INCOME TAX ACT, 1961

Section 143(3)

Assessment - Validity - Assessment in name of non-existent entity - Entity ceased to exist by virtue of approved scheme of amalgamation

Assessee-company filed return of income and assessment was framed under section 143(3). Subsequently, on receipt of information, the assessment was reopened after recording reason that income chargeable to tax had escaped assessment. Accordingly, the AO passed reassessment order, wherein he made addition under section 68. It was contended on behalf of the assessee that the AO erred in framing the order under section 143(3) in the name of non-existent entity as the assessee was merged with a company 'V', and accordingly, the said order was not sustainable in law and as such, reassessment proceedings and consequent reassessment order passed by the AO was liable to be quashed. Held: Assessee-company was merged with the company 'V' with effect from 1-4-2013 and assessment in case of the assessee was framed by AO on 28-12-2016. Further, even at the time of issuance of notice under section 148, the assessee was not in existence. Therefore, as the assessee ceased to exist by virtue of approved scheme of amalgamation with effect from 1-4-2013, the AO was not within his jurisdiction to frame assessment in the name of non-existent entity and such assessment order, dated 28-12-2016 was nullity and not sustainable in the law. Consequently, the reassessment order passed by Revenue was also quashed.

Distinguished:Pr. CIT v. M/s. I-Ven Interactive Ltd. (2019) 418 ITR 662 (SC) : 2019 TaxPub(DT) 7063 (SC)

REFERRED : Pr. CIT v. Maruti Suzuki India Ltd. [C.A. No. 5409 of 2019, dated 25-7-2019] : 2019 TaxPub(DT) 4931 (SC), Nirvana Lifestyle (P) Ltd. v. ACIT [ITA No. 4793/Del/2017 Order, dated 9-3-2018], Spice Enfotainment Ltd. v. CIT [Printed as: Spice Entertainment Ltd. v. CST] [ITA 475 & 476 of 2011, dated 3-8-2011], CIT v. M/s. Spice Enfotainment Ltd. 2017 TaxPub(DT) 4831 (SC)

FAVOUR : In assessee's favour.

A.Y. : 2009-10

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