KONECRANES P.LTD,PUNE vs. ASST CIT CIR 3(2)(2), MUMBAI

This appeal by the assessee is directed against the assessment order dated 31/01/2017 passed u/s. 143(3) r.w.s. 144C(13) r.w.s. 92CA(3) of the Income Tax Act, 1961 [ in short ‘the Act’], for the assessment year 2012-13.

Shri Dhanesh Bafna appearing on behalf of the assessee submits that as of now he would be making his submissions only on the additional ground of appeal challenging validity of assessment order. The additional ground of appeal raised is legal in nature, no additional evidence /documents are required for adjudication of additional ground. The documents/orders are already on record for adjudication of the additional legal ground. The ld. Authorized Representative for the assessee further submits that, if additional ground is allowed the original grounds raised in appeal would become academic.

Per contra, Ms. Samrudhi Dhananjay Hande representing the Department vehemently defended the impugned order. The ld. Departmental Representative submits that the assessee never communicated the fact of amalgamation of Konecranes India Pvt. Ltd. with WMI Konecranes India Ltd. to the Assessing Officer. The ld. Departmental Representative further submits that the order of amalgamation was passed way back on 02/11/2012 and it was only in 2015 the fact of amalgamation was brought to the notice of TPO only. The letter dated 09/01/2017 at page 922 of the Paper Book addressed to the Assessing Officer was in the context of giving effect to the directions of DRP. The said communication was not to inform the Assessing Officer about the amalgamation of assessee with WMI Konecranes India Ltd. Thus, at no point of time the assessee ever informed the Assessing Officer regarding change in name or the fact that Konecranes India Pvt. Ltd. ceases to exist. The ld. Departmental Representative vehemently argued that the decision rendered in the case of Maruti Suzuki India Ltd. (supra) would not apply in the present case as the facts are distinguishable.

We have heard the submissions made by rival sides and have examined the orders of the authorities below and the documents on record on which reliance has been placed by rival sides. The assessee has raised additional ground of appeal challenging validity of the draft assessment order dated 17/03/2016 and final assessment order dated 31/01/2017 being in the name of Non-existing Entity. The additional ground raised by the assessee is legal in nature as it challenges the validity of the assessment order. No fresh evidence is required to be adduced for adjudication of additional ground of appeal, hence, the additional ground is admitted for adjudication.

The ld. Authorized Representative for the assessee has confined his submissions to address additional ground of appeal at this stage. The scheme of amalgamation of Konecranes India Pvt. Ltd. with WMI Konecranes India Ltd. was sanctioned by the Hon'ble Bombay High Court vide order dated 02/11/2012 w.e.f. 01/04/2012. The assessee vide letter dated 21/05/2015 intimated the TPO regarding amalgamation of assessee with WMI Konecranes India Ltd. The TPO took cognizance of the said intimation and passed the order u/s. 92CA(3) of the Act on 23/12/2015 in the name of amalgamated company i.e. WMI Konecranes India Ltd. The fact that Konecranes India Pvt. Ltd. ceased to exist was known to the Assessing Officer as is evident from draft assessment order dated 17/03/2016. The Assessing Officer still framed the draft assessment order in the name of Non-existing Entity. The Assessing Officer in the draft assessment order mentioned the name of assessee as under: “ M/s. Konecranes India Pvt. Ltd. (Formerly known as WMI Konecranes India Ltd.)” Thereafter, the assessee filed objections before the DRP. The DRP disposed of the objections vide directions dated 29/11/2016 in the name of amalgamated company i.e. WMI Konecranes India Ltd., the successor to Konecranes India Pvt. Ltd. The Assessing Officer thereafter passed the final assessment order dated 31/01/2017 again in the name of Non-existing Entity i.e. Konecranes India Pvt. Ltd. The Assessing Officer committed same error in mentioning the name of assessee as was done while passing the draft assessment order. The final assessment order passed in the name of Non-existing Entity makes the order invalid and without jurisdiction. The Hon’ble Apex Court in the case of Maruti Suzuki Ltd. (supra) has held that where the assessee company was amalgamated with another company and thereby looses its existence, the assessment order passed in the name of Non-existing Entity is without jurisdiction and is liable to be set-aside. Thus, in the light of facts of the case and the law expounded by Hon’ble Apex Court, the impugned order is quashed and the appeal of assessee is allowed on the legal ground raised by way of additional ground of appeal.

Since, the assessee succeeds on the legal issue, the grounds of appeal on merits have become academic and are left open.

In the result, appeal by the assessee is allowed.