The Tax PublishersITA No. 4182/Del/2017
2022 TaxPub(DT) 0053 (Del-Trib)INCOME TAX ACT, 1961
Section 153A Section 143(3)
Where pursuant to a search and seizure operations, assessee was subjected to assessment under section 153A read with section 143(3) and on assessee's revision application under section 264, Pr. CIT quashed assessment and directed AO to reassess the income in the hands of the existing correct legal entity, thereafter even after such directions, order passed by AO in name of non-existing company as the company had ceased to exist after its amalgamation, was liable to be quashed.
|
Search and seizure - Validity of assessment under section 153A - AO passed order in name of non-existing company even though the same was amalgamated with another company -
Pursuant to a search and seizure operations carried out in certain group of cases (S), covering assessee also under section 132/133A, assessment was completed under section 153A read with section 143(3). Assessee preferred revision application under section 264. Pr. CIT quashed assessment made by AO holding that he passed an order in name of a non-existent company. Pr.CIT directed AO to reassess the income in the hands of the existing correct legal entity after giving proper opportunity of being heard. Pursuant to such directions, AO passed order on name of Pride Residency (P) Ltd. (in case of SPN Milk Products Industries Pvt. Ltd. On further appeal, CIT(A) quashed the order holding that AO failed to follow directions of Pr. CIT and completed assessment in hands of a non-existing company. Held: There was no fault with CIT(A) in following the decision of the Apex Court in Saraswati Industrial Syndicate Ltd. When two companies amalgamated merged into one, the transfer company loses its entity as it serious to have its business, and their respective rights are liable to be determined under the scheme of amalgamation, but the corporate entity of the transfer company ceases to exist with effect from the date of the amalgamation is made effective. Assessee specifically brought it to the notice of the AO that there was a merger of the companies, and there was a direction of Pr. CIT to issue notice to correct existing legal entity. However, there was failure on the part of AO to comply with the said direction, inasmuch as he issued notices to the non-existent company and completed the assessment on it.
Followed:Saraswati Industrial Syndicate Ltd. v. CIT (1990) 186 ITR 278 (SC) : 1990 TaxPub(DT) 1328 (SC)and Asstt. CIT v. Pride Residency (P) Ltd. 2019 TaxPub(DT) 8312 (Del-Trib). Distinguished:Sky Light Hospitality LLP v. Asstt. CIT (2018) 405 ITR 296 (Delhi) : 2018 TaxPub(DT) 762 (Del-HC).
REFERRED : Pr. CIT v. Maruti Suzuki India Ltd. (Successor of Suzuki Powertrain India Ltd.) (2017) 397 ITR 681 (Del-HC) : 2017 TaxPub(DT) 4371 (Del-HC), CIT v. Dimension Apparels Pvt. Ltd. (2015) 370 ITR 288 (Del) : 2014 TaxPub(DT) 4172 (Del-HC), Satkar Fin Cap Ltd. & SM Entrepreneur India Pvt. Ltd. and Smart Tradeline Pvt. Ltd. and Pride Residency Pvt Ltd. 2013 TaxPub(CL) 170 (Del-HC), Spice Enfotainment Ltd. v. CIT 2012 TaxPub(EX) 723 (Del), CIT v. Harjinder Kaur (2009) 222 CTR (P&H) 254 : 2009 TaxPub(DT) 1289 (P&H-HC), Sri Nath Suresh Chand Ram Naresh v. CIT (2006) 280 ITR 396 (All) : 2006 TaxPub(DT) 130 (All-HC), CIT v. Norton Motors (2005) 275 ITR 595 (P&H) : 2005 TaxPub(DT) 1011 (P&H-HC) and CIT v. Spice Enfotainment Ltd. 2017 TaxPub(DT) 4831 (SC).
FAVOUR : In assessee's favour.
A.Y. :
 SUBSCRIBE FOR FULL CONTENT
|