TaxTMI 
TaxTMI 
2018 (10) TMI 1119
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....19/-. Thereafter, notice u/s 148 dated 28th March, 2011 was issued to the assessee. The assessee, in response to the statutory notices, appeared before the Assessing Officer and filed various details as called for. The Assessing Officer completed the assessment determining the loss at Rs. 7,27,32,900/-. 4. Before the CIT(A), apart from challenging the additions on merit, the assessee challenged the validity of the notice issued u/s 148 of the IT Act. It was argued that the assessee company got dissolved pursuant to the order of the Hon'ble Delhi High Court passed on 6th August, 2009 whereas the notice u/s 148 of the IT Act was issued to the assessee on 28th March, 2011. The copy of the order of the Hon'ble Delhi High Court was filed before the CIT(A). It was further submitted that although this fact was brought to the notice of the Assessing Officer, vide submissions dated 26th April, 2011, 27th May, 2011 and 30th September, 2011, the Assessing Officer, ignoring the fact that the company did not exist on the date of issuance of the notice u/s 148, passed the reassessment order. Therefore, the same is void ab initio and invalid in law. Various decisions were also brought ....
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....ction 148. In response to the request of the assessee, reasons recorded for initiating reassessment proceedings was also provided to the assessee by the AO. The objections raised by the appellant against the proceedings u/s 147 were duly disposed off by the AO vide its order dated August 19, 2011. 4.2 The assessee company NDC Telecommunication India(P)Ltd. got dissolved pursuant to the Order of Hon'ble Delhi High Court passed on August 6, 2009 whereas the notice under section 148 of the Act was issued to assessee on March 28, 2011. This fact was brought to the notice of AO vide submissions dated April 26, 2011, May 27, 2011 and September 30, 2011. As NDC India did not exist on the date of issuance of the captioned notice i.e. March 28, 2011, the re-assessment proceedings initiated by the AO and the reassessment order passed by him are invalid in law, void ab initio and thus cannot be acted upon. 4.3 In CIT Vs. Express Newspapers Limited (40 1TR 38, 57) the Hon'ble Madras High Court has held that "the existence of an assessee is essential for an assessment. There cannot be an assessment of a nonexistent person. The definition of the word 'assessee' in the Act would....
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....sessment 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 estoppel against law." 4.7 In Impsat (P) Ltd. vs. Income Tax Officer (2005) 92 TTJ (Del) 552 : (2004) 91 ITD 354 (Del) (ITAT Delhi) Hon'ble Delhi Tribunal held as under: " It is thus clear that in the present case the assessee-company ceased to exist after being dissolved under s. 560. Once it ceased to exist, there was no question of assessing it for income-tax, as it appears that there is no provision in the present Act to assess a company which is dissolved. Our attention was not drawn to any provision in the Act enabling the AO to do so. Sec. 159 of the present Act does not cure the lacuna......... If the company is not in existence at the time of making the assessment, no order of assessment can be validly passed upon it under the IT Act and if one is passed, it must be a nullity." 4.8 In Commissioner of Income Tax vs Vived Marketing Servicing Pvt. Ltd. - ITA No.273/2009 - Hon'ble Delhi High Court held "When the Assessing Officer passe....
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.... ITR 288 (Del), the ground raised by the Revenue should be dismissed. The ld. DR, on the other hand, heavily relied on the order of the Assessing Officer. 8. We have considered the rival submissions made by both the sides and perused the orders of the authorities below. We find the ld.CIT(A) quashed the reassessment proceedings on the ground that the same has been initiated on a non-existing entity and, therefore, the reassessment proceedings are void ab initio. We do not find any infirmity in the order of the CIT(A) on this issue. We find the Delhi Bench of the Tribunal in the case of Vertex Customer Management India Pvt. Ltd. vs. DCIT vide ITA No.966/Del/2016, order dated 6th July, 2018, has decided an identical issue and quashed the assessment on the ground that assessment has been framed on a nonexistent company. The relevant observations of the Tribunal from para 10 onwards read as under:- "10. We have considered the rival arguments made by both the sides, perused the orders of the authorities below and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that the Hon'ble High Cour....
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.... provisions of Section 292Bof the Act. Section 292B of the Act reads as under:- "292B. No return of income assessment, notice, summons or other proceedings furnished or made or issue or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reasons of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceedings is in substance and effect in conformity with or according to the intent and purpose of this Act." 13. The Punjab & Haryana High Court stated the effect of this provision in CIT Vs. Norton Motors, 275 ITR 595 in the following manner:- "A reading of the above reproduced provision makes it clear that a mistake, defect or omission in the return of income, assessment, notice, summons or other proceeding is not sufficient to invalidate an action taken by the competent authority, provided that such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or acc....
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....e, which had been taken into consideration by the Revenue, was an absolutely invalid return as it had a glaring inherent defect which could not be cured in spite of the deeming effect of Section 292B of the 1961 Act." 15. Likewise, in the case of Sri Nath Suresh Chand Ram Naresh Vs. CIT (2006) 280 ITR 396, the Allahabad High Court held that the issue of notice under Section 148 of the Income Tax Act is a condition precedent to the validity of any assessment order to be passed under section 147 of the Act and when such a notice is not issued and assessment made, such a defect cannot be treated as cured under Section 292B of the Act. The Court observed that this provisions condones the invalidity which arises merely by mistake, defect or omission in a notice, if in substance and effect it is in conformity with or according to the intent and purpose of this Act. Since no valid notice was served on the assessee to reassess the income, all the consequent proceedings were null and void and it was not a case of irregularity. Therefore, Section 292B of the Act had no application. 16. When we apply the ratio of aforesaid cases to the facts of this case, the irresistible co....
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....e Tax Authorities to substitute the successor in place of the said 'dead person'. Such a defect cannot be treated as procedural defect... once it is found that assessment is framed in the name of non-existing entity it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act." (Emphasis Supplied) 21. In Spice Entertainment Ltd. (supra) the reason for the inapplicability of Section 292-B was additionally premised on the decision of the Punjab & Haryana High Court in CIT v. Norton Motor, [2005] 275 ITR 595/146 Taxman 701, that while Section 292B can cure technical defects, it cannot cure a "jurisdictional defect in the assessment notice."In Spice Entertainment Ltd. (supra), therefore, this Court expressly classified "the framing of assessment against a non-existing entity/person" as a jurisdictional defect. This has been a consistent position. As early as 1960, in CIT v. Express Newspapers Ltd. [1960] 40 ITR 38 (Mad), the Madras High Court held that "there cannot be an assessment of non-existent person. The assessment in the instant case was made long after the Free Press Comp....