PR. COMMISSIONER OF INCOME TAX -6, NEW DELHI vs. DHARA VEGETABLE OIL & FOODS CO. LTD. (NOW MERGED WITH MOTHER DAIRY FRUIT & VEGETABLE LTD.)

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ITA/70/2018HC DelhiDLHC01429176201723 January 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises from the ITAT's order. The Court observed that the ITAT had merely followed the reasoning and decision of the High Court itself in previous judgments, specifically citing Spice Infotainment Ltd. Vs CIT. Therefore, the ITAT's finding that the assessment was void because it was completed in the name of a non-existent entity (due to merger) was upheld. The ratio decidendi is that an assessment completed in the name of an entity that has ceased to exist due to a court-approved merger is void ab initio, and an appellate tribunal merely following such established High Court precedent does not raise a substantial question of law. The appeals filed by the Revenue were dismissed.

What were the facts?

The appeals by the Principal Commissioner of Income Tax - 6, New Delhi (Revenue) challenge the Income Tax Appellate Tribunal's (ITAT) decision. The ITAT had held that the assessment completed by the Assessing Officer (AO) was void. This was because the assessment was made in the name of Dhara Vegetable Oil & Foods Co. Ltd. (the original assessee), which had merged with Mother Dairy Fruit & Vegetable Ltd. The scheme of amalgamation for the original assessee was accepted by the High Court. The assessment was completed after the original assessee had ceased to exist as a separate legal entity.

What were the issues?

1. Whether the assessment completed by the Assessing Officer in the name of a non-existent entity, following a merger, is valid? (Question of law) The Revenue contended that the ITAT erred in holding the assessment void. The Revenue's argument, as understood from the High Court's observation, was that the ITAT merely followed existing precedents from this Court. The Revenue sought to urge a question of law regarding the validity of the assessment in the context of merger and amalgamation. The Assessee's contentions are not explicitly recorded in the judgment, but the ITAT's decision, which the High Court upheld, was based on the principle that an assessment in the name of a non-existent entity is void. The ITAT relied on the judgment of this Court in Spice Infotainment Ltd. Vs CIT, (2012) 247 CTR (Del) 500 and other similar cases.

AI-generated summary — verify with the full judgment below

$~29-30 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 70/2018

PR. COMMISSIONER OF INCOME TAX -6, NEW DELHI ..... Appellant versus

DHARA VEGETABLE OIL & FOODS CO. LTD. (NOW MERGED WITH MOTHER DAIRY FRUIT & VEGETABLE LTD.) ..... Respondent

ITA 71/2018 and CM APPL. 2781/2018

PR. COMMISSIONER OF INCOME TAX-6, NEW DELHI ..... Appellant versus

DHARA VEGETABLE OIL & FOODS CO. LTD.(NOW MERGED WITH MOTHER DAIRY FRUIT & VEGETABLE LTD.) ..... Respondent Present : Mr. Asheesh Jain, Sr. Standing Counsel with Mr. Shahrukh Ejaz, Adv. for the appellant.

Ms. Shashi M. Kapila, Mr. R.R. Maurya, Mr. Sushil Kumar, Mr. Siddharth Kapila and Mr. Pravesh Sharma, Advs. for the respondent.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

23.01.2018

The question sought to be urged in these appeals by the Revenue is with respect to the validity of the assessment completed by the Assessing Officer (AO) in the context of merger and amalgamation of the original assessee with another entity i.e. Mother

Dairy Fruits and Vegetables Ltd. The original assessee was known as Dhara Vegetable Oil & Foods Co. Ltd. At the relevant time, its scheme for amalgamation was accepted by High Court. The assessment however, was completed in the name of original (non- existent entity). The assessment for that reason was held to be void by Income Tax Appellate Tribunal (IAT), which followed the judgment of this Court in Spice Infotainment Ltd. Vs CIT, (2012) 247 CTR (Del) 500 and other cases. This Court is of the opinion that no substantial question of law arises because the ITAT merely followed the reasoning and the decision of this Court. The appeals are therefore, dismissed alongwith the pending application.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J JANUARY 23, 2018 rc

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