INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Assessment completed on a non-existent company - Issuance of notice by non-jurisdictional AO

Assessee filed appeal against reassessment order passed under section 147 on the ground of being without jurisdiction as assessment was completed on a non-existent company and issuance of notice under section 148 was by non-jurisdictional AO. Held: It is a settled law that upon a scheme of amalgamation being sanctioned, the amalgamating company ceased to exist in the eyes of law and it cannot be regarded as a 'person' in terms of section 2(31) and consequently no assessment proceeding can be initiated or an assessment order can be passed. Further, AO had not validity assumed the jurisdiction to initiate the reassessment proceedings as he had merely followed the reasons recorded by AO, who had no jurisdiction over the assessee. Thus, reassessment proceedings initiated against the assessee needs to be quashed.

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2001-02 & 2002-03

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