ABBOTT INDIA LTD.(SOLVAY PHARMA INDIA LTD),MUMBAI vs. ADDL.C.I.T. RG.7(2), MUMBAI

Abbott India Ltd (formerly Solvay Pharma India Ltd), Mumbai (assessee /appellant) for A.Y. 2008-09, against the assessment order passed by The Additional Commissioner Of Income-Tax (Appeals)-7(2), Mumbai (the learned Assessing Officer) under Section 143(3) read with section 144C of the Income-tax Act, 1961 (the Act), dated 31st October, 2012, wherein the return of income of the assessee of ₹48,34,49,690/- is assessed at ₹51,62,20,927/-. is filed by Abbott India Ltd. (as successor to Solvay Pharma India Ltd.) against the assessment order passed by the learned Assessing Officer under Section 143(3) read with section 144C of the Income-tax Act, 1961 (the Act) dated 22nd March, 2013, assessing the total income of the assessee at ₹56,05,260/- against the return income of ₹49,18,44,320/-. This assessment order was passed in the name of Solvay Pharma India Ltd.

For both the above appeals assessee has filed additional ground vide letter dated 28th March, 2023, challenging the validity of final assessment order passed under Section 143(3) read with section 144C(13) of the Act.

The additional ground raised for A.Y. 2008-09 reads as under:-

The learned Authorized Representative reiterated the above submission and requested that additional ground may be admitted.

The learned Departmental Representative vehemently opposed the application for admission of additional grounds stating that above grounds were never raised before the learned lower authorities and therefore, at this stage it cannot be admitted.

On careful consideration of the additional ground raised and reasons advances for its admission, we find that the additional ground raised by the assessee goes to the root of the matter and does not involve any fresh investigation of facts. Assessee challenges the validity of the final assessment order passed. The various decision of the Hon'ble Supreme Court and decision of the Hon'ble Bombay High Court also support admission of the additional ground. Not raising before the lower authorities a particular issue cannot be ground for not admitted the additional ground. In such circumstances only the provisions of admission of the additional grounds are introduced. In view of above, we admit additional ground raised by the assessee.

As the additional ground is jurisdictional in nature, we proceed to decide it first for assessment year 2008 – 09. Facts leading to the case shows that assessee Solvay Pharma India Ltd. , engaged in the business of manufacturing and trading in pharmaceuticals, filed its return of income declaring total income of ₹48,34,49,690/- on 30th September, 2008. As the assessee has entered into international transaction, it was referred to the learned Transfer Pricing Officer to determine the Arm's Length Price of the same. The learned Transfer Pricing Officer passed an order under Section 92CA(3) of the

Further Fact shows that Hon'ble Bombay High Court vide order dated 15th i July, 2011, approved amalgamation scheme, wherein Solvay Pharma India Ltd amalgamated with Abbott India Ltd. As per scheme of amalgamation the appointed date was 1st January, 2011 and effective date was the date after necessary formalities for same is completed. (Page number 1 – 33 of the paper book)

For assessment year 2008 – 09 the order under section 92CA (3) of The Income Tax Act 1961 was passed by The Additional Commissioner Of Income Tax Transfer Pricing –II (4), Mumbai (the learned TPO) on 25/10/2011 in the name of Solvay Pharma India Ltd.

Learned DRP Mumbai passed direction on 30/7/2012 in the name of Solvay Pharma India Ltd whereas form number 35A being objections to the draft assessment order clearly mentions the eligible assessee as Solvay Pharma India Ltd (now merged with Abbott India Ltd). It was also verified by the director of Abbott India Ltd.

Consequently the final assessment order was passed on 31/10/2012 in the name of Solvay Pharma India Ltd.

The claim of the learned authorized representative is that by various correspondence the assessing officer as well as the learned dispute resolution panel was intimated about the amalgamation of Solvay Pharma India Ltd with Abbott India private limited however, despite above communication, all the orders passed by the learned TPO and the learned assessing officer as well as the learned dispute resolution panel are in the name of Solvay Pharma India limited which should have been passed in the name of Abbott India Ltd and therefore such orders passed are on a nonexistent entity and consequently are invalid and liable to be quashed. The learned authorized representative relied heavily on the decision of the honourable Supreme Court in case of Principal Commissioner Of Income Tax Versus Maruti Suzuki India Ltd [2019] 107 taxmann.com 375 (SC) where it has been held that Where assessee company was amalgamated with another company and thereby lost its existence, assessment order passed subsequently in name of said non-existing entity, would be without jurisdiction and was to be set aside. He also submitted that there are series of decision of various high courts and coordinate benches which say that where the assessment order is passed in the name of a non existing entity are invalid, if fact of its non existence is communicated to the assessing authorities in advance.

We have carefully considered the rival contention and perused the orders of the lower authorities. We find that factum of knowledge of amalgamation is not disputed by the learned departmental representative nor is there any denial of information with regard to the amalgamation by the Jurisdictional Assessment Officer, the learned dispute resolution panel. We find that recently the honourable Bombay High Court on identical facts and circumstances of the case in New Age Buildtech (P.) Ltd. V National Faceless Assessment Centre [2023] 151 taxmann.com 66 (Bombay)[26-04- 2023] has held as under:-

With respect to assessment year 2009 – 10 also the facts are identical. The assessee has submitted a paper book containing 81 pages wherein the various correspondences also shows that the learned assessing Officer was intimated of the fact of amalgamation of Solvay Pharma Ltd. Solvay Pharma Ltd was a non-existent entity post amalgamation. For assessment year 2009 – 10 the learned transfer pricing officer in order passed under section 92CAl (3) of the act dated 30/1/2013 in the first paragraph itself mentioned about the fact of amalgamation. The transfer pricing officer’s order was passed in the name of Solvay Pharma India Ltd. The draft assessment order dated 22/3/2013 is also passed in the name of Solvay Pharma India Ltd and consequently the directions of the learned dispute resolution panel dated 20/12/2013 specifically mentioned in the name of the assessee as Solvay Pharma India Ltd (now Abbot India Ltd). In the paragraph number 2 of the direction of the learned dispute resolution panel the fact of the amalgamation is clearly mentioned. Despite the above facts the final assessment order passed under section 143 (3) read with section 144C (13) of the act dated 29/1/2014 was passed in the name of Solvay Pharma India Ltd. Accordingly for assessment year 2009 – 10 also we have no hesitation in quashing the assessment order passed in the name of a non-existent entity.

As we have already quashed the assessment order is passed in the name of non-existent entity for both the assessment years i.e. assessment year 2008 – 09 and 2009 – 10, all other grounds of appeal of the assessee are not required to be adjudicated.

In the result appeal filed by the assessee for both the assessment years are allowed.