assessment order should not have been p....
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....he case could be selected for scrutiny and assessment proceedings could be initiated, M/s Spice got amalgamated with M Corp (P) Ltd. It was the result of the scheme of the amalgamation filed before the Company Judge of this Court which was duly sanctioned vide orders dt. 11th Feb., 2004. With this amalgamation made effective from 1st July, 2003, M/s Spice ceased to exist. That is the plain and simple effect in law. The scheme of amalgamation itself provided for this consequence, inasmuch as simultaneous with the sanctioning of the scheme, M/s Spice was also stood dissolved by specific order of this Court. With the dissolution of this company, its name was struck off from the rolls of companies maintained by the Registrar of Companies. 8. A company incorporated under the Indian Companies Act is a juristic person. It takes its birth and gets life with the incorporation. It dies with the dissolution as per the provisions of the Companies Act. It is trite law that on amalgamation, the amalgamating company ceases to exist in the eyes of law. This position is even accepted by the Tribunal in para 14 of its order extracted above. Having regard to this consequence provided in law, in num....
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....e other, both amount to amalgamation. When two companies are merged and are so joined, as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its entity." 9. The Court referred to its earlier judgment in General Radio & Appliances Co. Ltd. vs. M.A. Khader (1986) 60 Comp Case 1013 (SC). In view of the aforesaid clinching position in law, it is difficult to digest the circuitous route adopted by the Tribunal holding that the assessment was in fact in the name of amalgamated company and there was only a procedural defect. 10. Sec. 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 h....
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....resisting a challenge to the notice, etc., only if there is a technical defect or omission in it. However, there is nothing in the plain language of that section from which it can be inferred that the same can be relied upon for curing a jurisdictional defect in the assessment notice, summons or other proceeding. In other words, if the notice, summons or other proceeding taken by an authority suffers from an inherent lacuna affecting his/its jurisdiction, the same cannot be cured by having resort to s. 292B." 14. The issue again cropped up before the Court in CIT vs. Harjinder Kaur (2009) 222 CTR (P&H) 254: (2009) 19 DTR (P&H) 211. That was a case where return in question filed by the assessee was neither signed by the assessee nor verified in terms of the mandate of s. 140 of the Act. The Court was of the opinion that such a return cannot be treated as return even a return filed by the assessee and this inherent defect could not be cured in spite of the deeming effect of s. 292B of the Act. Therefore, the return was absolutely invalid and assessment could not be made on a invalid return. In the process, the Court observed as under: "Having given our thoughtful consideration to....