TaxTMI 
TaxTMI 
2019 (9) TMI 688
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....f penalty order in the name of Padampat Gopal Krishna Ramapati Organisation Ltd. cannot be considered as fatal and is curable as per provision of section 292BB of the Act. 2. BECAUSE the Ld. CIT (A) has erred in law and on facts in sustaining the penalty order particularly when the notice issued under section 274 of the Act did not specify the grounds for which penalty was to be imposed. 3. BECAUSE the Ld. CIT(A) has erred in law and on facts in sustaining the imposition of penalty in respect of disallowance of deferred revenue expenditure of Rs. 8,66,280/- as the same are nil in subsequent year i.e. A.Y. 2004-05. 4. BECAUSE the Ld. CIT (A) has erred in confirming the imposition of penalty on erroneous assumption of facts. 5. BECAUSE the order appealed against is contrary to the facts, law and principles of natural justice." 2. Before us, Ld. Counsel submitted that the AO has passed the penalty order in the case of amalgamated company Padampat Gopal Krishna Ramapati Organisation Ltd. and not in the case of the assessee company; hence the same is not a valid order. He submitted that amalgamation took place on 14.12.2007 which was not only on record but also AO was fully awa....
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....24.12.2010 Notice U/s 274 was issued (pg. 38 of PB) in the name of "M/s Ankur Distributors Pvt. Ltd., (since merged with Gahoi Buildwell Ltd. Now known as V3S Infratech Ltd.)" stating as under: " * have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of explanation 1,2,3,4 & 5." 9 05.07.2013 Appeal against merit was partly allowed by Id. CIT(A) wherein disallowance U/s 94(7) was restricted to Rs. 28,51,847 by Id. CIT(A) and no further appeal was filed by the assessee. 10 03.02.2015 Second Notice/Letter for imposition of penalty was issued by the Assessing Officer (pg. 39 of PB). 11 16.03.2015 Penalty order in the name of "M/s Ankur Distributors Pvt. Ltd." was passed by holding that assessee has concealed the particulars of its income and imposed penalty of Rs. 8,83,319/- w.r.t. reduction of the loss claimed of Rs. 29,44,396/- 12 19.09.2016 CIT (A) partly allowed the appeal by confirming the imposition of penalty with respect of reduction of loss of Rs. 28,51,847/-. 3. He submitted that now this issue stands covered by the judgment of Hon'ble Supreme Court in the case of Principal Commissioner of Income Tax....
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....pril 2012 vide order dated 29th January 2013. The AO was informed on 2nd April 2013. AO still issued notice to the erstwhile company, Suzuki Powertrain India Limited and below it mentioned now known as M/s. Maruti Suzuki India Ltd. and final assessment order was passed in the name of "M/s. Suzuki Powertrain India Limited (amalgamated with Maruti Suzuki India Limited)". The Hon'ble Court after considering the following facts has observed and held as under:- "19. While assessing the merits of the rival submissions, it is necessary at the outset to advert to certain significant facets of the present case: (i) Firstly, the income which is sought to be subjected to the charge of tax for AY 2012-13 is the income of the erstwhile entity (SPIL) prior to amalgamation. This is on account of a transfer pricing addition of Rs. 78.97 crores; (ii) Secondly, under the approved scheme of amalgamation, the transferee has assumed the liabilities of the transferor company, including tax liabilities; (iii) Thirdly, the consequence of the scheme of amalgamation approved under Section 394 of the Companies Act 1956 is that the amalgamating company ceased to exist. In Saraswati Industrial Syndicat....
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....algamated company MSIL had addressed a communication to the assessing officer intimating the fact of amalgamation. In the above conspectus of the facts, the initiation of assessment proceedings against an entity which had ceased to exist was void ab initio. 20. In Spice Entertainment, a Division Bench of the Delhi High Court dealt with the question as to whether an assessment in the name of a company which has been amalgamated and has been dissolved is null and void or, whether the framing of an assessment in the name or such company is merely a procedural defect which can be cured. The High Court held that upon a notice under Section 143 (2) being addressed, the amalgamated company had brought the fact of the amalgamation to the notice of the assessing officer. Despite this, the assessing officer did not substitute the name of the amalgamated company and proceeded to make an assessment in the name of a non-existent company which renders it void. This, in the view of the High Court, was not merely a procedural defect. Moreover, the participation by the amalgamated company would have no effect since there could be no estoppel against law: "I1. After the sanction of the scheme on....
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...."there can be no estoppel in law", to affirm the quashing of the assessment order. 22. In Micron Steels, a notice was issued to Micron Steels Pvt Ltd (original assessee) after it had amalgamated with Lakhanpal Infrastructure Pvt Ltd. A Division Bench of the Delhi High Court upheld the setting aside of assessment orders, noting that Spice Entertainment is an authority for the proposition that completion of assessment in respect of a non-existent company due to the amalgamation order, would render the assessment a nullity. 23. In Micra India, the original assessee Micra India Pvt. Ltd had amalgamated with Dynamic Buildmart (P) Ltd. Notice was issued to the original assessee by the Revenue after the fact of amalgamation had been communicated to it. The Court noted that though the assessee had participated in the assessment, the original assessee was no longer in existence and the assessment officer did not the take the remedial measure of transposing the transferee as the company which had to be assessed. Instead, the original assessee was described as one in existence and the order mentioned the transferee's name below that of the original assessee. The Division Bench adverte....
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....tated or declared by this Court in its order shall attract applicability of Article 141 of the Constitution. The reasons assigned by this Court in its order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away the jurisdiction of any other court, tribunal or authority to express any opinion in conflict with or in departure from the view taken by this Court because permitting to do so would be subversive of judicial discipline and an affront to the order of this Court. However this would be so not by reference to the doctrine of merger." 27. The submission however which has been urged on behalf of the Revenue is that a contrary position emerges from the decision of the Delhi High Court in Skylight Hospitality LLP which was affirmed on 6 April 2018 by a two judge Bench of this Court consisting of Hon'ble Mr Justice A K Sikri and Hon'ble Mr Justice Ashok Bhushan. In assessing the merits of the above submission, it is necessary to extract the order dated 6 April 2018 of this Court: "In the peculiar facts of this case, we are convinced that wrong name given in the notice was merely a clerical error which could be correct....
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....iled without prejudice reply/letter dated 11.04.2017. They had objected to the notice being issued in the name of the Company, which had ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s. Skylight Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused." 28. The decision in Spice Entertainment was distinguished with the following observations: "19. Petitioner relies on Spice Infotainment Ltd. v. Commissioner of Service Tax, (2012) 247 CTR 500. 25 Spice Corp. Ltd., the company that had filed the return, had amalgamated with another company. After notice under Section 147/148 of the Act was issued and received in the name of Spice Corp. Ltd., the Assessing Officer was informed about amalgamation but the Assessment Order was passed in the name of the amalgamated company and not in the name of amalgamating company. In the said situation, the amalgamating company had filed an appeal and issue of validity of Assessment Order....
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....ich led the court to accept the finding that the wrong name given in the notice was merely a technical error which could be corrected 36 Civil Appeal No. 285 of 2014 and connected cases 37 Special Leave Petition No. 7409 of 2018 27 under Section 292B. Thus, there is no conflict between the decisions in Spice Enfotainment on the one hand and Skylight Hospitality LLP on the other hand. It is of relevance to refer to Section 292B of the Income Tax Act which reads as follows: "292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued 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 reason 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 proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act." In this case, the notice under Section 143(2) under which jurisdiction was assumed by the assessing officer was issued to a non-existent comp....
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....rovisions of this section. Explanation.-For the purposes of this section, "income" includes any gain accruing from the transfer, in any manner whatsoever, of the business or profession as a result of the succession" Now, in the present case, learned Counsel appearing on behalf of the respondent submitted that SPIL ceased to be an eligible assessee in terms of the provisions of Section 144C read with clause (b) of sub section 15. Moreover, it has been urged that 29 in consequence, the final assessment order dated 31 October 2016 was beyond limitation in terms of Section 153(1) read with Section 153 (4). For the purposes of the present proceeding, we do not consider it necessary to delve into that aspect of the matter having regard to the reasons which have weighed us in the earlier part of this judgment. 32. On behalf of the Revenue, reliance has been placed on the decision of this Court in Commissioner of Income Tax, Shillong v Jai Prakash Singh (1996) 3 SCC 525 ("Jai Prakash Singh"). That was a case where the assessee did not file a return for three assessment years and died in the meantime. His son who was one of the legal representatives filed returns upon which the assess....
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.... filed by one of the legal representatives to whom notices were issued under Section 142(1) and 143(2). No objection was raised by the legal representative who had filed the return that a notice should also to be served to other legal representatives of the deceased assessee. No 40 (1943) 11 ITR 202 (Bombay) 31 objection was raised before the assessing officer. Similarly, the decision in Maharaja of Patiala was a case where the notice had been served on the legal representative, the successor Maharaja and the Bombay High Court held that it was not void merely because it omitted to state that it was served in that capacity. 33. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the fie....