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Income Tax Appellate Tribunal, MUMBAI BENCH “K”, MUMBAI
आयकर अपील�य अ�धकरण मुंबई पीठ “के ” �ी �वकास अव�थी, �या�यक सद�य एवं �ी एम. बालगणेश, लेखा सद�य के सम� IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “K”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI M. BALAGANESH, ACCOUNTANT MEMBER आअसं. 7457/मुं/2018 (�न. व. 2014-15 ) ITA NO.7457/MUM/2018(A.Y.2014-15) Accenture Solutions Private Limited(‘ASOL) [as a successor to Accenture Services Private Limited (“ASPL”) which has merged into ASOL With an effective date of 1 December 2016] Plant 3, Godrej & Boyce Complex, Phirojshah Nagar, Vikhroli West, Off LBS Marg, Mumbai 400 079. PAN: AAACH-3235-M ...... अपीलाथ� /Appellant बनाम Vs. The Deputy Commissioner of Income Tax, Circle 14(1)(1), Aaykar Bhavan, M.K.Road, Mumbai 400 021 ..... ��तवाद�/Respondent अपीलाथ� �वारा/ Appellant by : Shri Percy J. Pardiwalla, Sr. Advocate with Shri Hiten Chande ��तवाद� �वारा/Respondent by : Dr.Yogesh Kamat CIT DR & Shri Satya Pinisetty सुनवाई क� �त�थ/ Date of hearing : 01/02/2022 घोषणा क� �त�थ/ Date of pronouncement : 23/03/2022 आदेश/ ORDER PER VIKAS AWASTHY, JM:
This appeal by the assessee is against the assessment order dated 29/10/2018 passed by the Assessing Officer u/s.144C(13) of the Income Tax Act,1961 ( in short 'the Act').
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The assessee in appeal has assailed Transfer Pricing adjustment and certain other peripheral issues arising out of non transfer pricing issues. The assessee has also raised additional grounds of appeal challenging validity of assessment order.
Shri Percy J. Pardiwalla appearing on behalf of the assessee submitted that at this stage he would be pressing only additional ground No.13 challenging assessment order on the ground that the assessment order has been framed on a non existing entity. The other grounds raised in the grounds of appeal would become academic and may not require adjudication at this stage., if assessee succeeds on additional ground No.13 The ld. Counsel for the assessee submitted that the additional ground of appeal challenges the validity of assessment order and hence, being legal in nature deserves to be admitted. No additional evidence is required to be adduced for adjudication of additional ground No.13.
The additional ground No.13 raised by the assessee assailing validity of the assessment order reads as under:
“13. Without prejudice to the Ground Nos. 1 to 12, the Final Assessment Order dated 29 October 2018 passed under Section 143(3) read with Section 144C(13) of the Act is bad in law and ought to be quashed as the assessment order was framed on a non-existing entity as on the date of such order (the said company having merged with Accenture Solutions Private Limited w.e.f. 01 December 2016).” 5. The ld. Counsel for the assessee narrating sequence of the events submitted: Notice u/s 143(2) of the Act dated 28/08/2015 was issued to the assessee in the name “ M/s. Accenture Services Pvt. Ltd.” . During the pendency of the assessment proceedings the said company got amalgamated with “ Accenture Solutions Pvt. Ltd.” by virtue of order of the Hon'ble Bombay High Court dated 20/10/2016 approving scheme of Amalgamation.
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The assessee vide communication dated 14/12/2016 informed the Assessing Officer about approval of Scheme of Amalgamation of M/s. Accenture Services Pvt. Ltd. with M/s. Accenture Solutions Pvt. Ltd by the order of Hon'ble Bombay High Court dated 20/10/2016. The ld. Counsel for the assessee pointed that in the aforesaid communication the assessee specifically pointed that hence forth, all communications/order, etc. be made in the name of successor entity of M/s. Accenture Services Pvt. Ltd. i.e. M/s. Accenture Solutions Pvt. Ltd. The said communication was duly delivered to the Assessing Officer as is evident from the acknowledgment receipt on the office copy. The ld. Counsel for the assessee referred to the aforesaid communication at page 3 of the Paper Book. The ld. Counsel for the assessee pointed that despite having communicated to the Assessing Officer regarding amalgamation of M/s. Accenture Services Pvt. Ltd. with M/s. Accenture Solutions Pvt. Ltd., the Transfer Pricing Officer passed the order u/s. 92CA(3) of the Act dated 21/11/2017 in the name of non-existing entity i.e. M/s. Accenture Services Pvt. Ltd. Thereafter, the draft assessment order was passed by the Assessing Officer in the name of M/s. Accenture Services Pvt. Ltd. i.e. a non-existing entity. The ld. Counsel for the assessee pointed that a perusal of the cause title of draft assessment order would show that the Assessing Officer was well aware of the fact that M/s. Accenture Services Pvt. Ltd. has been amalgamated with M/s. Accenture Solutions Pvt. Ltd. , yet the draft assessment order was passed in the name of erstwhile company which had ceased to exist. Thereafter, the assessee filed objections before the Dispute Resolution Panel (DRP). The DRP issued directions dated 04/09/2018 in the correct name i.e. M/s. Accenture Solutions Pvt. Ltd. Consequent to the directions of the DRP the Assessing Officer passed the final assessment order
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dated 29/10/2018. The final assessment order was passed by the Assessing Officer in the name of M/s. Accenture Services Pvt. Ltd. i.e. erstwhile company which was non-existent on the date of passing of the final assessment order. The assessee discharged his onus in intimating the Assessing Officer regarding amalgamation of the M/s. Accenture Services Pvt. Ltd. with M/s. Accenture Solutions Pvt. Ltd. After amalgamation the amalgamating company ceased to exist and it is only amalgamated company i.e. successor company has legal entity and existence in the eye of law. The ld. Counsel for the assessee placed reliance on the decision of Hon'ble Supreme Court in the case of PCIT vs. Maruti Suzuki India Ltd. reported as 416 ITR 613 to contend that when the assessee company is amalgamated with another company and thereby lose its existence, the subsequent assessment order passed in the name of non-existing entity, the said assessment order is without any jurisdiction and hence, liable to be set-aside. The ld.Counsel for the assessee further submitted that in Assessment Year 2013-14 in assessee’s own case the assessment order passed in the name of M/s. Accenture Services Pvt. Ltd. i.e. non-existent entity was held to be without jurisdiction by the Tribunal in ITA No.530/Mum/2018 vide order dated 04/01/2022.
On the other hand, Dr.Yogesh Kamat representing the Department vehemently defended the assessment order. The ld.Departmental Representative submitted that the name of new entity after merger i.e. M/s. Accenture Solutions Pvt. Ltd. is also mentioned in the assessment order, therefore, there is no short coming in the assessment order, hence, the assessment order is valid. To support his contention the ld.Departmental Representative placed reliance on the decision of Hon'ble Delhi High Court in the case of PCIT vs. Sony Ericson Mobile Communication India (P) Ltd. ,127 taxmann.com 356(Del).
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We have heard the submissions made by rival sides and have examined the orders of authorities below. The assessee by way of additional ground No.13 has raised a legal issue, challenging validity of assessment order in the name of non-existing entity. No fresh evidence is required to adjudicate this legal issue. Therefore, the additional ground of appeal No.13 is admitted for adjudication on merits.
The solitary issue raised before us by way of additional ground No.13 of appeal is challenge to the assessment order made in the name of the amalgamating company which had ceased to exist on the date of passing of the assessment order. A perusal of letter dated 14/12/2016 at page- 3. of the Paper Book clearly indicates that the assessee had informed the Assessing Officer regarding amalgamation of M/s. Accenture Services Pvt. Ltd. with M/s. Accenture Solutions Pvt. Ltd. consequent to approval of scheme of amalgamation by the Hon'ble Bombay High Court vide order dated 20/10/2016. Thus, after amalgamation M/s. Accenture Services Pvt. Ltd. cease to exist and it was M/s. Accenture Solutions Pvt. Ltd. i.e. the successor to the amalgamating company who had stepped into the shoes of amalgamating company. The fact that the assessee had informed about the amalgamation is not disputed by the Department and it is also evident from the draft assessment order, the final assessment order and the directions of the DRP that the Department was aware about the fact of aforesaid amalgamation. The DRP had issued directions dated 04/09/2018 in the name of successor entity i.e. M/s. Accenture Solutions Pvt. Ltd. However, for the reasons best known to the Assessing Officer, the draft assessment order dated 16/12/2017 and the final assessment order dated 29/10/2018 were passed by the Assessing Officer in the name of non-existing entity i.e. M/s. Accenture
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Services Pvt. Ltd. The fact that Assessing Officer was aware about amalgamation is obvious from the assessment order wherein he in the cause title of the order has mentioned the name of the successor entity i.e. M/s. Accenture Solutions Pvt. Ltd. in the following manner:
Name of the assessee M/s. Accenture Services Pvt. Ltd.(‘ASPL’) (now merged with and known as Accenture Solutions Pvt. Ltd.(‘ASOL’)
The Hon'ble Apex Court in the case of PCIT vs. Maruti Suzuki Pvt. Ltd.(supra) has disapproved the aforesaid manner of addressing erstwhile assessee company in the assessment order after amalgamation. The Hon'ble Apex Court in an unequivocal manner held that the assessment order framed in the name of non- existing entity is void. Thus, in view of the facts narrated above and the law expounded by Hon'ble Apex Court in the case of Maruti Suzuki Ltd.(supra), we hold that in the instant case the assessment orders suffers from incurable jurisdictional defect in framing the assessment. Consequently, the assessment order is liable to be quashed being bad in law. We hold and direct accordingly.
Consequently, the assessee succeeds on additional ground No.13 of the appeal.
We further find that in assessee’s own case in assessment year 2013-14 (supra) identical additional ground was raised challenging validity of assessment order as the same was passed in the name of non-existing entity. The Co-ordinate Bench after placing reliance on the decision of Maruti Suzuki Ltd. (supra) and also after considering the judgment of Hon'ble Delhi High Court in the case of DCIT vs. Sony Ericson Mobile Communication Ltd.(supra) concluded as under:
“20. Now we come to the order of the Hon'ble Delhi High Court in case of PCIT vs Sony Ericsson Mobile Communications India Pvt Ltd in ITA No. 115 of 2019 reported in TS-367-HC-2021 dated 18/05/2021. Indeed, there is a difference of opinion
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between the Hon'ble Judges. However, at the end, in the last paragraph, the Hon'ble High Court has held that the question of law was to be framed and appeal is required to be admitted. Further the facts in those were quiet different as held in para no 16 as under :- "16. We also do not have before us, the communications dated 6th December, 2013 and 17th February, 2014 by which the Respondent-Assessee is stated to have informed the AO of the change of name and are thus unable to gauge whether they were in relation to proceedings for assessment of the relevant year or in general." In the present case, the LD AO in Draft Assessment as well as final assessment order records the intimation. 21. Therefore, issue before the Honourable Delhi High court was on different set of facts. In view of this, we reject the contentions of the learned CIT (DR) that the decision of the Hon'ble Delhi High Court is required to be followed for the reason of distinguishing facts.
Thus the issue is squarely covered in favour of the assessee by the decision of Honourable Supreme court in case Maruti Suzuki Limited (supra). 23. In view of this, we adjudicate ground 17 of the appeal of the assessee, which was admitted as an additional ground of appeal, in favour of the assessee holding that assessment order passed by the assessing officer in the name of a non existing company, despite having prior information provided by the assessee and such facts recorded in the draft assessment order as well as the final assessment order, suffers from jurisdictional defect and, therefore, same is set aside. Accordingly, we hold that the assessment order passed by the learned assessing officer is without jurisdiction and hence, quashed” 12. The facts in the impugned assessment year qua the additional ground mentioned above are identical to the facts in the assessment year 2014-15. The decision of the Co-ordinate Bench further supports the view taken by us in holding the assessment order without jurisdiction. Consequently, the impugned assessment order is quashed and the appeal of the assessee is allowed, solely on the legal issue raised in additional ground No.13.
In so far as other grounds raised in the appeal challenging adjustment/additions on merits, no arguments were advanced by the learned
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counsel for the assessee at this stage. Consequently, the issue raised in ground No.1 to 11 of the appeal are not deliberated upon and are left open.
In the result, appeal by assessee is allowed in the terms aforesaid.
Order pronounced in the open court on Wednesday the 23rd day of March, 2022.
Sd/- Sd/- ( M. BALAGANESH ) (VIKAS AWASTHY) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER मुंबई/ Mumbai, �दनांक/Dated 23/03/2022 Vm, Sr. PS(O/S) ��त�ल�प अ�े�षतCopy of the Order forwarded to :
अपीलाथ�/The Appellant , 2. ��तवाद�/ The Respondent. 3. आयकर आयु�त(अ)/ The CIT(A)- 4. आयकर आयु�त CIT 5. �वभागीय ��त�न�ध, आय.अपी.अ�ध., मुबंई/DR, ITAT, Mumbai 6. गाड� फाइल/Guard file.
BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai