TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1090
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....gs and materials impounded, it transpired that the assessee had sold it immovable property M/s. Lakshmi Machine Works Ltd. for a total consideration of Rs..8.52 crores. Based on the findings of the survey and the materials unearthed during the proceedings, notice under section 148 of the Act was issued since there was reason to believe that the income chargeable to tax had escaped assessment within the meaning of provisions of section 147 of the Act. In response to the notice issued by the Assessing Officer under section 148 of the Act on 20.01.2015, the assessee filed its return of income on 29.10.2015 admitting total income of Rs..91,42,410/- M/s. IRIS Engineering Industries Pvt. Ltd. Subsequently, notice under section 143(2) of the Act was issued on 12.11.2015 and in response thereto, Shri S. Prabhu, FCA appeared and submitted the details called for. In response to that, the assessee filed a letter dated 14.03.2016 before the Assessing Officer wherein, it has been stated that M/s. IRIS Engineering Industries Pvt. Ltd. merged with M/s. Ravilla Aerospace Industries P. Ltd. Power of attorney filed by Shri S. Prabhu, FCA on 23.03.2016 subsequent to the above letter representing M/s.....
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.... office since many litigations were pending in this matter already. Therefore we decided to wait till the final outcome of these cases to be known and then go ahead with the registration process. b. Further both the companies were facing severe cash loss situations and did not have enough funds for registration of the properties, c. Further the registration of the agreement was not compulsory at the point of time in Tamilnadu. d. Further both the companies were having the plans of getting merged into one single company and therefore did not want to spend unnecessarily on the stamp duty expenses. Both the companies have since then merged and have become one single company." 2.3 After considering the above explanation of the assessee and by observing that since the assessee company and the Ravilla Aerospace Industries P. Ltd. have merged subsequently and also the fact that the assessee has admitted sale consideration on the land sold to M/s. Lakshmi Machine Works Ltd., after examining the details filed, the Assessing Officer has accepted the income returned and completed the assessment under section 147 r.w.s. 143(3) of the Act dated 24.03.2016. 3. Subsequently, the ld. P....
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..../c), Coimbatore, is unsustainable in law and in the facts and the circumstances of the case." 5. The ld. Counsel for the assessee has submitted that the assessment order passed by the Assessing Officer dated 24.03.2016 for a non existing entity in view of the assessee company amalgamated with M/s. Ravilla Aerospace Industries P. Ltd. w.e.f. 01.04.2015 and thus the assessment order passed by the Assessing Officer is void ab initio and consequent to the assessment order, the revision order passed under section 263 of the Act is also ab initio void and not valid. 6. On the other hand, the ld. DR has submitted that the assessee has not filed any return of income and there was a survey under section 133A of the Act and also it was found that there is escapement of income based on the seized materials. Therefore, notice under section 148 of the Act have been issued in the name of M/s. IRIS Engineering Industries Pvt. Ltd. dated 20.01.2015. In response to the notice, the assessee company filed its return of income on 29.10.2015 admitting total income of Rs..91,42,410/- in the name of M/s. IRIS Engineering Industries Pvt. Ltd. only. Subsequently, based on the reply given by the assessee....
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....vt. Ltd. 6.2 The ld. DR further submitted that the effective date of merger shall be the date on which the certified copies of the order of the Hon'ble High Court sanctioning this Scheme are filed with the Registrar of Companies, Tamil Nadu, Coimbatore by the Transferor Company and Transferee Company. When this certified copies of the Hon'ble High Court sanctioning the scheme are filed before the Registrar of Companies are not filed before the Assessing Officer nor submitted in this regard and therefore, the Assessing Officer was unaware the fact that from which dates onwards, the assessee company is amalgamated with M/s. Ravilla Aerospace Industries Pvt. Ltd. Therefore, the Assessing Officer has rightly passed the assessment order in the name of the assessee company M/s. IRIS Engineering Industries Pvt. Ltd. 7. In reply, the ld. Counsel for the assessee has submitted that in para 4 of the assessment order, the Assessing Officer has categorically noted that the assessee and M/s. Ravilla Aerospace Industries Pvt. Ltd. have merged subsequently. Therefore, the Assessing Officer is aware that the assessee company has merged with M/s. Ravilla Aerospace Industries Pvt. Ltd. Therefore, ....
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....is order for the reason that the Assessing Officer has considered the submissions of the assessee that the assessee company is planning to merge with another company. The same is considered and the claim of exemption under section 54G of the Act in the name of M/s. IRIS Engineering Industries Pvt. Ltd. 9. The Hon'ble Madras High Court has passed the sanction of amalgamation between M/s. IRIS Engineering Industries Pvt. Ltd. and M/s. Ravilla Aerospace Industries P. Ltd. by order dated 10.03.2016. The Hon'ble High Court has already mentioned that appointed date is from 01.04.2015. It is crucial to note here that the Hon'ble High Court has clearly mentioned that effective date means, the date on which the scheme shall become effective, which shall be date or the last of the dates on which certified copies of the Order of the Hon'ble High Court sanctioning this Scheme are filed with Registrar of Companies, Tamil Nadu, Coimbatore by the Transferor Company and Transferee Company. The assessee has not filed any details in respect of effective date i.e., when the transferor Company and Transferee Company have filed certified copies of order the Hon'ble High Court in respect of sanctioning....
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....ment of the ld. Counsel is rejected. 13. So far as case law relied upon is concerned, decision of the Hon'ble Supreme Court in the case of PCIT v. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375 (SC), the Hon'ble Supreme Court has held that 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 assessee in the circumstances cannot operate as estoppels against law. This position now holds the filed in view of the judgement of a coordinate Bench of two Ld. judges which dismissed the appeal of the Revenue in CIT v. Spice Enfotainment in Civil Appeal No. 285 of 2014, dated 02.11.2017. The decision in Spice Enfotainment Ltd. (supra) has been followed in the case of the respondent while dismissing the Special Leave Petition for the assessment year 2011-12. In doing so, this Court has relied on the decision i....
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....d the assessment order in the name of the assessee M/s. IRIS Engineering Industries Pvt. Ltd. 15. So far as case law relied on by the assessee in the case of Aishwarya Rai Bachchan v. PCIT [2022] 135 taxmann.com 335, wherein, the Tribunal has held that when the assessment framed by the Assessing Officer is unsustainable in the eyes of law, the said invalid and illegal order cannot be subject matter of section 263 proceedings and deserves to be quashed. This case law has no application to the facts of the present case for the reason that in the present case, the assessment order is a valid assessment order. The Assessing Officer after issuing correct jurisdictional notice to the assessee and by considering the reply of the assessee, he has passed the assessment order. Therefore, the assessment order is a valid assessment order. 16. In the case of Tidewater Marine International Inc. V. DCIT (2005) 97 TTJ 137 (Del), the Delhi Benches of the Tribunal has held that the penalty under section 271(1)(c) of the Act could not be sustained where the assessment proceedings in the case of the assessee was without jurisdiction on account of the fact that notice under section 148 of the Act was....
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....t it is an invalid on the ground that the ld. PCIT exercised power under section 263 of the Act to an invalid assessment order. 20. The ld. Counsel for the assessee has raised an alternative ground that the notice issued by the ld. PCIT dated 30.01.2018 as invalid notice because he has not satisfied that for what purpose a notice is issued by the ld. PCIT and therefore, the order passed under section 263 of the Act has to be quashed. 21. On the other hand, the ld. DR has submitted that the notice issued by the ld. PCIT dated 30.01.2018 is a valid notice and the ld. PCIT has recorded satisfaction in the notice itself as the Assessing Officer has not examined the claim of deduction under section 54G of the Act and simply accepted and the Assessing Officer has incorrectly allowed the claim of exemption under section 54G of the Act. 22. We have heard both the sides and perused the records. In so far as the ld. Counsel's primary objection that the notice issued by the ld. PCIT is invalid, we have gone through the notice and find that the ld. PCIT has satisfied that the Assessing Officer has not examined the claim of the assessee under section 54G of the Act and allowed the same incor....
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....u/s 54G [Investment in land] : Rs.. 7,52,00,000 Balance LTCG : Rs.. 98,92,494 The assessee also filed a letter dated 14.03.2016 before the Assessing Officer explaining ion support of claim of deduction under section 54G of the Act, which is reproduced as under: Dated 14.03.2016 From Iris Engineering Industries Private Limited, (now merged with Ravilla Aerospace Industries Private Limited) No. 48, Aerodrome Road, Singanallur Post, Coimbatore 45. To, The DCIT, Corporate CIR -II, Income Tax Office, Coimbatore. Dear Sir, Sub: Reply to query raised by your office in course of Scrutiny Assessment for the A.Y. 2012-13 - reg. With reference to the above said subject, we would like to submit to you that during the year 2012-13 we had purchased land from our parent company M/s. Ravilla Aerospace Industries Private Limited. We had entered into a sale agreement with them and paid the consideration in full and had taken the legal and physical possession of the land. We have not registered the land due to the following reasons, a. Since we were a subsidiary company of M/s. Ravilla Aerospace Industries P. Ltd. there is a notification in the Tamil Nadu St....