M/s. Satwant Exports Pvt. Ltd., New Delhi v. ACIT, New Delhi

ITA 5340/DEL/2013 | 2003-2004
Pronouncement Date: 11-04-2014 | Result: Allowed

Appeal Details

RSA Number 534020114 RSA 2013
Assessee PAN AAHCH8530R
Bench Delhi
Appeal Number ITA 5340/DEL/2013
Duration Of Justice 6 month(s) 11 day(s)
Appellant M/s. Satwant Exports Pvt. Ltd., New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 11-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 11-04-2014
Assessment Year 2003-2004
Appeal Filed On 30-09-2013
Judgment Text
1 INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCHES NEW DELHI G BENCH BEFOR SHRI S.V. MEHROTRA ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH JUDICIAL MEMBER ITA NO. 5340 TO 5345/DEL/2013 A.Y.RS. 2003-04 TO 2008-09 M/S SATWANT EXPORTS PVT. LTD. (AMALGAMATED WITH JPL HOTEL & RESIDENCES PVT. LTD.) A-283 1 ST FLOOR OKHLA INDUSTRIAL AREA PHASE-I NEW DELHI -1 11020 VS. ACIT CENTRAL CIRCLE -21 NEW DELHI DATE OF HEARING 31.03.2014 DATE OF PRONOUNCEMENT 11.04.2014 ASSESSEE BY: SHRI KAPIL GOYAL REVENUE BY : SHRI RAMESH CHANDRA CIT(DR) ORDER PER JOGINDER SINGH: JM THIS BUNCH OF SIX APPEALS IS BY THE ASSESSEE AGAI NST DIFFERENT ORDERS DATED 19.8.2013 (A.YRS. 2003-04 & 2004-05) & 20.8. 013 A.YRS. 2005-06 TO 2008- 2 09) OF THE LD. FIST APPELLATE AUTHORITY NEW DELH I WHEREIN FOLLOWING COMMON GROUNDS HAVE BEEN RAISED:- 1. THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE T HAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND THE PROVISIONS O F THE LAW THE PROCEEDING INITIATED UNDER SECTION 153C IS ILLEGAL BAD IN LAW WITHOUT JURISDICTION AS SUCH THE ASSESSMENT ORDER PASSED IN CONSEQUENCE THEREOF IS ILLEGAL BAD IN LAW WITHOUT JURISDICTION AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2. THAT IN VIEW OF THE FACTS AND THE CIRCUMSTANCES ISSUANCE OF NOTICE U/S. 153C AND CONSEQUENT ASSESSMENT ORDER IS ILLEGA L BAD IN LAW TIME BARRED AND WITHOUT JURISDICTION AND FURTHER FAI LED TO APPRECIATE THAT THE ASSESSMENT SO FRAMED IS AGAINST THE SCHEM E OF THE ACT AND FURTHER THE ADDITIONS ARE NOT BASED UPON ANY INCRI MINATING MATERIAL FOUND DURING SEARCH. 3. THAT THE LD. CIT(A) FAILED TO APPRECIATE THAT IN ITIATION OF PROCEEDINGS U/S. 153C INCLUDING ISSUE OF NOTICE AND CONSEQUE NT COMPLETION OF ASSESSMENT ON THE COMPANY WHICH HAS ALREADY BECOME NON-EXISTENT ON ACCOUNT OF ITS MERGER WITH OTHER COMPANY IS ILLE GAL BAD IN LAW AND AS SUCH DESERVES TO BE QUASHED. 4. THAT THE LD. CIT(A) FAILED TO APPRECIATE THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE AO HAS ERRED BOTH O N FACTS AND IN LAWS IN USING THE STATEMENTS OF VARIOUS PERSONS AGA INST THE ASSESSEE WITHOUT PROVIDING OPPORTUNITY TO CROSS EXAMINATION AND CONSIDERING RETRACTION LETTER. 3 5. THAT THE LD. CIT(A) FURTHER ERRED IN LAW AND O N FACTS IN HOLDING THAT THE AUDITED BOOKS AND TRANSACTIONS THROUGH BANK NOT WITHSTANDING THE BOOKS RESULT REQUIRED TO BE REJECTED WHEN THE EN TRIES ARE ARTIFICIAL SHAME AND NOT REFLECTIVE OF ACTUAL BUSI NESS / COMMERCIAL TRANSACTIONS AND FURTHER FAILED TO APPRECIATE VARIO US OBSERVATIONS AND FINDINGS OF THE LD. AO 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE INTEREST HAS BEEN WRONGLY CHARGED U/S. 234A AND 234B AND IS ALSO HIGH LY EXCESSIVE. 3. DURING HEARING OF THESE APPEALS WE HAVE HEARD SH . KAPIL GOYAL LD. COUNSEL FOR THE ASSESSEE AND SHRI RAMESH CHANDRA LD. CIT(D R). BROADLY THE ASSESSEE HAS CANVASSED ON GROUND NO. 5 IN THE GROUNDS OF APPEAL FOR THE ASSESSEE (GROUND NO. 3 HEREINABOVE) BY SUBMITTING THAT INITIATION OF PRO CEEDINGS U/S. 153C INCLUDING ISSUE OF NOTICE AND CONSEQUENT ASSESSMENT IS ILLEGA L AS THE ASSESSEE COMPANY HAD ALREADY AMALGAMATED WITH JP HOTEL AND RESIDENCES PV T. LTD.. TO SUPPORT HIS CLAIM THE LD. COUNSEL PLACED RELIANCE UPON THE DECISION IN THE CASE OF ACIT VS. MICRA INDIA PVT. LTD. (ITA NO. 1060-1065/DEL/2012) ACIT VS. SPN MILKS PRODUCTS INDUSTRIES PVT. LTD. (ITA NO. 565/DEL/2012 TO 570/D EL/2012) ACIT VS. DIMENSION APPARELS PVT. LTD. (ITA NO. 571 TO 576/DEL/2012 ETC .) DECISION FROM HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VIVID MARKETING S ERVICING PVT. LTD. (ITA NO 273 OF 2009) SPICE ENTERTAINMENT LTD. VS. CIT (ITA NO. 4 75 OF 2011 ORDER DATED 88.2011) COPY OF THE DECISION FROM HONBLE KOLKATA HIGH COURT IN I.K. AGENCIES PVT. VS. CWT HONBLE GUJARAT HIGH COURT IN KHURANA ENGINEERING LTD. VS. DCIT (SCA NO. 605 OF 2013) TRRENT PRIVATE LTD. VS. CIT (SCA NO. 5857 OF 2004) AND ANOTHER DECISION FROM DELHI BENCH OF THE TRIBUNAL IN THE CASE OF IMPAST (P) LTD. 4 VS. ITO 276 ITR 136. THE ASSESSEE HAS ANNEXED THE PHOTOCOPIES OF THESE DECISIONS. 3.1 ON THE OTHER HAND THE LD. CIT(DR) SHRI RAMESH CHANDRA DEFENDED THE IMPUGNED ORDERS BY CANVASSING THAT THE ASSESSEE FIL ED ITS RETURN IN THE NAME OF SATWANT EXPORTS PVT. LTD. ITSELF THE DECISIONS REL IED UPON BY THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT APPEALS. IT WAS ALSO ASSERTED THAT AS CLAIMED BY THE ASSESSEE IF THE ENTITY WAS NOT IN EXISTENC E WHERE WAS THE NEED TO ATTEND THE PROCEEDINGS AND EVEN THE ASSESSEE NEVER RAISED ANY OBJECTION. THE ASSESSMENT SO FRAMED WAS DEFENDED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF ARE THAT T HE ASSESSEE COMPANY FILED ITS RETURN FOR ASSTT. YEAR 2003-04 U/S. 139(1) OF THE I NCOME TAX ACT 1961. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF T EXTILE AND FABRICS. THE ASSESSMENT WAS FRAMED U/S. 153C / 143(3) OF THE I.T . ACT VIDE ASSESSMENT ORDER DATED 31.12.2010 ASSESSING THE INCOME AT RS. 36 95 920/- AGAINST NIL INCOME. THE LD. AO DISALLOWED THE PURCHASES OF RS. 32 01 856/- BY TREATING THE PURCHASES AS UNEXPLAINED/ UNACCOUNTED UNDER SECTION 69C OF THE I .T. ACT. AS PER THE ASSESSEE THE ASSESSEE COMPANY MADE SALE OF TEXTILE GOODS OF RS. 36 70 914/- AND CREDIT THE SAME TO THE PROFIT AND LOSS ACCOUNT AS AN INCOME. THE CRUX OF ARGUMENT ON BEHALF OF THE ASSESSEE IS THAT BEFORE FRAMING THE A SSESSMENT THE ASSESSEE COMPANY HAD ALREADY AMALGAMATED WITH M/S JP HOTELS AND RESIDENCES PVT LTD. THEREFORE NO ASSESSMENT CAN BE FRAMED ON AN ENTIT Y WHICH IS NO MORE IN EXISTENCE. WHEREAS THE SUM AND SUBSTANCE OF THE ASS ERTION MADE ON BEHALF OF THE REVENUE IS THAT THE ASSESSEE FILED THE RETURN IN TH E NAME OF M/S SATWANT EXPORTS 5 PVT. LTD. AND EVEN ATTENDED THE PROCEEDINGS WITHOUT RAISING THE OBJECTION. THEREFORE THE ADDITION WAS RIGHTLY MADE. 5. WE NOTE THAT SEARCH AND SEIZURE OPERATION U/S. 1 32 OF THE ACT WAS CARRIED OUT IN THE CASES OF SHRI B.K. DHINGRA SMT. POONAM DHINGRA AND MRS. MADHUSUDAN BUILDCON PVT LTD. ON 20.10.2008 WHEREIN CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE WERE SEIZED. ON THE BASI S OF DOCUMENTS FOUND BELONGING TO THE ASSESSEE PROCEEDINGS WERE INITIATE D U/S. 153C R.W.S. 153A AGAINST THE ASSESSEE. THE CASE OF THE ASSESSEE WAS INITIALLY WAS CENTRALIZED WITH ACIT CC-17 NEW DELHI U/S. 127 OF THE ACT BY THE L D. COMMISSIONER VIDE ORDER DATED 29.10.2010. NOTICE U/S. 153C OF THE ACT DATED 14.9.2010 WAS ISSUED TO THE ASSESSEE REQUIRING THE ASSESSEE TO FILE ITS RETURN WITHIN THE STIPULATED PERIOD. THE CASE WAS SUBSEQUENTLY TRANSFERRED TO CC-21 NEW DEL HI BY AN ORDER U/S. 127 ON 19.10.2010. IN RESPONSE TO THE NOTICE U/S. 153C AS SESSEE FILED THE RETURN ON 3.11.2010 FOR ASSTT. YEAR 2003-04 DECLARING NIL INCOME. AS PER THE REVENUE COPY OF THE PANCHNAMA REASONS FOR ISSUING NOTICE U /S. 153C AND JURISDICTION ORDER DATED 19.10.2010 U/S. 127 WERE DISPATCHED TO THE AS SESSEE ON 10.11.2010 AS SOUGHT BY THE ASSESSEE. NOTICES U/S. 142(1) /142(3 ) DATED 10.11.2010 ALONGWITH DETAILED QUESTIONNAIRES WERE ISSUED AND SERVED UPON THE ASSESSEE FIXING THE CASE FOR 19.11.2010 TO WHICH THE AUTHORIZED REPRESENTATI VE OF THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS FROM TIME TO TIME AND FU RNISHED CERTAIN DETAILS ALONGWITH BOOKS OF ACCOUNTS AND OTHER INFORMATION. THE ASSESSEE COMPANY BELONGS TO THAPAR GROUP OF CASES AND ONE OF THE ALL EGATIONS AGAINST THE GROUP IS THAT SEVERAL CONCERNS WERE FLOATED BY THIS GROUP WI TH DUMMY DIRECTORS AND SHARE HOLDERS WITH THE INTENTION OF BASICALLY CAPITAL FO RMATION WHICH HAVE BUILD UP HUGE RESERVES AND SURPLUS OVER THE YEARS. THESE RESERVE S AND SURPLUS WERE DECLARED 6 INVESTED IN STOCKS OF TEXTILE. AND AS AND WHEN CASH WAS REQUIRED THE STOCKS WERE SOLD AND THE MONEY WAS UTILIZED FOR OTHER PURPOSES AS REQUIRED. THE COMPANY WAS INCORPORATED ON 13.8.1996 AND HAS BEEN FILING I TS RETURN REGULARLY. AS PER THE REVENUE THE ASSESSEE DECLARED CLOSING STOCK OF RS. 6 47 90 139/- AS ON 31.3.2002 WHICH FORMS REOPENING STOCK FOR THE PREVIOUS YEAR U NDER CONSIDERATION. DURING THIS CURRENT YEAR THE ASSESSEE PURCHASED TEXTILE G OODS WORTH RS. 32 01 856/- AND MADE SALES OF RS. 36 70 914/-. THE ASSESSEE WAS A SKED TO PROVED ITS TRADING ACTIVITIES ALONGWITH THE PROOF OF SALES TAX RECORDS . THE ASSESSEE CLAIMED THAT SINCE IT DEALS WITH TAX FREE GOODS THERE WAS NO NEC ESSITY FOR IT TO FILE ITS SALES TAX RETURN. AS PER THE REVENUE EXCEPT THIS DECLARATION THERE WAS NO INDEPENDENT PROOF OF SALE/PURCHASE OF THE GOODS EXCEPT THE BANK TRANSACTIONS. DURING ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO GI VE BREAK UP OF CASH / CHEQUE PURCHASES. IN REPLY THE ASSESSEE DECLARED THE PURC HASES OF RS. 13 12 500/- IN CASH AND FURTHER CLAIMED THAT THE ASSESSEE DID NOT MAINTAIN ANY BANK ACCOUNT DURING THE YEAR. 6. PURSUANCE TO NOTICE ISSUED U/S. 153C OF THE ACT BY THE DEPARTMENT THE ASSESSEE VIDE LETTER DATED 17.9.2010 (PAGE 3 OF THE PAPER BOOK) INFORMED THE DEPARTMENT THAT SATWANT EXPORTS PVT. LTD. I.E. T HE ASSESSEE HAS BEEN AMALGAMATED WITH JPL HOTELS AND RESIDENCES PVT. LTD . U/S. 391 & 394 OF THE COMPANIES ACT 1956 VIDE ORDER DATED 3.9.2009 BY TH E HONBLE DELHI HIGH COURT CONSEQUENTLY THE NOTICES ARE ILLEGAL AND WITHOUT JU RISDICTION. THE ASSESSEE ALSO INFORMED THAT THE NOTICES IF ANY CAN BE ISSUED TO THE AMALGAMATED COMPANY HAVING ITS REGISTERED OFFICE AT D-7/7474 VASANT KU NJ NEW DELHI. THE COPY OF THE ORDER DATED 3.9.2009 PASSED BY THE HONBLE DELHI HI GH COURT U/S. 394 OF THE COMPANIES ACT WAS ANNEXED WITH THE LETTE R DATED 7 17.9.2010. THE SCHEME OF AMALGAMATION OF SATWANT E XPORTS PVT. LTD. WITH JPL HOTELS AND RESIDENCES PVT. LTD. (PAGES 9 TO 17 OF THE PAPER BOOK WAS ALSO ANNEXED WITH THIS LETTER). IT IS PERTINENT TO MEN TION THAT VIDE LETTER DATED 5.5.2010 ADDRESSED TO THE ITO THE ASSESSEE ALSO S URRENDERED THE PAN : AAHCH8530R (PAGE 19 OF THE PB) INFORMING THAT M/S S ATWANT EXPORTS PVT. LTD. (TRANSFEROR COMPANY) HAD MERGED/AMALGAMATED INTO M/ S JPL HOTELS AND RESIDENCES PVT. LTD. (TRANSFEREE COMPANY) W.E.F 1.1 1.2008 (APPOINTED DATE) AND FINAL ORDER TO THIS EFFECT WAS PASSED BY THE HONB LE HIGH COURT ON 3.9.2009. IN THE SAID LETTER IT HAS BEEN MENTIONED THAT M/S SATWANT EXPORTS P LTD. CEASED TO EXIST. 7. AS PER REPORT OF THE DIRECTORS (PAGE 20 E&F OF T HE PB) THE SHARE HOLDERS / MEMBERS WERE INFORMED ABOUT THE MERGER OF M/S SATWA NT EXPORTS P LTD. W.E.F 1.11.2008 AND THE APPROVAL BY THE HONBLE HIGH COU RT VIDE ORDER DATED 3.9.2009. IN THE AUDITORS REPORT ALSO (PAGE 20G&20H OF THE P B) THERE IS A MENTION OF TRANSFEROR COMPANY I.E. M/S SATWANT EXPORTS P LTD. . WE ALSO NOTE THAT VIDE NOTICE U/S. 142(1) DATED 10.11.2010 (PAGE 29 OF TH E PB) THE ASSESSEE WAS ASKED TO FILE THE CORRECT RETURN OF INCOME ALONGWITH QUES TIONNAIRE (PAGES 30 TO 32 OF THE PB). THE ASSESSEE IN TURN OBJECTED AGAINST THE PROCE EDINGS U/S. 153C OF THE ACT (PAGES 33 TO 38 OF THE PB) AND IN PARA 26 (INTERNAL PAGE 6) AGAIN INFORMED THAT THE ASSESSEE HAS AMALGAMATED WITH M/S JPL HOTELS AND RE SIDENCES PVT LTD. PURSUANT TO ORDER FROM THE HONBLE HIGH COURT. THE MAJOR CR ITERIA FOR MAKING THE ADDITION BY THE DEPARTMENT IS THAT THE ASSESSEE USED THE STA TIONERY OF TRANSFEROR COMPANY I.E. M/S SATWANT EXPORTS P LTD. WHILE MAKING A RESP ONSE TO THE NOTICES ISSUED BY THE DEPARTMENT AND ALSO ATTENDED THE PROCEEDINGS. WE ARE NOT AGREEING WITH THIS PROPOSITION OF THE DEPARTMENT FIRSTLY BECAUSE THE NOTICE WAS ISSUED TO M/S SATWANT EXPORTS PVT LTD. AND LEGALLY THE ASSESSEE W AS BOUND TO 8 RESPOND TO THE NOTICES ISSUED TO THE ASSESSEE OTHE RWISE THERE WAS ALL APPREHENSION OF PENAL ACTION/ OTHER ACTION. IT IS N OT THE CASE THAT THE ASSESSEE HIDE SOMETHING RATHER DULY INFORMED THE DEPARTMENT THAT THE ASSESSEE COMPANY HAS ALREADY AMALGAMATED WITH M/S JPL HOTELS AND RES IDENCES P LTD. IT IS ALSO NOTED THAT THE ASSESSEE FILED ITS RETURN UNDER PRO TEST ON 3.11.2010 VIDE RECEIPT NO. 000138 WITH BRIEF NOTE (PAGE 27 OF THE PB). I N THE MONTH OF NOVEMBER 2010 THE ASSESSEE AGAIN INTIMATED THE DEPARTMENT ABOUT T HE AMALGAMATION OF THE ASSESSEE (PAGES 33 TO 38 OF THE PB). THE STAND OF THE ASSESSEE IS FURTHER FORTIFIED VIDE LETTER DATED 29.11.2010 ADDRESSED TO ACIT CC- 21 NEW DELHI IN WHICH IT WAS CONTENDED THAT RETURNS U/S. 153C OF THE ACT FOR ASS TT. YEAR 2003-04 TO 2008-09 HAVE BEEN FILED UNDER PROTEST TO AVOID PROSECUTION AND TO MAKE COMPLIANCE TO THE NOTICES (PAGES. 39 & 40 OF THE PB). 8. HOWEVER BEFORE US THE ASSESSEE HAS CONTENDED GROUND NO. 5 OF THE APPEAL BEFORE THIS TRIBUNAL BY CLAIMING THAT THE SAME IS COVERED IN ITS FAVOUR BY THE DECISION OF THE TRIBUNAL/HONBLE HIGH COURT. WE ARE ACCEPTED TO PERUSE THESE ORDERS ALSO. IN THE CASE OF ACIT VS. MICRA I NDIA PVT. LTD. (ITA NO. 1060 TO 1065/DEL/2012) IDENTICAL ISSUE HAS BEEN DELIBERATED UPON BY THE DELHI BENCH OF THE TRIBUNAL VIDE ORDER DATED 21.9.2012.THE RELEVAN T PORTION OF THE SAME IS REPRODUCED HEREUNDER FOR READY REFERENCE. ..WE FIND FROM THE ORDERS OF THE AUTHORITIES BELO W THAT THE AO IN ITS REPORT TO THE LD. CIT(A) AS MENTIONED IN PARA NO. 16 OF THE FIRST APPELLATE ORD ER HAS ADMITTED THE FACT THAT THE ASSESSEE COMPANY WAS AMALGAMATED WITH M/S DYNAMIC BUILDMART P LTD. 9 DURING THE ASSESSMENT YEAR 2009-10. IN THE ASSESSMENT ORDER PASSED U/S. 153C OF THE I.T. ACT 1961 NAME OF THE TRANSFEREE COMPANY I.E. M/S DYNAMIC BUILDMART P LTD. WAS ALSO MENTIONED. IT A LSO REMAINED ADMITTED FACT THAT NO NOTICE U/S. 143(2)/142(1) OF THE I.T. ACT WAS ISSUED TO M/S DYNAMIC BUILDMART P LTD. THE TRANSFEREE COMPANY AN D IT (TRANSFEREE COMPANY) DID NOT PARTICIPATE IN THE ASSESSMENT PROCEEDINGS. UNDER THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT LD. CIT(A) RESPECTFULLY FOLLOWING THE DECISIONS MENTIONED ABOVE HAS RIGHTL Y HELD THAT ASSESSMENT ORDER PASSED ON THE ASSESSEE COMPANY IS A NULLITY. A) IMPOST P LTD. VS. ITO ITAT DELHI A BENCH ITA NO . 1430/DEL/2004 DATED 28.7.2004; 2005 TTJ (DEL) 552; (2004) 91 ITD 354 (DEL.); B) CIT VS. VIVED MARKETING SERVICING PVT. LTD. ITA NO. 273/2009. C) CIT VS. EXPRESS NEWSPAPERS LTD. (1960) 40 ITR 38 (MAD) : (1960) TAX 13(3)-282; D) CIT VS. AMARCHAND N. SHROFF (1963) 48 ITR 59 SC; E) I K AGENCIES PVT. LTD. VS. CWT KOL-III JUDGMENT D ATED 11.3.2011. 10 F) TRIVENI ENGINEERING & INDUSTRIES LTD. VS. DCIT ITA T DELHI WT BENCH (2005) 93 TTJ (DEL) 806: (2005) 93 ITD 561; G) CENTURY ENKA LTD. VS. DCIT ON 14.2.2006: 2006 101 I TD 489 MUM 2008 303 ITR 1 MUM; H) PAMASAR DISTILLERY LTD. VS. ACIT ITAT KOLKATA E B ENCH (2007) 15 SOT 331 (KOL) I) CIT VS. KURBAN HUSSAIN IBRAHIMJI MITHIBORWALA 1973 CTR (SC) 454; (1971) 82 ITR 821 (SC) J) SPICE 3 ENTERTAINMENT LTD. VS. CIT ITA NO. 475 & 47 6 OF 2011. 6.WE FULLY CONCUR WITH THE FINDING OF THE LD. CIT( A) THAT A COMPANY INCORPORATED UNDER THE INDIAN COMPANIES ACT IS A JURISTIC PERSONS. IT TAKES IT BERTH AND GETS LI FE WITH INCORPORATION AND IT DIES WITH THE DISSOLUTION AS PER THE PROVISION OF THE COMPANIES ACT. ON AMALGAMATION THE COMPANY SEIZES TO EXISTS IN THE EYES OF THE LAW. THUS ASSESSMENT UPON A DISSOLVED COMPANY IS IMPRESSIBLE AS THERE IS NO PROVISIONS IN INCOME TAX ACT TO MAKE A N ASSESSMENT THEREUPON. LD. CIT(A) IN OUR VIEW HAS THEREFORE RIGHTLY HELD THAT ASSESSMENT ON A COMPAN Y WHICH HAS BEEN DISSOLVED BY AMALGAMATION U/S. 391 A ND 394 OF THE COMPANIES ACT 1956 IS INVALID. ADMITTED LY THE ASSESSEE COMPANY IN THE PRESENT CASE STOOD DISSOLVE D ON 22.12.2009 ON AMALGAMATION WITH M/S DYNAMIC 11 BUILDMART PVT. LTD AND THE ASSESSMENT ORDER IN THE PRESENT CASE HAS BEEN FRAMED ON 31.12.2010. THE FI RST APPELLATE ORDER ON THE ISSUE IS THUS UPHELD. THE GROUND NO. 4 IS ACCORDINGLY REJECTED. 7. IN VIEW OF THE ABOVE FINDING ON THE MAINTAINABIL ITY OF THE ASSESSMENT ORDER ITSELF WHICH HELD TO BE NULL ITY THE ISSUE IN THE OTHER GROUNDS OF THE APPEALS PREFERRED BY THE REVENUE AND CROSS-OBJECTIONS RAISED BY THE ASSESSEE HAVE BECOME INFRUCTUOUS AND THEY DO NOT NEED ADJUDICATION . 9. IF THE OBSERVATIONS MADE IN THE ASSESSMENT ORDE R FIRST APPELLATE ORDER CONCLUSION DRAWN BY THE TRIBUNAL IN THE AFORESAID O RDER DATED 21.9.2012 MATERIAL AVAILABLE ON RECORD AND THE ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSELS ARE KEPT IN JUXTAPOSITION AND ANALYSED. THERE IS NO DI SPUTE TO THE FACT THAT THE ASSESSEE COMPANY GOT AMALGAMATED WITH M/S JPL HOTE LS & RESIDENCES PVT. LTD. (TRANSFEROR COMPANY) BEFORE FINALIZATION OF ASSESSM ENT. NOW QUESTION ARISES WHETHER ASSESSMENT CAN BE FRAMED ON A DEAD PERSON / NON EXISTENT ENTITY THE OBVIOUS REPLY IS NO. BECAUSE NOTICES WERE ISSUED T O THE ASSESSEE COMPANY WHEN IT WAS NO MORE IN EXISTENCE. ADMITTEDLY THE ASSESS E FILED THE RETURN UNDER PROTEST THEREFORE THE ASSESSMENT SO FRAMED IN THE CASE OF THE ASSESSEE WAS A NULLITY. IDENTICAL IS THE SITUATION IN THE CASES RELIED UPON BY THE ASSESSEE ONE OF WHICH WE HAVE REPRODUCED HEREINABOVE. SO FAR AS PAR TICIPATION IN THE PROCEEDINGS BY THE ASSESSEE WHICH IS THE MAIN THRUST OF ARGUMEN T BY THE REVENUE IS CONCERNED THIS ISSUE HAS BEEN ALREADY BEEN DELIBER ATED UPON BY THE DELHI BENCH OF THE TRIBUNAL (ITA 565 TO 570/DEL/2012) IN RESP ECT OF SPN MILK PRODUCTS PVT 12 LTD. WHEREIN PROCEEDINGS WERE INITIATED IDENTICALL Y. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE HAD ALREADY AMALGAMATED WITH ANOTHER COMPANY AND ASSESSEE PARTICIPATED IN THE ASSESSMENT PROCEEDINGS EVEN THEN THIS TRIBUNAL HELD THE PROCEEDINGS TO BE NULL AND VOID AFTER PLACING R ELIANCE UPON NUMBER OF CASES. THEREFORE THE ARGUMENT OF THE LD. DR THAT THE ASSE SSEE IS PARTICIPATED IN THE PROCEEDINGS AND THEREFORE THE PRESENT APPEALS ARE DISTINGUISHABLE AND THE PRESENT APPEALS CANNOT BE ACCEPTED IS HAVING NO SUB STANCE. THEREFORE WE FIND NO MERIT IN THIS ARGUMENT OF THE REVENUE. IN ANOTHE R CASE OF ACIT VS. M/S CHANKYA EXPORT P LTD (ITA 539 TO 544/DEL/2012) WHIC H AMALGAMATED WITH M/S VS INFRATECH P LTD. THE TRIBUNAL VIDE ORDER DATED 1 9.8.2013 DECIDED IN FAVOUR OF THE ASSESSEE. SINCE THE FACTS ARE IDENTICAL WE HAVE NO ALTERNATIVE BUT TO ALLOW THE APPEAL OF THE ASSESSEE BY FOLLOWING THE DECISION OF COORDINATE BENCH IN THE CASE OF DIMENSION APPARELS P LTD. AND OTHER CASES WHICH HAVE BEEN DISCUSSED IN THE AFORESAID ORDER AND AT PAGES 31 TO 34 OF THE PAPER BOOK IN THE CASE OF M/S CHANKYA EXPORTS PVT LTD. THE HONBLE DELHI HIGH C OURT VIDE ORDER DATED 17.9.2009 (ITA NO. 273 OF 2009) IN THE CASE OF CIT VS. VIVED MARKETING SERVICING PVT. LTD. HELD AS UNDER:- WHEN THE ASSESSING OFFICER PASSED THE ORDER OF ASSESSMENT AGAINST THE RESPONDENT COMPANY IT HAD ALREADY BEEN DISSOLVED AND STRUCK OFF THE REGISTER OF THE REGISTRAR OF COMPANIES UNDER SECTION 560 OF THE COMPANIES ACT. IN THESE CIRCUMSTANCES THE TRIBUNAL RIGHTLY HELD THAT THERE COULD NOT HAVE BEEN ANY ASSESSMENT ORDER PASSED AGAINST THE COMPANY WHICH WAS NOT IN 13 EXISTENCE AS ON THAT DATE IN THE EYES OF LAW IT HAD ALREADY BEEN DISSOLVED. THE TRIBUNAL RELIED UPON ITS EARLIER DECISION IN IMPAST PVT. LTD. VS. ITO 276 ITR 136 (AT). WE ARE OF THE OPINION THAT THE VIEW TAKEN BY THE TRIBUNAL IS PERFECTLY VALID AND IN ACCORDANCE WITH LAW. NO SUBSTANTIAL QUESTION OF LAW ARISES. DISMISSED. 10. EVEN AS PER THE SCHEME OF THE ACT SECTION 170 O F THE I.T. ACT IT CLEARLY PRESCRIBES SUCCESSION TO BUSINESS OTHERWIS E THAN ON DEATH. WE CAN GAINFULLY REFER THIS SECTION HEREUNDER:- SUCCESSION TO BUSINESS OTHERWISE THAN ON DEATH. 170. (1) WHERE A PERSON CARRYING ON ANY BUSINESS OR PRO FESSION (SUCH PERSON HEREINAFTER IN THIS SECTION BEING REFE RRED TO AS THE PREDECESSOR) HAS BEEN SUCCEEDED THEREIN BY ANY OTHE R PERSON (HEREINAFTER IN THIS SECTION REFERRED TO AS THE SUC CESSOR) WHO CONTINUES TO CARRY ON THAT BUSINESS OR PROFESSION (A) THE PREDECESSOR SHALL BE ASSESSED IN RESPECT O F THE INCOME OF THE PREVIOUS YEAR IN WHICH THE SUCCESSION TOOK PLAC E UP TO THE DATE OF SUCCESSION; (B) THE SUCCESSOR SHALL BE ASSESSED IN RESPECT OF THE INCOME OF THE PREVIOUS YEAR AFTER THE DATE OF SUCCESSION. (2) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTI ON (1) WHEN THE PREDECESSOR CANNOT BE FOUND THE ASSESSMENT OF THE INCOME OF THE PREVIOUS YEAR IN WHICH THE SUCCESSION TOOK PLACE UP TO THE DATE OF SUCCESSION AND OF THE PREVIOUS YEAR PRECEDING THAT YEAR SHALL BE MADE ON THE SUCCESSOR IN LIKE MANNER AND TO THE SAM E EXTENT AS IT WOULD HAVE BEEN MADE ON THE PREDECESSOR AND ALL TH E PROVISIONS OF THIS ACT SHALL SO FAR AS MAY BE APPLY ACCORDINGLY . 14 (3) WHEN ANY SUM PAYABLE UNDER THIS SECTION IN RESP ECT OF THE INCOME OF SUCH BUSINESS OR PROFESSION FOR THE PREVI OUS YEAR IN WHICH THE SUCCESSION TOOK PLACE UP TO THE DATE OF SUCCESS ION OR FOR THE PREVIOUS YEAR PRECEDING THAT YEAR ASSESSED ON THE PREDECESSOR CANNOT BE RECOVERED FROM HIM THE [ASSESSING] OFFI CER SHALL RECORD A FINDING TO THAT EFFECT AND THE SUM PAYABLE BY THE PREDECESSOR SHALL THEREAFTER BE PAYABLE BY AND RECOVERABLE FROM THE S UCCESSOR AND THE SUCCESSOR SHALL BE ENTITLED TO RECOVER FROM THE PREDECESSOR ANY SUM SO PAID. (4) WHERE ANY BUSINESS OR PROFESSION CARRIED ON BY A HINDU UNDIVIDED FAMILY IS SUCCEEDED TO AND SIMULTANEOUSL Y WITH THE SUCCESSION OR AFTER THE SUCCESSION THERE HAS BEEN A PARTITION OF THE JOINT FAMILY PROPERTY BETWEEN THE MEMBERS OR GROUPS OF MEMBERS THE TAX DUE IN RESPECT OF THE INCOME OF THE BUSINES S OR PROFESSION SUCCEEDED TO UP TO THE DATE OF SUCCESSION SHALL B E ASSESSED AND RECOVERED IN THE MANNER PROVIDED IN SECTION 171 BUT WITHOUT PREJUDICE TO THE PROVISIONS OF THIS SECTION. EXPLANATION.FOR THE PURPOSES OF THIS SECTION 'INC OME' INCLUDES ANY GAIN ACCRUING FROM THE TRANSFER IN ANY MANNER WHATSOEVER OF THE BUSINESS OR PROFESSION AS A RESULT OF THE SUCCE SSION. 11. IF THE TOTALITY OF THE FACTS ARE SUMMARIZED IT CAN BE SAID THAT A COMPANY INCORPORATED UNDER THE INDIAN COMPANIES ACT IS A JU RISTIC PERSON AND ITS TAKES ITS BIRTH AND GETS LIFE WITH ITS INCORPORATION. IT DIES WITH THE DISSOLUTION AS PER THE PROVISIONS OF THE COMPANIES ACT. IT IS A TRITE LAW THAT ON AMALGAMATION THE AMALGAMATING COMPANY CEASES TO EXIST IN THE EYES OF LAW. HAVING REGARD THIS CONSEQUENCE PROVIDED IN LAW A NUMBER OF CASES THE HONBLE APEX COURT HELD THAT ASSESSMENT UPON A DISSOLVED COMPANY IS IMPERM ISSIBLE AS THERE IS NO PROVISION IN THE I.T. ACT TO MAKE AN ASSESSMENT U PON A NON-EXISTENT COMPANY. IN THE CASE OF SARASWATI INDUSTRIAL SYNDICATE LTD. VS. CIT (186 ITR 278) THE LEGAL POSITION WAS EXPLAINED. IN AMALGAMATION TWO ARE MO RE COMPANIES ARE FUSED INTO ONE BY MERGER OR BY TAKING OVER BY ANOTHER. THE AMA LGAMATION IS A BLENDING OF 15 TWO OR MORE EXISTING UNDERTAKING INTO ONE UNDERTAKI NG AND THE SHARE HOLDERS OF EACH BLENDING COMPANY BECOME SUBSTANTIALLY THE SHAR E HOLDERS IN THE COMPANY WHICH IS TO CARRY ON THE BLENDING UNDERTAKINGS. T HEREFORE NO ASSESSMENT CAN BE FRAMED ON A NON-EXISTENT ENTITY. IDENTICAL VIEW WAS EXPRESSED BY HONBLE HIGH COURT OF CALCULTTA IN INK AGENCIES P LTD. VS. CWT ( 2012) 20 TAXMAN.COM 731 (CAL.) WHEREIN NOTICE WAS ISSUED UPON A COMPANY WH ICH WAS NOT IN EXISTENCE AT THE TIME OF ISSUANCE OF NOTICE DUE TO ITS WINDING UP. IT WAS HELD THAT TRANSFEROR COMPANY WOULD NO LONGER BE AMENABLE TO ASSESSMENT P ROCEEDINGS. LIKEWISE HONBLE GUJARAT HIGH COURT (SCA NO. 5857 OF 2004) OR DER DATED 15.1.2013 ON THE ISSUE OF VALIDITY OF ASSESSMENT ON A NON EXISTENT P ERSON HELD THE SAME A NULLITY. 12. IN VIEW OF THE CLEAR FACTUAL POSITION AND JUD ICIAL PRONOUNCEMENTS DISCUSSED HEREINABOVE ALL THESE APPEALS OF THE ASSESSEE ARE ALLOWED. 13. IN THE RESULT ALL THE SIX APPEALS FILED BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/4/2014. SD/- SD/- [ [[ [S.V. MEHROTRA S.V. MEHROTRA S.V. MEHROTRA S.V. MEHROTRA] ]] ] [JOGINDER SINGH [JOGINDER SINGH [JOGINDER SINGH [JOGINDER SINGH] ]] ] ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 11/4/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR 16 COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT DELHI BENCHES