M/S. INTERNATIONAL MARITIME & ALLIED SERVICES LIMITED (NOW MERGED WITH M/S. JSW INFRASTRUCTURE LTD),MUMBAI vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 6(1)(2),MUMBAI, MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated
27.01.2025 passed by the Ld. Commissioner of Income-tax
(Appeals) – National Faceless Appeal Centre, Delhi for assessment year 2015-16, raising following grounds:
1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in setting aside the assessment

M/s International Maritime & Allied
Services Ltd. (Now merged with M/s JSW
Infrastructure Ltd.)
2
order to the Learned Assessing Officer with direction to make the fresh Assessment of the non-existing entity, without Considering the provision of law.
2. The Learned CIT(A) ought to have quash the reassessment notice issued u/s.148 of the Income Tax Act, 1961 on a non- existing entity and consequently consider the assessment void ab initio.
3. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in not appreciating the fact that the assessee company was dissolved wef from 01.04.2014 and is no longer inexistence and no notice u/s. 148 can be issued to non- existing entity.
2. Briefly stated, facts of the case are that the assessee namely
M/s International Maritime & Allied Services Ltd. was amalgamated with M/s JSW Infrastructure Ltd. by an order of the Hon’ble
Bombay High Court dated 05.09.2014. Subsequently, the Assessing
Officer(AO) noted that the assessee was appearing in the list of non-filer of return of income for the assessment year under consideration i.e. AY 2015-16. The AO also noted form the individual transaction statement that the assessee made contract payments to JSW Dharamtar Port Pvt. Ltd. and JSW Infrastructure
Ltd. totaling to Rs.5,32,11,600/-. In view of the information, the Assessing Officer recorded reasons to believe that income escaped assessment and accordingly issued notice u/s 148 of the Income- tax Act, 1961 (in short ‘the Act’) on 30.03.2021 requiring the assessee to file return of income. In view of non-compliance on the part of the assessee, the assessment was completed invoking section 144 i.e. best judgment assessment vide order dated

M/s International Maritime & Allied
Services Ltd. (Now merged with M/s JSW
Infrastructure Ltd.)
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13.03.2022. The appeal was filed on behalf of the amalgamated entity and this issue of amalgamation was raised before the ld
CIT(A). It was contested by the assessee that in view of assessment order passed on an non-existing entity, same is void ab-initio. The Ld. CIT(A) however, has restored the matter back to the file of the Assessing Officer for deciding afresh after taking into consideration submission of the assessee. The relevant finding of the Ld. CIT(A) is reproduced as under:
“6. DECISION :1 have carefully considered all the material available on records, the facts of the case, grounds of appeal and written submissions uploaded by the appellant. Appellant has furnished many documents/evidence in support of grounds of appeal taken at the appellate stage. The decision on the appeal preferred by the appellant i iscussed in subsequent paras.
6.1 The appellant submitted that International Maritime & Allied
Services Limited was amalgamated with JSW Infrastructure Limited by a Bombay High Court order dated 05th September 2014. According to the order, the transferor company stands dissolved once the amalgamation scheme becomes effective. However, the appellant received a scrutiny assessment order under sections 147, 144, and 144B of the Income Tax Act, 1961, dated 13.03.2022 for AY 2015-
16, which assessed an income of Rs. 5,41,27,900/- after adding Rs.
5,32,11,600/- for undisclosed payment to contract work and Rs.
9,16,303/- for undisclosed interest.
6.1.1 Appellant further argues that assessment order was passed without serving any notices on the appellant, which had been dissolved and ceased to exist from 01.04.2014. The AO failed to comply with section 148, which mandates serving a notice to the assessee before reassessment. Since the appellant company no longer existed, it did not receive any notices, and the AO should have verified this from the ROC website or the amalgamation records.
6.1.2 Appellant contends that AO's failure to recognize the amalgamation, despite being informed at the time of the High Court order, resulted in an ex-parte order against a non-existent entity.
Therefore, the order is considered invalid and void-ab-initio.
Additionally, the alleged undisclosed payments and interest had already been accounted for by JSW Infrastructure Limited in its M/s International Maritime & Allied
Services Ltd. (Now merged with M/s JSW
Infrastructure Ltd.)
4
books and offered to tax during the year, leading to potential double taxation.
6.1.2 In the light of fresh evidences submitted by the appellant, a comprehensive and meticulous examination of the facts is essential to ascertain an accurate assessment of income by the Assessing
Officer. Such diligence will ensure that every pertinent detail is scrutinized, leaving no room for ambiguity or error in the determination of the appellant's financial standing.
6.2 Upon a careful review of the submissions and documentation provided by the appellant, it is my considered opinion that, in light of the unique facts and circumstances of this case, along with the evidence furnished, the best judgment assessment order framed by the Assessing Officer under Section 147 r.w.s 144 of the Income Tax
Act does not, prima facie, appear to be appropriate or just. To arrive at a fair and accurate determination of the appellant's income, the additions made and the issues raised herein require a more detailed and exhaustive examination.
6.3 As per the newly inserted proviso to section 251(1)(a) of the Act,
Commissioner (Appeals) in case of order of assessment made u/s.
144 of the Act. may set aside such assessment and refer the case back to the AO for making a fresh assessment. This proviso has been inserted in the Act w.e.f. 1.10.2024. The said proviso to section 251(1)(a) of the Act is reproduced as under:
"251. (1) In disposing of an appeal, the Commissioner (Appeals)]
shall have the following powers—
1. in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment;
[Provided that where such appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment;]
6.4 In the instant case the assessment order has been issued u/s 147 r.w.s 144 by the AO and there are issues which need to be further examined and investigated by the AO. In view of the above facts and changes in the Act, as enumerated above, in my considered opinion the submissions filed by the appellant in the appellate proceedings, are germane to the correct appreciation of the issues under deliberation. It is a fit case for set-aside of assessment made by the AO.
6.5 Therefore, the assessment order passed by the AO u/s. 147
r.w.s 144 of the Income Tax Act dated 13.03.2022is hereby set aside for making fresh assessment, denovo, after taking into account the M/s International Maritime & Allied
Services Ltd. (Now merged with M/s JSW
Infrastructure Ltd.)
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above submissions filed by the appellant. The Assessing Officer is directed to make a fresh assessment after giving adequate opportunities to the appellant and complying with all extant rules and provisions and following principles of natural justice and take into account any further submissions which it has to file during the course of the said proceedings. The AO should also conduct all necessary enquiries to verify the submissions filed by the appellant
6.6 The appellant is also directed to comply with all the notices/correspondences issued by the AO. The appellant may note that all necessary compliance should be made at the earliest and within the time limit prescribed in the notices issued by Ld. AO. It should be the endeavour of the Appellant to promptly submit necessary evidences in support of her Income tax return, suomot or as required by the Assessing Officer without causing undue delays leading to submissions towards the fag end of the limitation period
7. The assessment order is set aside accordingly in accordance with proviso to S 251(1)(a) with a direction to the AO to make a fresh assessment in accordance with rules and timelines prescribed u/s 153(3) of the Act.”
3. Before us, the Ld. counsel for the assessee contested that during the amalgamation of the assessee company with JSW
Infrastructure Ltd., Mumbai, the Assessing Officer was duly notified and his objections were obtained by the Ministry of Corporate
Affairs. A copy of the said correspondence has been placed on record. This factual observation has not been disputed by the ld DR also.
4. In view of the above aforesaid, it is clear that the Assessing
Officer was duly intimated about the amalgamation of the assessee company with JSW Infrastructure Ltd in the month of July, 2014
itself. Therefore, the subsequent issue of notice u/s 148 of the Act on the non-existent entity, has rendered the entire reassessment as void ab-initio. The Hon’ble High court of Delhi in a recent decision in M/s International Maritime & Allied
Services Ltd. (Now merged with M/s JSW
Infrastructure Ltd.)
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case of International Hospital Limited in ITA 116/2023 has discussed all the decisions of Hon’ble Supreme court on the issue in dispute and then held that assessment proceedings against nonexistent entity can’t be sustained. The relevant fining of Hon’ble
High Court is reproduced as under:
“ 32. In view of the aforesaid, the position in law appears to be wellsettled that a notice or proceedings drawn against a dissolved company or one which no longer exists in law would invalidate proceedings beyond repair. Maruti Suzuki conclusively answers this aspect and leaves us in no doubt that the initiation or continuance of proceedings after a company has merged pursuant to a Scheme of Arrangement and ultimately comes to be dissolved, would not sustain.
Respectfully following above decision of Hon’ble Delhi High Court, the assessment made in the instant case cannot be sustained. The consequent appellate proceedings accordingly become infructuous.
The grounds of appeal of the assessee are accordingly allowed.
4. In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on 16/04/2025. (RAHUL CHAUDHARY)
ACCOUNTANT MEMBER

M/s International Maritime & Allied
Services Ltd. (Now merged with M/s JSW
Infrastructure Ltd.)
7
Mumbai;
Dated: 16/04/2025
Rahul Sharma, Sr. P.S.

Copy of the Order forwarded to :

BY ORDER,
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