TaxTMI 
TaxTMI 
2022 (2) TMI 483
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....lained that the assessee filed its return of income for the relevant assessment year 2006-07 on 11.11.2006 and the same was processed u/s. 143(1) of the Act on 02.08.2007. Subsequently, the assessee's case was selected for scrutiny assessment and notice u/s. 143(2) of the Act was issued on 26.10.2007. The assessee filed its return of income in the name of existing company at that point of time i.e., Meridian Industries Limited. The assessee company merged with M/s. Precot Mills Limited and was known as Precot Meridian Limited by the amalgamation order passed by Hon'ble High Court of Madras dated 01.09.2006 by specifically stating that the transferor company viz., Meridian Industries Limited be and hereby dissolved and company wound up. The assessee filed copy of the order of Hon'ble High Court amalgamating the assessee company with the Precot Mills Limited by virtue of which it was named as Precot Meridian Ltd., w.e.f. 01.04.2006. The copy of the said order was filed with the AO on 01.11.2006. The copy of this letter is enclosed in assessee's paper-book at page-1 and this was filed with ACIT, Company Circle 1(2), Coimbatore. As per the office noting of the Income Ta....
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....ng substantial question of law:- "1. Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal is right in holding that the issue relating to the validity of assessment as premature in nature when infact, it ought to have been decided first before setting aside the matters relating to additions and disallowances made in the assessment back to the file of the Assessing Officer? 2. Whether in the facts and circumstances of the case, the assessment made in the hands of the non-existent company i.e., M/s. Meridian Industries Ltd. is valid in the eyes of the law since M/s. Meridian Industries Ltd. was not in existence when the assessment proceedings were initiated and completed and the fact of amalgamation was also brought to the notice of the learned Respondent even before the initiation of scrutiny assessment proceedings?" The ld. counsel stated that this Tax Case Appeal No. 592 of 2011 filed in November, 2011 is still pending but not admitted yet. However, he stated that this is only numbered as Tax Case Appeal No. 592 of 2011. The ld. counsel further stated that the AO to give effect to the Tribunal order in ITA No. 885/Mds/2009, orde....
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....sment proceedings. The assessee before first appellate proceedings during original round of litigation also raised this ground and the fact was brought to the notice of CIT(A) that the assessee company had merged with the Precot Mills Ltd., to be known as Precot Meridian Ltd., vide amalgamation order of the Hon'ble High Court of Madras dated 01.09.2006 merging w.e.f. 01.04.2006. In this letter, Hon'ble Madras High Court has subsequently recorded the fact that "the transferor company viz., Meridian Industries Limited be and hereby dissolved and company wound up". The assessee filed a copy of this order before the AO as well as before the CIT(A) and before Tribunal in first round and even during second round of litigation. But all the authorities below have passed the order not adjudicating the issue or adjudicating the issue on superficial ground ignoring the fact that the company is not in existence. The ld. counsel for the assessee subsequently referred to the findings recorded by the CIT(A) in first round vide para 5.2 as under:- 5.2 The submissions the appellant-company/Id. AR (supra) have been carefully considered. In the instant case, the relevant record shows....
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....cision of Hon'ble Supreme Court in the case of PCIT vs. Maruti Suzuki Ltd., 416 ITR 613. The ld. counsel for the assessee took us through the case law, para 31 of the assessee's paper-book page 13 and read out relevant portion, wherein the Hon'ble Supreme Court held that "notice u/s. 143(2) under which jurisdiction was assumed by the Assessing Officer was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B". The Hon'ble Supreme court has also considered the provision of section 170 of the Act and stated that "it is necessary to advert to the provisions of section 170 which deal with succession to business otherwise than on death". The Hon'ble Supreme Court considered this issue as under:- "In this case, the notice u/s. 143(2) under which jurisdiction was assumed by the Assessing Officer was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B. ....
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....eriously conceded the above averments of the ld. counsel. In view of the decision of CIT(A) that the issue of assessment on non-existent company is not adjudicated and has confession given by both the sides, we are setting aside the order of CIT(A) and remand the matter back to his file for fresh adjudication, first on the issue of jurisdiction i.e., assessment on non-existent company and second after that on merits. In term of the above, the order of CIT(A) is set aside and the matter remanded back to his file. 8. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the court on 31st January, 2022 at Chennai. ============= Document 1 PRECOT MERIDIAN MAN. 2262/mds/08 134--005-06 fled by CIT(OR), (CFDL) 327 01.12.06 RANGE- The Assistant Commissioner of Inces Tax Company Circle I (2) Coimbatore. pl. Update the case Elcords Dear Sir, This has reference to Meridian Industries Limited (MIL) which is presently assessed at your circle under PAN AABCM4719N. We would like to inform you that Meridian Industries has been merged with our company formerly Precot Mills Ltd....