EKVIRA HOTELS PRIVATE LIMITED,MUMBAI vs. ACIT 6(2)(2), MUMBAI, MUMBAI

The assessee was engaged in the business of hotel operations since 1997. Its name was subsequently struck off from the records of the Registrar of Companies and the company was formally dissolved on 23/06/2017 under section 248(5) of the Companies Act, 2013.

It is undisputed that the assessee did not file a return of income for A.Y. 2012–13. Based on information from the Annual Information Report (AIR) that the assessee had sold immovable property valued at ₹1,12,50,000/- during the relevant year, the Assessing Officer recorded reasons to believe that income chargeable to tax had escaped assessment and accordingly issued notice under section 148 dated 27/03/2018.

However, all notices issued thereafter were returned unserved with postal remarks of “left”. Electronic notices also remained unresponded. Consequently, the Assessing Officer framed reassessment ex parte under section 144, treating the entire value of the property, i.e., ₹1.12 crore, as undisclosed income. The learned CIT(A) too sustained the addition, again ex parte, without adjudicating on merits.

Before us, the learned counsel for the assessee submitted that since the company was struck off and dissolved on 23/06/2017, no valid notice under section 148 could have been issued on 27/03/2018. An assessment framed on a non-existent entity is void ab initio as per the Ekvira Hotels Private Limited settled law by Hon’ble Supreme Court and High Courts. He further pointed out that the reassessment order is neither physically nor digitally signed, nor does it bear a date. The accompanying demand notice also lacks signature, except for a typed date. Such an order, lacking authentication, is a nullity in the eyes of law. He also argued that the property in question was sold vide sale deed executed on 21/01/2011, i.e., in F.Y. 2010–11, and the entire consideration was received in that year itself. Therefore, the capital gains, if any, arose only in A.Y. 2011–12 and not in the impugned year. The AIR-based reopening incorrectly assumed the transaction as pertaining to A.Y. 2012–13. In support of his contentions, learned counsel relied upon several judicial pronouncements, the details of which have been placed on record, however, for the sake of brevity, they are not being reproduced herein.

The learned Sr. DR fairly submitted that since the proceedings were ex parte before both lower authorities, the matter, if deemed fit, could be restored back to the file of the learned CIT(A) for fresh adjudication after giving due opportunity to the assessee.

We have carefully considered the rival submissions, perused the record, and examined the impugned assessment order. At the very threshold, one striking feature stares us in the face: the assessment order placed before us does not bear the signature of the Assessing Officer, neither in physical ink nor through digital authentication. The demand notice, too, is devoid of any such attestation, except for a mechanically typed date. It is a fundamental principle that an order derives Ekvira Hotels Private Limited its very existence and legal sanctity from the signature of the authority who purports to pass it. The act of signing is not a mere formality but a solemn affirmation of authorship, accountability, and authority. In the absence of such authentication, the so-called order remains an unsigned draft, incapable of assuming the character of a binding or enforceable assessment. The law is clear that an unsigned order is no order in the eye of law and it is as if no order has ever been passed. In the course of hearing, we specifically inquired from the learned Departmental Representative, and he candidly did not dispute this factual aspect of non- signature. Once this fatal flaw is admitted, the inescapable conclusion is that the reassessment order is incurably void and non est. On this ground alone, the entire proceedings collapse at inception and are liable to be quashed.

It is also a matter of record that the assessee company stood struck off and dissolved by the Registrar of Companies with effect from 23/06/2017, much prior to the issuance of notice under section 148 on 27/03/2018. Once a company is dissolved, it ceases to have a juristic personality in the eyes of law and becomes a non-existent entity. Any proceedings initiated thereafter in its name are, in essence, directed against a dead person and therefore void ab initio. The Hon’ble Supreme Court and various High Courts have consistently held that framing of an assessment on a non- existent entity is a jurisdictional defect which goes to the root of the matter and cannot be cured even by recourse to the saving provisions of section 292B. On this count also, Ekvira Hotels Private Limited therefore, the assessment order can be reckoned as invalid in law. However, having already held in the preceding paragraph that the reassessment order itself suffers from a fatal infirmity for want of authentication inasmuch as it is unsigned and undated, we refrain from adjudicating this ground separately. Suffice it to observe that the order is vitiated on multiple fronts, each of which independently renders it unsustainable.

Even assuming for a moment that the assessment was otherwise valid, the addition made does not withstand the scrutiny of facts. The material placed before us demonstrates beyond cavil that the sale deed for the property in question was executed on 21/01/2011. The consideration was also received during the financial year 2010–11. It is trite law that the chargeability of capital gains arises in the year in which the transfer is effected within the meaning of section 2(47) of the Act. Since the transfer was completed in January 2011, the relevant assessment year would be 2011–12. There was therefore no occasion for taxing the same in A.Y. 2012–13. The entire edifice of addition of ₹1,12,50,000/- thus collapses on the anvil of basic facts and statutory prescription.

We are therefore confronted with a situation where three incurable defects coalesce. Firstly, the order is unsigned and hence void. Secondly, the proceedings have been initiated and concluded against an entity which had ceased to exist. Thirdly, the addition is made in an assessment year wholly unconnected with the transaction. Each of these lapses, by itself, would be sufficient to nullify the assessment. When taken together, they leave no manner of doubt that the Ekvira Hotels Private Limited impugned order is a legal nullity, incapable of being sustained either in fact or in law.

In view of the aforesaid discussion, we unhesitatingly hold that the reassessment order dated 12/12/2018 is void ab initio and deserves to be quashed in its entirety. Once the very foundation of the proceedings is struck down, the superstructure of addition automatically falls. Consequently, the addition of ₹1,12,50,000/-, premised as it is on a misconceived appreciation of facts and law, does not survive for consideration.

In the result, the appeal of the assessee is allowed Order pronounced on 9th September, 2025.