GURGAON GRAMIN BANK (NOW SARVA HARYANA GRAMIN BANK),ROHTAK vs. ACIT, ROHTAK CIRCLE, ROHTAK

Appellant, Gurgaon Gramin Bank (now Sarva Haryana Gramin Bank) (hereinafter referred to as ‘the assessee’) by filing the present appeals bearing & 4070/Del/2018 sought to set aside the impugned order dated 02.04.2018 passed by the Commissioner of Income-tax (Appeals), Rohtak qua the assessment years 2013-14 & 2014-15 respectively on the grounds inter alia that :-

Appellant, Haryana Gramin Bank (now Sarva Haryana Gramin Bank) (hereinafter referred to as ‘the assessee’) by filing the present appeals bearing & 4072/Del/2018 sought to set aside the impugned order dated 28.03.2018 passed by the Commissioner of Income-tax (Appeals), Rohtak qua the assessment years 2014-15 & 2013-14 respectively on the identical grounds, except the difference of additions/disallowances, inter alia that :-

That on the facts and circumstances of the case and provisions of the law, the order u/s 143(3) dated 26/12/2016 of the Ld AO and confirmed by the Ld. CIT(A), being passed in the name of the non-existence assessee, is void ab initio and therefore the same needs to be quashed.

Briefly stated the facts necessary for adjudication of the controversy at hand are : The assessee is into the business of banking established under the Regional Rural Bank Act, 1976.

During the year under consideration, Assessing Officer (AO) while assessing the income of the assessee bank, Haryana Gramin Bank, under the head “business or profession” made Rs.1,44,33,212/- Rs.1,09,98,527 on account of claim of deduction representing ‘provisions for standard assets’ and amortization of premium over the securities claimed by the assessee under the head “Held to Maturity (HTM)” respectively and thereby assessed the total income of assessee bank at Rs.95,64,09,620/- & Rs.93,87,15,890/- for AYs 2013-14 & 2014-15 in & 4071/Del/2018 respectively.

The assessee carried the matter before the ld. CIT (A) by way of filing the appeals who has partly allowed the same. Feeling aggrieved with the impugned orders passed by ld. CIT (A)s, the assessee has come up before the Tribunal by way of filing the present appeals. parties to the appeal, gone through the documents relied upon and orders passed by the Revenue authorities below in the light of the facts and circumstances of the case.

Ld. AR for the assessee by raising ground no.1 has sought to quash the assessment proceedings on the ground that the assessments in the aforesaid cases have been framed by the AO on a non-existent entity and brought on record a Gazette Notification No.2686 dated 29.11.2013 of Government of India vide which erstwhile Gurgaon Gramin Bank and Haryana Gramin Bank have been amalgamated with M/s. Sarva Haryana Gramin Bank w.e.f.

Undisputedly, assessment orders in cases of Haryana Gramin Bank & Gurgaon Gramin Bank for AYs 2013-14 & 2014-15 were framed on 26.12.2016 & 27.12.2016 respectively. It is also not in dispute that factum of amalgamation of the assessee banks with M/s. Sarva Haryana Gramin Bank have been duly brought to the notice of AO by the assessee by writing a letter dated 05.12.2016, which is available at pages 7 to 10 of the paper book.

Section 170(2) of the Act is very categoric as to how the assessment is to be made when predecessor cannot be found. In such cases, 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.

When we examine aforesaid undisputed facts and provisions contained u/s 170(2) of the Act in the light of the fact that 27.12.2016 whereas the assessee ceased to be in existence w.e.f.

Hon’ble Supreme Court in case of CIT vs. Maruti Suzuki India Ltd. (supra) decided the identical issue by returning following findings :-

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 9 “DRP” its earlier decision in the case of the assessee for AY 2011-12. That has given rise to the present appeal. …………….

In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of 9 & 4070/Del/2018 ITA Nos.4071 & 4072/Del/2018 amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Enfotainment on 2 November 2017. The decision in Spice Enfotainment has been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011- 2012. In doing so, this Court has relied on the decision in Spice Enfotainment.

We find no reason to take a different view. There is a value which the court must abide by in promoting the interest of certainty in tax litigation. The view which has been taken by this Court in relation to the respondent for AY 2011-12 must, in our view be adopted in respect of the present appeal which relates to AY 2012-13. Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable.”

Moreover, the scheme of amalgamation itself takes care of all the consequences of the erstwhile entity. Identical issue has been decided in favour of assessee by the coordinate Bench of the Tribunal in assessee’s own case in for AY 2012-13 vide order dated 28.08.2020.

In view of what has been discussed above and following Maruti Suzuki India Ltd. case (supra) of Hon’ble Supreme Court, we are of the considered view that AO as well as ld. CIT (A) have erred in framing / confirming the assessments in the name Gurgaon Gramin Bank which are not sustainable in the eyes of law being nullity, hence ordered to be quashed. Consequently, all the appeals filed by the assessee are allowed. Order pronounced in open court on this 30th day of July, 2021.