KARAM SAFETY PRIVATE LIMITED,UDHAM SINGH NAGAR vs. THE INCOME TAX OFFICER, WARD-2(3)(5), UDHAM SINGH NAGAR

Per Dr. B. R. R. Kumar, Accountant Member:

ITA Nos. 03 & 24/DDN/2022 2 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. 3. In following grounds have been raised by the assessee:

“1. On facts and circumstances of the case and in law, the assessment order passed under section 143(3) read with section 144C and 144B of the Act is void-ab-initio as the assessment was undertaken in the name of a non-existent entity.

2. Without prejudice to other grounds, the Ld. AO has erred in law by enhancing business profits of the taxable unit by shortfall in arm’s length price of Specified Domestic Transaction (“SDT”) rather than reducing the deduction claimed u/s 80IC on such income.

a. by alleging that the Appellant was making more than ordinary profits as per Section 80-IC(7) read with Section 80-IA(10) of the Act and still enhancing the business profit of the tax holiday entity (instead of reducing tax holiday deduction), leading to a dichotomy in its own approach. b. In doing so, AO also went against the order of the TPO which clearly stated that transfer pricing adjustment should be given effect by disallowing deduction u/s 80IC/Chapter VI-A of the Act.

& 24/DDN/2022 3 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. 5. Without prejudice to other grounds, on facts and circumstances of the case and in law, the TPO/AO/DRP completely ignored the economic realities and other factual circumstance of the company which had to be considered while analyzing whether there was an arrangement in this case which led to more than ordinary profit.

6. Without prejudice, on the facts and circumstances of the case and in law, the Ld. TPO/AO/DRP erred in rejecting the internal comparable data used for the purpose of applying Transactional Net Margin Method (“TNMM”).

7. Without prejudice to the above, on the facts and circumstances of the case and in law, the Ld. TPO/AO/DRP erred in rejecting segmental profitability of sales made by the AE to the Appellant.

8. Without prejudice, on the facts and circumstances of the case and in law, the Ld. TPO/AO/DRP erred in using the entity level profits of the Appellant for computing TP adjustment instead of using segmental profitability of alleged Specified Domestic Transaction (“SDT”) provided.

9. Without prejudice to any of the other contentions, the AO has erred in incorrectly computing tax demand of INR 2,89,10,546 in the final assessment order.”

4. Facts pertinent to the instant case are as under:

10. Being aggrieved by the draft order of the NeAC / AO, Applicant filed its objections before Dispute Resolution Panel (“DRP”) on 22 April 2021.

• Issuance of certificate of incorporation and PAN card issued in the name of Company. • TAN card issued in the name of Company. • Email received from Ministry of Corporate Affairs intimating/approving Assessee’s conversion of partnership firm to Pvt. Ltd. Company. • Draft Assessment order. • Objections filed before DRP (Karam Safety Private Limited (formerly known as Karam Industries). • Letters filed before PCIT/AO intimating about conversion. • Reply filed before DRP in response to notice issued highlighting conversion of partnership firm to company. • DRP Directions M/s Karam Industries (now known as Karam Safety Private Limited).

& 24/DDN/2022 6 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. • Letter filed before TPO in the new name. • Final Assessment order (in old name)

“9. On the facts of the case and the order passed by the revenue authorities, the applicability of the decision of the Hon’ble Apex Court in the case of PCIT Vs. Maruti Suzuki India Ltd. in Civil Appeal No. 5409 of 2019 vide order dated 25.07.2019 is examined. The said judgment reads as under:

“16. By its decision dated 6 April 2017, the Tribunal set aside the final assessment order on the ground that it was void ab initio, having been passed in the name of a non-existent entity by the assessing officer. The decision of the Tribunal was affirmed in an appeal under Section 260A by the Delhi High Court on 9 January 2018 following its earlier decision in the case of the assessee for AY 2011-12. That has given rise to the present appeal.

(i) The High Court was not justified in quashing the final assessment order under Section 143 (3) only on the ground that the assessment was framed in the name of the amalgamating company, which was not in existence, ignoring the fact that the names of both the amalgamated company and the amalgamating company were mentioned in the assessment order; & 24/DDN/2022 7 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. (ii) Even on the hypothesis that the assessment order was framed incorrectly in the name of the amalgamating company, it would amount to a “mistake, defect or omission” which is curable under Section 292B when the assessment is, “in substance and effect, in conformity with or according to the intent and purpose” of the Act; (iii) During the assessment proceedings and the subsequent proceedings in appeal, the amalgamating company was duly represented by the amalgamated company. No prejudice was caused to any of the parties by the assessment order and hence rendering the assessment order invalid on a ‘mere technicality’ would be incorrect in law. There was effective participation of the assessee in the assessment proceedings and there was no doubt in the minds of those who participated about the entity in relation to which the assessment proceedings took place; (iv) In Spice Entertainment Ltd. v Commissioner of Service Tax10 (“Spice Entertainment”), the final assessment order only referred to the name of the erstwhile entity which was non-existent and there was no reference to the resulting company. In distinction, in the present case, in both the draft and the final assessment orders, the names of both the amalgamating and amalgamated companies were mentioned; (v) In paragraph 11 of the decision of the Delhi High Court in Spice Entertainment, it was held that:

“11. After the sanction of the scheme on 11th April, 2004, the Spice ceases to exist w.e.f. 1s t July, 2003. Even if Spice had filed the returns, it became incumbent upon the Income tax authorities to substitute the successor in place of the said ‘dead person’. When notice under Section 143(2) was sent, the appellant/amalgamated company appeared and brought this fact to the knowledge of the AO. He, however, did not substitute the name of & 24/DDN/2022 8 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. the appellant on record. Instead, the Assessing Officer made the assessment in the name of M/s Spice which was non existing entity on that day. In such proceedings and assessment order passed in the name of M/s Spice would clearly be void. Such a defect cannot be treated as procedural defect. Mere participation by the appellant would be of no effect as there is no estoppel against law.”

From the above extract, it would emerge that if an assessment order had been passed on the resulting company, it would not be void. Hence, in the present case, the issuance of a notice under Section 143 (2) to SPIL cannot be considered to be a jurisdictional effect when the assessment order categorically mentions the names of the amalgamated and amalgamating companies;

(vi) The decision of the Delhi High Court in Skylight Hospitality LLP v Assistant Commissioner of Income Tax, Circle-28(1), New Delhi12 (“Skylight Hospitality LLP”), which was confirmed by this Court on 6 April 201813 dealt with a situation where a notice under Section 148 was issued in the name of a non-existent private limited company. The Court held that the defect in recording the name of a non- existent company in a notice under Section 148 was a procedural defect or mistake curable under Section 292B, since no prejudice was caused to the assessee. The Delhi High Court distinguished the decision in Spice Entertainment on the ground that in that case even the final assessment order was in the name of a non-existent company; (vii) In the present case, both the draft assessment order and the final assessment order contained the names of the amalgamated and amalgamating companies and hence it cannot be held that the final order is in the name of a non- & 24/DDN/2022 9 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. existent company. The order of the TPO is not the subject of a challenge by the assessee before any forum. The directions of the TPO were implemented by the assessing officer in the draft assessment order in accordance with Section 144C(1) which was then challenged by the assessee before the DRP under Section 144C(2). Since the names of both the amalgamated and amalgamating companies were mentioned in the draft assessment order and final assessment order, there is no jurisdictional defect; (viii) In view the decision of this Court in Kunhayammed v State of Kerala14 (“Kunhayammed”), though the doctrine of merger does not apply when a Special Leave Petition is dismissed before the grant of leave to appeal, where an order rejecting a Special Leave Petition is a speaking order and reasons have been assigned for rejecting the petition, the law stated or declared in such an order will attract Article 141; and (ix) Consequently, in the alternative, in view of the order passed by this Court on 6 April 2018 in Skylight Hospitality LLP on the one hand and the order dated 16 July 2018 in the case of the present assessee for AY 2011-12 and the earlier order dated 2 November 2017 in CIT, New Delhi v Spice Enfotainment Ltd. (“Spice Enfotainment Ltd”), there appears to be a direct conflict of views on the principle whether a notice issued to a non-existent company would suffer from a jurisdictional error or whether it is a mere defect or mistake which would be governed by Section 292B.

18. On the other hand, Mr. Ajay Vohra, learned Senior Counsel appearing on behalf of the respondents submitted that:

(i) Upon a scheme of amalgamation being sanctioned, the amalgamated company is dissolved without winding up, in terms of Section 394 of the Companies Act 1956. The & 24/DDN/2022 10 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. amalgamating company ceases to exist in the eyes of law [Saraswati Industrial Syndicate Ltd. v CIT16 (“Saraswati Industrial Syndicate Ltd.”)]; (ii) The amalgamating company cannot thereafter be regarded as a "person" in terms of Section 2(31) of the Act 1961 against whom assessment proceedings can be initiated and an assessment order passed; (iii) The jurisdictional notice under Section 143(2) of the Act, pursuant to which the assessing officer assumed jurisdiction to make an assessment was issued in the name of SPIL, a non-existent entity, and was invalid. Hence the initiation of assessment proceedings against a non-existent entity was void ab initio.

• It has been held in the following decisions that, if a statutory notice is issued in the name of a non-existent entity, the entire assessment would be a nullity in the eyes of law:

- CIT v Intel Technology India (P) Ltd. - PCIT v Nokia Solutions & Network India (P) Ltd. (“Nokia Solutions”) - Spice Entertainment - Similarly, a notice to the amalgamating company, subsequent to the amalgamation becoming effective and despite the fact of the amalgamation having been brought to the notice of the assessing officer, is void ab initio as held in the following decisions:

- BDR Builders and Developers Pvt. Ltd. v ACIT - Rustagi Engineering Udyog (P.) Ltd. v DCIT - Khurana Engineering Ltd. v DCIT - Takshashila Realties (P) Ltd. v DCIT - Alamelu Veerappan v ITO (“Alamelu Veerappan”)

& 24/DDN/2022 11 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. (iv) The order passed by the TPO in the name of SPIL, a non- existent entity was invalid in the eyes of the law:

• SPIL ceased to be an "eligible assessee", in terms of section 144C (15) (b) of the Act. Consequently, there was no requirement to pass a draft assessment order/reference to DRP etc.; and • Furthermore, the final assessment order dated 31 October 2016 is beyond limitation in terms of Section 153(1) read with Section 153 (4) of the Act.

(v) The assessment framed in the name of the amalgamating Company is invalid:

• In terms of Section 170(2) of the Act, once the amalgamation is effective, assessment in respect of the income of the amalgamating company upto the appointed date has to be in the name of the amalgamated company as successor in interest of the amalgamating company. • The Delhi High Court has held in Spice Entertainment that an assessment framed in the name of the amalgamating company, which ceased to exist in the eyes of law, was invalid and untenable in law. Such a defect would not be cured in terms of Section 292B of the Act. Further, the fact that the amalgamated company participated in the assessment proceedings would not operate as estoppel. • Following the aforesaid decision of the High Court in the case of Spice Entertainment, the Delhi High Court quashed assessment orders which were framed in the name of an amalgamating company, recording also the name of the amalgamated company, in the following cases: - CIT v Dimension Apparels Pvt. Ltd (“Dimension Apparels”); affirmed by this Hon'ble Court vide Civil Appeal No. 3125 of 2015; - CIT v Micron Steels P. Ltd. (“Micron Steels”) and - CIT v Micra India (P) Ltd. (“Micra India”)

& 24/DDN/2022 12 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd.

The aforesaid judgments of the Delhi High Court have been approved by this Court in Civil Appeal No.285 of 2014 (& other connected matters). Thus applying the doctrine of merger, the law laid down by the Delhi High Court has become a precedent under Article 141.

(vi) The Respondent's case is squarely covered by the decision of this Court in its own case for the immediately preceding year:

• The Delhi High Court by its judgment reported in Maruti Suzuki held in favour of the Respondent by following the judgment in the case of Spice Entertainment. • Further, the Revenue's SLP was dismissed by this Court on 16 July 2018 in SLP(C) D.No.14106/2018, following the judgment in Spice Entertainment. • Relying on the decision of this Hon'ble Court, in the following decisions, assessments framed in the case of a non-existent entity (the amalgamating company) have been held to be non-est in the eyes of law: - CIT v BMA Capfin Ltd. (Revenue's SLP dismissed against the same vide order dated 19 November 201828 passed in SLP(C) Diary No.40486 of 2018). - Nokia Solutions

(vii) The judgment of the Delhi High Court in Skylight Hospitality LLP is distinguishable and is not applicable to the facts of the present case:

• The judgment was rendered on its own peculiar facts. • In that case, the tax evasion petition mentioned the factum of conversion of the company into a Limited Liability Partnership29, which was also noticed in the reasons to believe and approval of the Principal Commissioner (before issuance of a notice under & 24/DDN/2022 13 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. Section 148 of the Act). However, only because of a clerical mistake, the notice was wrongly issued in the name of Skylight Hospitality Pvt. Ltd. instead of Skylight Hospitality LLP. • In the aforesaid facts, the High Court held that this was an irregularity and procedural/ technical lapse which was curable under section 292B of the Act. • The decision in the case of Spice Enfotainment was not followed on the ground that it pertained to the passing of an assessment order in the name of a non- existent entity whereas the case at hand dealt with a notice under Section 148 of the Act. • The SLP filed by the assessee against the decision of the Delhi High Court was dismissed recording: "In the peculiar facts of this case, we are convinced that wrong name given in the notice was merely a clerical error which could be corrected under Section 292B of Act 1961"; • Subsequently, various High Courts, including the Delhi High Court have in the following decisions distinguished the judgment in the case of Skylight Hospitality LLP and have quashed the notice/assessment framed in the name of a non- existent entity:

- Rajender Kumar Sehgal v ITO (“Rajender Kumar Sehgal”) - Chandreshbhai Jayantibhai Patel v ITO (“Chandreshbhai Jayantibhai Patel”); and - Alamelu Veerappan

19. While assessing the merits of the rival submissions, it is necessary at the outset to advert to certain significant facets of the present case: & 24/DDN/2022 14 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. (i) Firstly, the income which is sought to be subjected to the charge of tax for AY 2012-13 is the income of the erstwhile entity (SPIL) prior to amalgamation. This is on account of a transfer pricing addition of Rs. 78.97 crores; (ii) Secondly, under the approved scheme of amalgamation, the transferee has assumed the liabilities of the transferor company, including tax liabilities; (iii) Thirdly, the consequence of the scheme of amalgamation approved under Section 394 of the Companies Act 1956 is that the amalgamating company ceased to exist. In Saraswati Industrial Syndicate Ltd., the principle has been formulated by this Court in the following observations:

“5. Generally, where only one company is involved in change and the rights of the shareholders and creditors are varied, it amounts to reconstruction or reorganisation of scheme of arrangement. In amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or ‘amalgamation’ has no precise legal meaning. The amalgamation is a blending of two or more existing undertakings into one undertaking, the shareholders of each blending company become substantially the shareholders in the company which is to carry on the blended undertakings. There may be amalgamation either by the transfer of two or more undertakings to a new company, or by the transfer of one or more undertakings to an existing company. Strictly ‘amalgamation’ does not cover the mere acquisition by a company of the share capital of other company which remains in existence and continues its undertaking but the context in which the term is used may show that it is intended to include such an acquisition. See: Halsbury's Laws of England (4th edition volume 7 para 1539). Two companies may join to form a new company, but there may be absorption or blending of one by the other, both amount & 24/DDN/2022 15 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. to amalgamation. When two companies are merged and are so joined, as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its entity.”

(iv) Fourthly, upon the amalgamating company ceasing to exist, it cannot be regarded as a person under Section 2(31) of the Act 1961 against whom assessment proceedings can be initiated or an order of assessment passed; (v) Fifthly, a notice under Section 143 (2) was issued on 26 September 2013 to the amalgamating company, SPIL, which was followed by a notice to it under Section 142(1); (vi) Sixthly, prior to the date on which the jurisdictional notice under Section 143 (2) was issued, the scheme of amalgamation had been approved on 29 January 2013 by the High Court of Delhi under the Companies Act 1956 with effect from 1 April 2012; (vii) Seventhly, the assessing officer assumed jurisdiction to make an assessment in pursuance of the notice under Section 143 (2). The notice was issued in the name of the amalgamating company in spite of the fact that on 2 April 2013, the amalgamated company MSIL had addressed a communication to the assessing officer intimating the fact of amalgamation. In the above conspectus of the facts, the initiation of assessment proceedings against an entity which had ceased to exist was void ab initio.

“11. After the sanction of the scheme on 11th April, 2004, the Spice ceases to exit w.e.f. 1s t July, 2003. Even if Spice had filed the returns, it became incumbent upon the Income tax authorities to substitute the successor in place of the said “dead person‟. When notice under Section 143 (2) was sent, the appellant/amalgamated company appeared and brought this fact to the knowledge of the AO. He, however, did not substitute the name of the appellant on record. Instead, the Assessing Officer made the assessment in the name of M/s Spice which was non existing entity on that day. In such proceedings an assessment order passed in the name of M/s Spice would clearly be void. Such a defect cannot be treated as procedural defect. Mere participation by the appellant would be of no effect as there is no estoppel against law.

12. Once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act.”

Following the decision in Spice Entertainment, the Delhi High Court quashed assessment orders which were framed in the name of the amalgamating company in:

(i) Dimension Apparels; (ii) Micron Steels; and (iii) Micra India.

& 24/DDN/2022 17 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd.

“Delay condoned.

Heard the learned Senior Counsel appearing for the parties.

We do not find any reason to interfere with the impugned judgment(s) passed by the High Court.

In view of this, we find no merit in the appeals and special leave petitions.

Accordingly, the appeals and special leave petitions are dismissed.”

“40…Where the order rejecting an SLP is a speaking order, that is, where reasons have been assigned by this Court for rejecting the petition for special leave and are stated in the order still the order remains the one rejecting prayer for the grant of leave to appeal. The petitioner has been turned away at the threshold without having been allowed to enter in the appellate jurisdiction of this Court. Here also the doctrine of merger would not apply. But the law stated or declared by this Court in its order shall attract applicability of Article 141 of the Constitution. The reasons assigned by this Court in its order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away the jurisdiction of any other court, tribunal or authority to express any opinion in conflict with or in departure from the view taken by this Court because permitting to do so would be subversive of judicial discipline and an affront to the order of this Court. However this would be so not by reference to the doctrine of merger.”

The special leave petition is dismissed.

Pending applications stand disposed of.”

Now, it is evident from the above extract that it was in the peculiar facts of the case that this Court indicated its agreement that the wrong name given in the notice was merely a clerical error, capable of being corrected under Section 292B. The “peculiar facts” of Skylight Hospitality emerge from the decision of the Delhi High Court. Skylight Hospitality, an LLP, had taken over on 13 May 2016 and acquired the rights and liabilities of Skylight Hospitality Pvt. Ltd upon conversion under the Limited Liability Partnership Act 2008. It instituted writ proceedings for challenging a notice under Sections 147/148 of the Act 1961 dated 30 March 2017 for AY 2010-2011. The “reasons to believe” made a reference to a tax evasion report received from the investigation unit of the income tax department. The facts were ascertained by the investigation unit. The reasons to believe referred to the assessment order for AY 2013-2014 and the findings recorded in it. Though the notice under Sections 147/148 was issued in the name of Skylight Hospitality Pvt. Ltd. (which had ceased to exist upon conversion into an LLP), there was, as the Delhi High Court held “substantial and affirmative material and evidence on record” to show that the issuance of the notice in the name of the dissolved company was a mistake. The tax evasion report adverted to the conversion of the private limited company into an LLP. Moreover, the reasons to believe recorded by the assessing officer adverted to the approval of the Principal Commissioner. The PAN number of the LLP was also mentioned in some of the documents. The notice under Sections 147/148 was not in conformity with the reasons to believe and the approval of the Principal Commissioner. It was in this background that the Delhi & 24/DDN/2022 21 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. High Court held that the case fell within the purview of Section 292B for the following reasons:

“18…There was no doubt and debate that the notice was meant for the petitioner and no one else. Legal error and mistake was made in addressing the notice. Noticeably, the appellant having received the said notice, had filed without prejudice reply/letter dated 11.04.2017. They had objected to the notice being issued in the name of the Company, which had ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s. Skylight Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused.”

“19. Petitioner relies on Spice Infotainment Ltd. v. Commissioner of Service Tax, (2012) 247 CTR 500. Spice Corp. Ltd., the company that had filed the return, had amalgamated with another company. After notice under Section 147/148 of the Act was issued and received in the name of Spice Corp. Ltd., the Assessing Officer was informed about amalgamation but the Assessment Order was passed in the name of the amalgamated company and not in the name of amalgamating company. In the said situation, the amalgamating company had filed an appeal and issue of validity of Assessment Order was raised and examined. It was held that the assessment order was invalid. This was not a case wherein notice under Section 147/148 of the Act was declared to be void and invalid but a case in which assessment order was passed in the name of and against a juristic person which had ceased to exist and stood dissolved as per provisions of the Companies Act. Order was in the name of non-existing person and hence void and illegal.”

& 24/DDN/2022 22 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd.

(i) Rajender Kumar Sehgal; (ii) Chandreshbhai Jayantibhai Patel; and (iii) Alamelu Veerappan.

It is of relevance to refer to Section 292B of the Income Tax Act which reads as follows:

“292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.”

In this case, the notice under Section 143(2) under which jurisdiction was assumed by the assessing officer was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B.

In this context, it is necessary to advert to the provisions of Section 170 which deal with succession to business otherwise than on death. Section 170 provides as follows:

“170. (1) Where a person carrying on any business or profession (such person hereinafter in this section being referred to as the predecessor) has been succeeded therein by any other person (hereinafter in this section referred to as the successor) who continues to carry on that business or profession,— & 24/DDN/2022 24 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd.

(a) the predecessor shall be assesseed in respect of the income of the previous year in which the succession took place up to the date of succession; (b) the successor shall be assesseed in respect of the income of the previous year after the date of succession.

(2) Notwithstanding anything contained in sub-section (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 same extent as it would have been made on the predecessor, and all the provisions of this Act shall, so far as may be, apply accordingly.

(3) When any sum payable under this section in respect of the income of such business or profession for the previous year in which the succession took place up to the date of succession or for the previous year preceding that year, assessed on the predecessor, cannot be recovered from him, the 99[Assessing] Officer shall record a finding to that effect and the sum payable by the predecessor shall thereafter be payable by and recoverable from the successor 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 simultaneously 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 business or profession succeeded to, up to the date of succession, shall be 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, “income” includes any gain accruing from & 24/DDN/2022 25 SA Nos. 01 & 04/DDN/2022 Karam Safety Pvt. Ltd. the transfer, in any manner whatsoever, of the business or profession as a result of the succession.”

Now, in the present case, learned Counsel appearing on behalf of the respondent submitted that SPIL ceased to be an eligible assessee in terms of the provisions of Section 144C read with clause (b) of sub section 15. Moreover, it has been urged that in consequence, the final assessment order dated 31 October 2016 was beyond limitation in terms of Section 153(1) read with Section 153 (4). For the purposes of the present proceeding, we do not consider it necessary to delve into that aspect of the matter having regard to the reasons which have weighed us in the earlier part of this judgment.